Bill Text: TX SB1258 | 2019-2020 | 86th Legislature | Enrolled

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Bill Title: Relating to the prosecution of limited liability companies and other business entities under the Penal Code.

Spectrum: Bipartisan Bill

Status: (Passed) 2019-05-22 - Effective on 9/1/19 [SB1258 Detail]

Download: Texas-2019-SB1258-Enrolled.html

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S.B. No. 1258

AN ACT
relating to the prosecution of limited liability companies and
other business entities under the Penal Code.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.07(a)(38), Penal Code, is amended to
read as follows:
(38) "Person" means an individual or a[,] corporation,
[or] association, limited liability company, or other entity or
organization governed by the Business Organizations Code.
SECTION 2. Subchapter B, Chapter 7, Penal Code, is amended
to read as follows:
SUBCHAPTER B. CORPORATIONS, [AND] ASSOCIATIONS, LIMITED LIABILITY
COMPANIES, AND OTHER BUSINESS ENTITIES
Sec. 7.21. DEFINITIONS. In this subchapter:
(1) "Agent" means a director, officer, employee, or
other person authorized to act in behalf of a corporation, an [or]
association, a limited liability company, or another business
entity.
(1-a) "Business entity" means an entity or
organization governed by the Business Organizations Code, other
than a corporation, association, or limited liability company.
(2) "High managerial agent" means:
(A) a partner in a partnership;
(B) an officer of a corporation, an [or]
association, a limited liability company, or another business
entity;
(C) an agent of a corporation, an [or]
association, a limited liability company, or another business
entity who has duties of such responsibility that the agent's [his]
conduct reasonably may be assumed to represent the policy of the
corporation, [or] association, limited liability company, or other
business entity.
Sec. 7.22. CRIMINAL RESPONSIBILITY OF CORPORATION, [OR]
ASSOCIATION, LIMITED LIABILITY COMPANY, OR OTHER BUSINESS ENTITY.
(a) If conduct constituting an offense is performed by an agent
acting in behalf of a corporation, an [or] association, a limited
liability company, or another business entity and within the scope
of the agent's [his] office or employment, the corporation, [or]
association, limited liability company, or other business entity is
criminally responsible for an offense defined:
(1) in this code where corporations, [and]
associations, limited liability companies, and other business
entities are made subject thereto;
(2) by law other than this code in which a legislative
purpose to impose criminal responsibility on corporations, [or]
associations, limited liability companies, and other business
entities plainly appears; or
(3) by law other than this code for which strict
liability is imposed, unless a legislative purpose not to impose
criminal responsibility on corporations, [or] associations,
limited liability companies, or other business entities plainly
appears.
(b) A corporation, an [or] association, a limited liability
company, or another business entity is criminally responsible for a
felony offense only if its commission was authorized, requested,
commanded, performed, or recklessly tolerated by:
(1) a majority of the governing body [board] acting in
behalf of the corporation, [or] association, limited liability
company, or other business entity; or
(2) a high managerial agent acting in behalf of the
corporation, [or] association, limited liability company, or other
business entity and within the scope of the agent's [his] office or
employment.
Sec. 7.23. CRIMINAL RESPONSIBILITY OF PERSON FOR CONDUCT IN
BEHALF OF CORPORATION, [OR] ASSOCIATION, LIMITED LIABILITY
COMPANY, OR OTHER BUSINESS ENTITY. (a) An individual is
criminally responsible for conduct that the individual [he]
performs in the name of or in behalf of a corporation, an [or]
association, a limited liability company, or another business
entity to the same extent as if the conduct were performed in the
individual's [his] own name or behalf.
(b) An agent having primary responsibility for the
discharge of a duty to act imposed by law on a corporation, an [or]
association, a limited liability company, or another business
entity is criminally responsible for omission to discharge the duty
to the same extent as if the duty were imposed by law directly on the
agent [him].
(c) If an individual is convicted of conduct constituting an
offense performed in the name of or on behalf of a corporation, an
[or] association, a limited liability company, or another business
entity, the individual [he] is subject to the sentence authorized
by law for an individual convicted of the offense.
Sec. 7.24. DEFENSE TO CRIMINAL RESPONSIBILITY OF
CORPORATION, [OR] ASSOCIATION, LIMITED LIABILITY COMPANY, OR OTHER
BUSINESS ENTITY. It is an affirmative defense to prosecution of a
corporation, an [or] association, a limited liability company, or
another business entity under Section 7.22(a)(1) or (a)(2) that the
high managerial agent having supervisory responsibility over the
subject matter of the offense employed due diligence to prevent its
commission.
SECTION 3. Section 12.51, Penal Code, is amended to read as
follows:
Sec. 12.51. AUTHORIZED PUNISHMENTS FOR CORPORATIONS, [AND]
ASSOCIATIONS, LIMITED LIABILITY COMPANIES, AND OTHER BUSINESS
ENTITIES. (a) If a corporation, an [or] association, a limited
liability company, or another business entity is adjudged guilty of
an offense that provides a penalty consisting of a fine only, a
court may sentence the corporation, [or] association, limited
liability company, or other business entity to pay a fine in an
amount fixed by the court, not to exceed the fine provided by the
offense.
(b) If a corporation, an [or] association, a limited
liability company, or another business entity is adjudged guilty of
an offense that provides a penalty including imprisonment, or that
provides no specific penalty, a court may sentence the corporation,
[or] association, limited liability company, or other business
entity to pay a fine in an amount fixed by the court, not to exceed:
(1) $20,000 if the offense is a felony of any category;
(2) $10,000 if the offense is a Class A or Class B
misdemeanor;
(3) $2,000 if the offense is a Class C misdemeanor; or
(4) $50,000 if, as a result of an offense classified as
a felony or Class A misdemeanor, an individual suffers serious
bodily injury or death.
(c) In lieu of the fines authorized by Subsections (a),
(b)(1), (b)(2), and (b)(4), if a court finds that the corporation,
[or] association, limited liability company, or other business
entity gained money or property or caused personal injury or death,
property damage, or other loss through the commission of a felony or
Class A or Class B misdemeanor, the court may sentence the
corporation, [or] association, limited liability company, or other
business entity to pay a fine in an amount fixed by the court, not to
exceed double the amount gained or caused by the corporation, [or]
association, limited liability company, or business entity to be
lost or damaged, whichever is greater.
(d) In addition to any sentence that may be imposed by this
section, a corporation, an [or] association, a limited liability
company, or another business entity that has been adjudged guilty
of an offense may be ordered by the court to give notice of the
conviction to any person the court deems appropriate.
(e) On conviction of a corporation, an [or] association, a
limited liability company, or another business entity, the court
shall notify the attorney general of that fact.
(f) In this section, "business entity" has the meaning
assigned by Section 7.21.
SECTION 4. Section 20.01(4), Penal Code, is amended to read
as follows:
(4) "Person" means an individual or a[,] corporation,
[or] association, limited liability company, or other entity or
organization governed by the Business Organizations Code.
SECTION 5. Section 32.43(e), Penal Code, is amended to read
as follows:
(e) In lieu of a fine that is authorized by Subsection (d),
and in addition to the imprisonment that is authorized by that
subsection, if the court finds that an individual who is a fiduciary
gained a benefit through the commission of an offense under
Subsection (b), the court may sentence the individual to pay a fine
in an amount fixed by the court, not to exceed double the value of
the benefit gained. This subsection does not affect the
application of Section 12.51(c) to an offense under this section
committed by a corporation, an [or] association, a limited
liability company, or another business entity, as defined by
Section 7.21.
SECTION 6. The changes in law made by this Act apply only to
an offense committed on or after the effective date of this Act. An
offense committed before the effective date of this Act is governed
by the law in effect on the date the offense was committed, and the
former law is continued in effect for that purpose. For purposes of
this section, an offense was committed before the effective date of
this Act if any element of the offense was committed before that
date.
SECTION 7. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1258 passed the Senate on
April 29, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1258 passed the House on
May 10, 2019, by the following vote: Yeas 127, Nays 14,
two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor