85R8520 CLG-F
	By: Hancock	S.B. No. 2206

	A BILL TO BE ENTITLED
	AN ACT
	relating to information required to be disclosed by certain
	investors of publicly traded companies whose headquarters are
	located in this state.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  This Act shall be known as the Bring Business to
	Texas and Fairness in Disclosure Act.
	SECTION 2.  Section 4, The Securities Act (Article 581-4,
	Vernon's Texas Civil Statutes), is amended by adding Subsections R,
	S, T, U, V, W, and X to read as follows:
	R.  "Activist investor" means a person who, directly or
	indirectly, or through or with an affiliate:
	(1)  nominates or attempts to nominate the person or
	another person to the governing authority or body of a publicly
	traded entity, including the board of directors of a corporation or
	the general partners of a general partnership or limited
	partnership;
	(2)  makes or attempts to make one or more shareholder
	proposals or the equivalent for a publicly traded entity; or
	(3)  acts broadly in concert with, or on behalf of, a
	person who engages in actions described by either Subdivision (1)
	or (2) of this subsection.
	S. "Affiliate," with respect to a person, means:
	(1)  a family member of a natural person; or
	(2)  any person who controls, is controlled by, or is
	under common control with the person.
	T. "Beneficial owner," with respect to a class of securities
	of a publicly traded entity, means a person who has the sole or
	shared power to vote or dispose of a security or who enjoys the
	economic benefits of ownership of a security. The term includes a
	person who enjoys the benefits of ownership of a security or the
	voting power of a security, regardless of whether the security is
	held in the name of another person.
	U. "Governing authority" has the meaning assigned by Section
	1.002, Business Organizations Code.
	V. "Headquarters," with respect to a publicly traded entity,
	means the location at which the president or other chief executive
	officer of the entity, a general partner of the entity, or any other
	senior member of the entity's management team routinely performs
	duties in those respective capacities.
	W. "Mutual fund" means an entity that:
	(1)  is engaging primarily in, or proposes to engage
	primarily in, the business of investing, reinvesting, or trading in
	securities;
	(2)  is engaging or proposes to engage in the business
	of issuing face-amount certificates of the installment type;
	(3)  has engaged in a business described by Subdivision
	(2) of this subsection and has outstanding a certificate described
	by that subdivision;
	(4)  is engaging or proposes to engage in the business
	of investing, reinvesting, owning, holding, or trading in
	securities and owns or proposes to acquire investment securities
	whose value exceeds 40 percent of the value of the total assets of
	the issuer of the securities, not including government securities
	and cash, on an unconsolidated basis; or
	(5)  is an investment company registered under the
	Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.).
	X. "Texas-based public company" means a publicly traded
	entity whose headquarters are located in this state.
	SECTION 3.  The Securities Act (Article 581-1 et seq.,
	Vernon's Texas Civil Statutes) is amended by adding Sections 45,
	46, 47, and 48 to read as follows:
	Sec. 45.  BENEFICIAL OWNERSHIP; DISCLOSURE. A. This section
	applies only to a person who is simultaneously:
	(1)  a beneficial owner of a security of any class of
	securities of a Texas-based public company; and
	(2)  an activist investor with respect to the same
	Texas-based public company that is beneficially owned by the
	person.
	B. Not later than the 10th day after the date the person is or
	becomes both a beneficial owner and an activist investor of a
	Texas-based public company or September 11, 2017, whichever is
	later, the person shall file with the Securities Commissioner and
	deliver, by United States certified mail, to the company's
	headquarters and to the company's registered agent designated under
	Chapter 5, Business Organizations Code, a certified statement that:
	(1)  contains:
	(A)  the full name, identity, background,
	residence, primary telephone number, and citizenship of the person;
	(B)  the address of the principal place of
	business of the person and the person's primary e-mail address;
	(C)  the nature of the beneficial ownership of the
	person; and
	(D)  for all other persons by whom or on whose
	behalf the beneficial ownership of the person has been or is to be
	effected, the information described by Paragraphs (A) and (B) of
	this subdivision; and
	(2)  is signed by the senior executive officer of the
	person certifying that the information disclosed in Subdivision (1)
	of this subsection is correct and complete.
	Sec. 46.  CHANGE TO CERTAIN DISCLOSED INFORMATION;
	AMENDMENT. If, during the time a person described by Section 45A of
	this Act is an activist investor of the Texas-based public company,
	any change occurs in the information contained in the certified
	statement the person filed under Section 45 of this Act, the person
	shall:
	(1)  file an amendment to the certified statement with
	the Securities Commissioner not later than the 10th day after the
	date the change occurs; and
	(2)  deliver, by United States certified mail, a
	correct and complete copy of the amendment to the security issuer's
	headquarters in this state.
	Sec. 47.  ACTIONS TO AVOID MAKING CERTAIN REQUIRED
	DISCLOSURES PROHIBITED. A. This section does not apply to a mutual
	fund.
	B. A person may not act at the direction of, for the benefit
	of, or otherwise on behalf of another person with the intent or
	effect of avoiding a disclosure required by Section 45 of this Act.
	C. If the board of directors or other governing authority of
	a corporation, limited liability company, partnership, or other
	Texas-based public company reasonably believes that one or more
	persons are acting in concert with, at the direction of, or on
	behalf of another person with the intent or effect of avoiding a
	disclosure required by Section 45 of this Act, the governing
	authority of the company shall notify the Securities Commissioner
	of that conduct.
	D. If the Securities Commissioner determines that a person
	is violating Subsection B of this section, the Securities
	Commissioner shall require the person to disclose the information
	required by Section 45 of this Act.
	Sec. 48.  PRIVATE CAUSE OF ACTION.  A. A Texas-based public
	company entitled to receive a disclosure under Section 45 of this
	Act or a person acting on behalf of the company may bring an action,
	on an expedited basis, in a court in this state against a person
	that does not comply with the disclosure required by that section
	for:
	(1)  injunctive relief; and
	(2)  recovery of the company's reasonable attorney's
	fees.
	B. A civil penalty or remedy in addition to the injunctive
	relief provided by Subsection A of this section may not be imposed
	or awarded against a person for a violation that arises out of the
	same conduct described by that subsection.
	SECTION 4.  This Act takes effect September 1, 2017.