S.B. No. 1971

	AN ACT
	relating to domestic corporations and other domestic entities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 6.252, Business Organizations Code, is
	amended by amending Subsections (a), (b), and (c) and adding
	Subsections (c-1), (c-2), (c-3), (c-4), and (g) to read as follows:
	(a)  Except as provided by this code or the governing
	documents, any number of owners of a domestic entity, or any number
	of owners of the domestic entity and the domestic entity itself, may
	enter into a written voting agreement that is not set forth in the
	domestic entity's governing documents to provide the manner of
	voting of the ownership interests of the domestic entity. A voting
	agreement entered into under this subsection is not part of the
	governing documents of the domestic entity.
	(b)  A copy of a voting agreement entered into under
	Subsection (a):
	(1)  may [shall] be deposited with the domestic entity
	at the domestic entity's principal executive office or registered
	office; and
	(2)  if deposited as provided by Subdivision (1), is
	subject to examination by an owner, whether in person or by the
	owner's agent or attorney, in the same manner as the owner is
	entitled to examine the books and records of the domestic entity.
	(c)  A voting agreement entered into under Subsection (a) is
	specifically enforceable against the owner [holder] of an ownership
	interest that is the subject of the agreement if the owner executes
	the voting agreement or acknowledges in writing that the owner or
	the ownership interest is bound by the agreement[, and any
	successor or transferee of the holder, if:
	[(1)     the voting agreement is noted conspicuously on
	the certificate representing the ownership interests; or
	[(2)     a notation of the voting agreement is contained
	in a notice sent by or on behalf of the domestic entity in
	accordance with Section 3.205, if the ownership interest is not
	represented by a certificate].
	(c-1)  A voting agreement entered into under Subsection (a)
	is specifically enforceable against any subsequent owner of the
	ownership interest subject to the voting agreement if the
	subsequent owner:
	(1)  has notice or actual knowledge of the voting
	agreement at or before the time of transfer to the subsequent owner;
	(2)  is not a transferee for value and receives notice
	or obtains actual knowledge of the voting agreement; or
	(3)  acknowledges in writing that the subsequent owner
	or the ownership interest is bound by the voting agreement.
	(c-2)  A subsequent owner is considered to have notice of a
	voting agreement for purposes of Subsection (c-1)(1) if, at the
	time of transfer, the existence of the voting agreement is noted
	conspicuously on any certificate representing the ownership
	interest held by the transferor owner. The notice described by this
	subsection is not the exclusive method by which notice of the voting
	agreement may be received by a subsequent owner for purposes of
	Subsection (c-1)(1).
	(c-3)  A voting agreement that becomes specifically
	enforceable against a subsequent owner under Subsection (c-1)(2) is
	specifically enforceable from the time the subsequent owner first
	receives notice or obtains actual knowledge of the voting
	agreement.
	(c-4)  A voting agreement that becomes specifically
	enforceable against a subsequent owner under Subsection (c-1)(3) is
	specifically enforceable from the time of the written
	acknowledgment by the subsequent owner.
	(g)  This section does not impair the right of the domestic
	entity to treat an owner of record as entitled to vote the ownership
	interest standing in the owner's name or to accept that owner's vote
	of the ownership interest.
	SECTION 2.  Sections 10.354(b) and (c), Business
	Organizations Code, are amended to read as follows:
	(b)  Notwithstanding Subsection (a), subject to Subsection
	(c), an owner may not dissent from a plan of merger or conversion in
	which there is a single surviving or new domestic entity or non-code
	organization, or from a plan of exchange, if:
	(1)  the ownership interest, or a depository receipt in
	respect of the ownership interest, held by the owner:
	(A)  in the case of a plan of merger, conversion,
	or exchange, other than a plan of merger pursuant to Section
	21.459(c), is part of a class or series of ownership interests, or
	depository receipts in respect of ownership interests, that [are],
	on the record date set for purposes of determining which owners are
	entitled to vote on the plan of merger, conversion, or exchange, as
	appropriate, are either:
	(i) [(A)]  listed on a national securities
	exchange; or
	(ii) [(B)]  held of record by at least 2,000
	owners; or
	(B)  in the case of a plan of merger pursuant to
	Section 21.459(c), is part of a class or series of ownership
	interests, or depository receipts in respect of ownership
	interests, that, immediately before the date the board of directors
	of the corporation that issued the ownership interest held,
	directly or indirectly, by the owner approves the plan of merger,
	are either:
	(i)  listed on a national securities
	exchange; or
	(ii)  held of record by at least 2,000
	owners;
	(2)  the owner is not required by the terms of the plan
	of merger, conversion, or exchange, as appropriate, to accept for
	the owner's ownership interest any consideration that is different
	from the consideration to be provided to any other holder of an
	ownership interest of the same class or series as the ownership
	interest held by the owner, other than cash instead of fractional
	shares or interests the owner would otherwise be entitled to
	receive; and
	(3)  the owner is not required by the terms of the plan
	of merger, conversion, or exchange, as appropriate, to accept for
	the owner's ownership interest any consideration other than:
	(A)  ownership interests, or depository receipts
	in respect of ownership interests, of a domestic entity or non-code
	organization of the same general organizational type that,
	immediately after the effective date of the merger, conversion, or
	exchange, as appropriate, will be part of a class or series of
	ownership interests, or depository receipts in respect of ownership
	interests, that are:
	(i)  listed on a national securities
	exchange or authorized for listing on the exchange on official
	notice of issuance; or
	(ii)  held of record by at least 2,000
	owners;
	(B)  cash instead of fractional ownership
	interests, or fractional depository receipts in respect of
	ownership interests, the owner would otherwise be entitled to
	receive; or
	(C)  any combination of the ownership interests,
	or fractional depository receipts in respect of ownership
	interests, and cash described by Paragraphs (A) and (B).
	(c)  Subsection (b) shall not apply [either] to a domestic
	entity that is a subsidiary with respect to a merger under Section
	10.006 [or to a corporation with respect to a merger under Section
	21.459(c)].
	SECTION 3.  Sections 10.355(d) and (f), Business
	Organizations Code, are amended to read as follows:
	(d)  In addition to the requirements prescribed by
	Subsection (c), a notice required to be provided:
	(1)  under Subsection (a)(1) must accompany the notice
	of the meeting to consider the action;
	(2)  under Subsection (a)(2) must be provided to:
	(A)  each owner who consents in writing to the
	action before the owner delivers the written consent; and
	(B)  each owner who is entitled to vote on the
	action and does not consent in writing to the action before the 11th
	day after the date the action takes effect; and
	(3)  under Subsection (b-1) must be provided:
	(A)  if given before the consummation of the
	[tender or exchange] offer described by Section 21.459(c)(2), to
	each shareholder to whom that offer is made; or
	(B)  if given after the consummation of the
	[tender or exchange] offer described by Section 21.459(c)(2), to
	each shareholder who did not tender the shareholder's shares in
	that offer.
	(f)  If the notice given under Subsection (b-1) did not
	include a statement of the effective date of the merger, the
	responsible organization shall, not later than the 10th day after
	the effective date, give a second notice to the shareholders
	notifying them of the merger's effective date. If the second notice
	is given after the later of the date on which the [tender or
	exchange] offer described by Section 21.459(c)(2) is consummated or
	the 20th day after the date notice under Subsection (b-1) is given,
	then the second notice is required to be given to only those
	shareholders who have made a demand under Section 10.356(b)(3).
	SECTION 4.  Section 10.356(b), Business Organizations Code,
	is amended to read as follows:
	(b)  To perfect the owner's rights of dissent and appraisal
	under Section 10.354, an owner:
	(1)  if the proposed action is to be submitted to a vote
	of the owners at a meeting, must give to the domestic entity a
	written notice of objection to the action that:
	(A)  is addressed to the entity's president and
	secretary;
	(B)  states that the owner's right to dissent will
	be exercised if the action takes effect;
	(C)  provides an address to which notice of
	effectiveness of the action should be delivered or mailed; and
	(D)  is delivered to the entity's principal
	executive offices before the meeting;
	(2)  with respect to the ownership interest for which
	the rights of dissent and appraisal are sought:
	(A)  must vote against the action if the owner is
	entitled to vote on the action and the action is approved at a
	meeting of the owners; and
	(B)  may not consent to the action if the action is
	approved by written consent; and
	(3)  must give to the responsible organization a demand
	in writing that:
	(A)  is addressed to the president and secretary
	of the responsible organization;
	(B)  demands payment of the fair value of the
	ownership interests for which the rights of dissent and appraisal
	are sought;
	(C)  provides to the responsible organization an
	address to which a notice relating to the dissent and appraisal
	procedures under this subchapter may be sent;
	(D)  states the number and class of the ownership
	interests of the domestic entity owned by the owner and the fair
	value of the ownership interests as estimated by the owner; and
	(E)  is delivered to the responsible organization
	at its principal executive offices at the following time:
	(i)  not later than the 20th day after the
	date the responsible organization sends to the owner the notice
	required by Section 10.355(e) that the action has taken effect, if
	the action was approved by a vote of the owners at a meeting;
	(ii)  not later than the 20th day after the
	date the responsible organization sends to the owner the notice
	required by Section 10.355(d)(2) that the action has taken effect,
	if the action was approved by the written consent of the owners;
	(iii)  not later than the 20th day after the
	date the responsible organization sends to the owner a notice that
	the merger was effected, if the action is a merger effected under
	Section 10.006; or
	(iv)  not later than the 20th day after the
	date the responsible organization gives to the shareholder the
	notice required by Section 10.355(b-1) or the date of the
	consummation of the [tender or exchange] offer described by Section
	21.459(c)(2), whichever is later, if the action is a merger
	effected under Section 21.459(c).
	SECTION 5.  Section 21.002, Business Organizations Code, is
	amended by adding Subdivision (10-a) to read as follows:
	(10-a)  "Share transfer records" means one or more
	records maintained by or on behalf of a corporation in accordance
	with Section 3.151 in which the names of all of the corporation's
	shareholders of record, the address of and number of shares
	registered in the name of each shareholder of record, and all
	issuances and transfers of shares of the corporation are recorded.
	SECTION 6.  Section 21.305(b), Business Organizations Code,
	is amended to read as follows:
	(b)  The notice of redemption shall be sent to each holder of
	redeemable shares being called not later than the 21st day or
	earlier than the 60th day before the date set for redemption, unless
	otherwise provided by the terms of the class or series of shares
	contained in the certificate of formation.
	SECTION 7.  Sections 21.372(a) and (a-1), Business
	Organizations Code, are amended to read as follows:
	(a)  Not later than the 11th day before the date of each
	meeting of the shareholders of a corporation, [an officer or agent
	of the corporation who is in charge of the corporation's share
	transfer records shall prepare] an alphabetical list of the
	shareholders entitled to vote at the meeting or at any adjournment
	of the meeting shall be prepared by or on behalf of the corporation.
	The list of shareholders must:
	(1)  state:
	(A)  the address of each shareholder;
	(B)  the type of shares held by each shareholder;
	(C)  the number of shares held by each
	shareholder; and
	(D)  the number of votes that each shareholder is
	entitled to if the number of votes is different from the number of
	shares stated under Paragraph (C); and
	(2)  be kept on file at the registered office or
	principal executive office of the corporation for at least 10 days
	before the date of the meeting.
	(a-1)  Instead of being kept on file, the list required by
	Subsection (a) may be kept on a reasonably accessible electronic
	data system [network] if the information required to gain access to
	the list is provided with notice of the meeting. Section 21.353(c),
	Section 21.354(a-1), and this subsection may not be construed to
	require a corporation to include any electronic contact information
	of a shareholder on the list. A corporation that elects to make the
	list available on an electronic data system [network] must take
	reasonable measures to ensure the information is available only to
	shareholders of the corporation.
	SECTION 8.  Section 21.459, Business Organizations Code, is
	amended by amending Subsections (c), (d), and (e) and adding
	Subsection (f) to read as follows:
	(c)  This subsection applies only to a corporation that is a
	party to the merger and has a class or series of [whose] shares that
	are, immediately before the date its board of directors approves
	the plan of merger, either listed on a national securities exchange
	or held of record by at least 2,000 shareholders. Unless required
	by the corporation's certificate of formation, a plan of merger is
	not required to be approved by the shareholders of the corporation
	if:
	(1)  the plan of merger expressly:
	(A)  permits or requires the merger to be effected
	under this subsection; and
	(B)  provides that any merger effected under this
	subsection shall be effected as soon as practicable following the
	consummation of the offer [described by Subdivision (2)];
	(2)  an organization consummates an [a tender or
	exchange] offer for all of the outstanding shares of the
	corporation on the terms provided in the plan of merger that, absent
	this subsection, would be entitled to vote on the approval of the
	plan of merger, except that:
	(A)  the offer may be conditioned on the tender of
	a minimum number or percentage of shares of the corporation or of
	any class or series of shares of the corporation;
	(B)  the offer may exclude any excluded shares;
	and
	(C)  the organization may consummate separate
	offers for separate classes or series of shares of the corporation
	[owned at the time of the commencement of the offer by:
	[(A)  the corporation;
	[(B)  the organization making the offer;
	[(C)     any person who owns, directly or indirectly,
	all of the ownership interests in the organization making the
	offer; or
	[(D)     any direct or indirect wholly owned
	subsidiary of a person described by Paragraph (A), (B), or (C)];
	(3)  immediately following the consummation of the
	offer, shares that are irrevocably accepted for purchase or
	exchange pursuant to the consummation of the offer [described by
	Subdivision (2)] and that are received by the depository before the
	expiration of the offer, together with [in addition to] the shares
	that are otherwise owned by the consummating organization or its
	qualified affiliates and any rollover shares, equal at least the
	percentage of the shares of the corporation, and of each class or
	series of those shares[, of the corporation] that, absent this
	subsection, would be required to approve the plan of merger by:
	(A)  Section 21.457 and, if applicable, Section
	21.458; and
	(B)  the certificate of formation of the
	corporation;
	(4)  the organization consummating the offer or one of
	its qualified affiliates [described by Subdivision (2)] merges with
	or into the corporation pursuant to the plan of merger; and
	(5)  each outstanding share, other than excluded
	shares, of each class or series of the corporation that is the
	subject of and is not irrevocably accepted for purchase or exchange
	in the offer [described by Subdivision (2)] is to be converted or
	exchanged in the merger into, or into the right to receive, the same
	amount and kind of consideration, as described by Section
	10.002(a)(5), as to be paid or delivered for shares of such class or
	series of the corporation irrevocably accepted for purchase or
	exchange in the offer.
	(d)  In Subsection (c) and this subsection and, as
	applicable, in Sections 10.355(d)(3)(B), 10.355(f), and
	10.356(b)(3)(E)(iv):
	(1)  "Consummates," "consummation," or "consummating"
	means irrevocably accepts for purchase or exchange shares tendered
	pursuant to an [a tender or exchange] offer.
	(2)  "Depository" means an agent appointed to
	facilitate consummation of an [the] offer [described by Subsection
	(c)(2)].
	(3)  "Offer" means a tender offer or an exchange offer
	that satisfies the requirements of Subsection (c)(2).
	(e)  For purposes of Subsection (c) and this subsection:
	(1)  "Excluded shares" means:
	(A)  shares of the corporation that are owned at
	the commencement of the offer by:
	(i)  the corporation;
	(ii)  the organization consummating the
	offer;
	(iii)  any person that owns, directly or
	indirectly, all of the outstanding ownership interests of the
	organization consummating the offer; or
	(iv)  any direct or indirect wholly owned
	subsidiary of the corporation, the organization consummating the
	offer, or any person described by Subparagraph (iii); and
	(B)  rollover shares.
	(2)  "Qualified affiliate" means, with respect to the
	organization consummating an offer, any person that:
	(A)  owns, directly or indirectly, all of the
	outstanding ownership interests of the organization consummating
	the offer; or
	(B)  is a direct or indirect wholly owned
	subsidiary of the organization consummating the offer or of any
	person described by Paragraph (A).
	(3)  "Received" means:
	(A)  [(c)(3), "received,"] with respect to
	certificated shares, [means:
	[(1)]  physical receipt of a certificate representing
	shares accompanied by an executed letter of transmittal[, in the
	case of certificated shares]; [and]
	(B) [(2)]  transfer into the depository's account
	by means of [or] an agent's message; and
	(C)  with respect to uncertificated shares held of
	record by a person other than a clearing corporation as nominee,
	physical receipt of an executed letter of transmittal by the
	depository [being received by the depository, in the case of
	uncertificated shares].
	(4)  "Rollover shares" means any shares of the
	corporation that are the subject of a written agreement, separate
	from the offer, requiring the shares to be transferred,
	contributed, or delivered to the organization consummating the
	offer or any of the organization's qualified affiliates in exchange
	for ownership interests in the organization consummating the offer
	or a qualified affiliate of that organization. The term does not
	include shares of a corporation described by this subdivision that,
	immediately before the time a merger described by Subsection (c)
	becomes effective, have not been transferred, contributed, or
	delivered to the organization consummating the offer or any of the
	organization's qualified affiliates pursuant to the written
	agreement.
	(f)  For purposes of Subsections (c) and (e), shares cease to
	be "received":
	(1)  with respect to certificated shares, if the
	certificate representing the shares was canceled before
	consummation of the offer; and
	(2)  with respect to uncertificated shares, to the
	extent the uncertificated shares have been reduced or eliminated
	due to any sale of those shares before the consummation of the
	offer.
	SECTION 9.  Section 21.701, Business Organizations Code, is
	amended to read as follows:
	Sec. 21.701.  DEFINITIONS. In this subchapter and
	Subchapter P:
	(1)  "Close corporation" means a domestic corporation
	formed under this subchapter or governed by this subchapter because
	of Section 21.705, 21.706, or 21.707.
	(2)  "Close corporation provision" means a provision in
	the certificate of formation of a close corporation or in a
	shareholders' agreement of a close corporation.
	(3)  "Ordinary corporation" means a domestic
	corporation that is not a close corporation.
	(4)  "Shareholders' agreement" means a written
	agreement regulating an aspect of the business and affairs of or the
	relationship among the shareholders of a close corporation that has
	been executed under this subchapter.
	SECTION 10.  Section 21.901, Business Organizations Code, is
	amended by amending Subdivisions (2) and (4) and adding Subdivision
	(5-a) to read as follows:
	(2)  "Defective corporate act" means:
	(A)  an overissue;
	(B)  an election or appointment of directors that
	is void or voidable due to a failure of authorization; or
	(C)  any act or transaction purportedly taken by
	or on behalf of the corporation that is, and at the time the act or
	transaction was purportedly taken would have been, within the power
	of a corporation to take under the corporate statute, without
	regard to the failure of authorization identified in Section
	21.903(a)(4), but is void or voidable due to a failure of
	authorization.
	(4)  "Failure of authorization" means:
	(A)  the failure to authorize or effect an act or
	transaction in compliance with the provisions of the corporate
	statute, the governing documents of the corporation, [or] any plan
	or agreement to which the corporation is a party, or the disclosure
	set forth in any proxy or consent solicitation statement, if and to
	the extent the failure would render the act or transaction void or
	voidable; or
	(B)  the failure of the board of directors or an
	officer of the corporation to authorize or approve an act or
	transaction taken by or on behalf of the corporation that required
	the prior authorization or approval of the board of directors or the
	officer.
	(5-a)  "Putative record date" means, with respect to
	any defective corporate act that involved the establishment of a
	record date for a meeting of or action by shareholders or any other
	purpose, that record date.
	SECTION 11.  Section 21.905, Business Organizations Code, is
	amended to read as follows:
	Sec. 21.905.  SHAREHOLDER APPROVAL OF RATIFIED DEFECTIVE
	CORPORATE ACT REQUIRED; EXCEPTION. Each defective corporate act
	ratified under Section 21.903 must be submitted to shareholders for
	approval as provided by Sections 21.906 and 21.907, unless:
	(1)(A)  no other provision of the corporate statute, no
	provision of the corporation's governing documents, and no
	provision of any plan or agreement to which the corporation is a
	party would have required shareholder approval of:
	(i) [(A)]  the defective corporate act to be
	ratified at the time of that defective corporate act; or
	(ii) [(B)]  the type of defective corporate
	act to be ratified at the time the board of directors adopts the
	resolutions ratifying that defective corporate act under Section
	21.903; and
	(B) [(2)]  the defective corporate act to be
	ratified did not result from a failure to comply with Subchapter M;
	or
	(2)  as of the record date for determining the
	shareholders entitled to vote on the ratification of the defective
	corporate act, there are no valid shares outstanding and entitled
	to vote on the ratification, regardless of whether as of that record
	date there exist any putative shares.
	SECTION 12.  Section 21.906(a), Business Organizations
	Code, is amended to read as follows:
	(a)  If the ratification of a defective corporate act is
	required to be submitted to the shareholders for approval under
	Section 21.905, notice of the time, place, if any, and purpose of
	the meeting shall be given at least 20 days before the date of the
	meeting to:
	(1)  each holder of record, as of the record date of the
	meeting, of valid shares and putative shares, regardless of whether
	the shares are voting or nonvoting, at the address of the holder as
	it appears or most recently appeared, as appropriate, on the
	corporation's records; and
	(2)  each holder of record of valid shares and putative
	shares, regardless of whether the shares are voting or nonvoting,
	other than to a holder whose identity or address cannot be
	ascertained from the corporation's records:
	(A)  as of the time of the defective corporate
	act; or
	(B)  in the case of any defective corporate act
	that involved the establishment of a putative record date, as of
	that putative record date[, except that notice is not required to be
	given to a holder whose identity or address cannot be ascertained
	from the corporation's records].
	SECTION 13.  Section 21.911(e), Business Organizations
	Code, is amended to read as follows:
	(e)  Notwithstanding Subsections (a)-(d):
	(1)  notice is not required to be given under this
	section to a person if notice of the ratification of the defective
	corporate act is given to that person in accordance with Section
	21.906; and
	(2)  for a corporation that has a class of stock listed
	on a national securities exchange, the notice required by this
	section and Section 21.906(a)(2) may be considered given if the
	information contained in the notice is disclosed in a document
	publicly filed by the corporation with the Securities and Exchange
	Commission under Section 13, 14, or 15(d), Securities Exchange Act
	of 1934 (15 U.S.C. Section 78m, 78n, or 78o(d)), and any rules
	promulgated under that Act.
	SECTION 14.  Section 21.953(c), Business Organizations
	Code, is amended to read as follows:
	(c)  The name of the public benefit corporation specified in
	its certificate of formation may contain the words "public benefit
	corporation," the abbreviation "P.B.C.," or the designation "PBC."
	If the name does not contain those words or that abbreviation or
	designation, [the corporation must,] before the issuance of
	[issuing] unissued shares or the disposition [disposing] of
	treasury shares and except as provided by Subsection (d), [provide]
	notice that the corporation is a public benefit corporation shall
	be given to any person:
	(1)  to whom the unissued shares are issued; or
	(2)  who acquires the treasury shares.
	SECTION 15.  Section 21.955(b), Business Organizations
	Code, is amended to read as follows:
	(b)  A notice sent to any person [by a public benefit
	corporation] under Section 3.205 must state conspicuously that the
	corporation is a public benefit corporation governed by this
	subchapter.
	SECTION 16.  Section 22.001, Business Organizations Code, is
	amended by adding Subdivision (3-a) to read as follows:
	(3-a)  "Director" means a person who is a member of the
	board of directors, regardless of the name or title used to
	designate the person. The term does not include a person designated
	as a director of the corporation, or as an ex officio, honorary, or
	other type of director of the corporation if the person is not
	entitled to vote as a director.
	SECTION 17.  Section 22.002, Business Organizations Code, is
	amended to read as follows:
	Sec. 22.002.  MEETINGS BY REMOTE COMMUNICATIONS TECHNOLOGY.
	A [Subject to the provisions of this code and the certificate of
	formation and bylaws of a corporation, a] meeting of the members of
	a corporation, the board of directors of a corporation, or any
	committee designated by the board of directors of a corporation may
	be held by means of a conference telephone or similar
	communications equipment, another suitable [remote] electronic
	communications system, including videoconferencing technology or
	the Internet, or any combination of those means, in accordance with
	Section 6.002 [only if:
	[(1)     each person entitled to participate in the
	meeting consents to the meeting being held by means of that system;
	and
	[(2)     the system provides access to the meeting in a
	manner or using a method by which each person participating in the
	meeting can communicate concurrently with each other participant].
	SECTION 18.  Section 22.210, Business Organizations Code, is
	amended to read as follows:
	Sec. 22.210.  NON-DIRECTOR RIGHTS AND LIMITATIONS [EX
	OFFICIO MEMBER OF BOARD]. [(a)]  The certificate of formation or
	bylaws of a corporation may provide that a person who is not a
	director [may be an ex officio member of the board of directors of
	the corporation.
	[(b)     A person designated as an ex officio member of the
	board] is entitled to receive notice of and to attend [board]
	meetings of the board of directors.  By having those rights, the
	person does not have the authority, duties, or liabilities of a
	director and is not a governing person of the corporation.
	[(c)     An ex officio member is not entitled to vote unless the
	certificate of formation or bylaws authorize the member to vote. An
	ex officio member of the board who is not entitled to vote does not
	have the duties or liabilities of a director provided by this
	chapter.]
	SECTION 19.  Section 22.356(b), Business Organizations
	Code, is amended to read as follows:
	(b)  The books and records of a corporation other than a bona
	fide alumni association are subject to audit at the discretion of
	the state auditor if:
	(1)  the corporation's certificate of formation
	[charter] specifically dedicates the corporation's activities to
	the benefit of a particular state agency; and
	(2)  a board member, officer, or employee of that state
	agency is a director [sits on the board of directors] of the
	corporation [in other than an ex officio capacity].
	SECTION 20.  Sections 6.252(d) and (e), Business
	Organizations Code, are repealed.
	SECTION 21.  This Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1971 passed the Senate on
	May 3, 2019, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1971 passed the House on
	May 22, 2019, by the following vote:  Yeas 144, Nays 0, two
	present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor