By: Schwertner, Kolkhorst  S.B. No. 2340          (In the Senate - Filed March 12, 2025; March 25, 2025, read   first time and referred to Committee on Business & Commerce;   May 5, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 7, Nays 4; May 5, 2025, sent   to printer.)     COMMITTEE SUBSTITUTE FOR S.B. No. 2340 By:  Campbell     A BILL TO BE ENTITLED   AN ACT     relating to examination of the records of filing entities and   foreign filing entities by the attorney general; creating a   criminal offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 12.153, Business Organizations Code, is   amended to read as follows:          Sec. 12.153.  AUTHORITY TO EXAMINE MANAGEMENT OF ENTITY.     (a) The attorney general may investigate the organization,   conduct, and management of a filing entity or foreign filing entity   and determine if the entity has been or is engaged in acts or   conduct in violation of:                (1)  its governing documents; or                (2)  any law of this state.          (b)  The investigation authority under Subsection (a)   includes the authority to:                (1)  require the filing entity or foreign filing entity   to file, on a form prescribed by the attorney general, a statement   or report in writing, under oath or otherwise, as to all the facts   and circumstances the attorney general considers necessary with   regard to the investigation; and                (2)  examine under oath any person in connection with   the investigation.          SECTION 2.  Section 12.155, Business Organizations Code, is   amended to read as follows:          Sec. 12.155.  FORFEITURE OF BUSINESS PRIVILEGES.  (a)     Except as provided by Subsection (b), a [A] foreign filing entity or   a filing entity that fails or refuses to permit the attorney general   to examine or make copies of a record, without regard to whether the   record is located in this or another state, forfeits the right of   the entity to do business in this state, and the entity's   registration or certificate of formation shall be revoked or   terminated.          (b)  A foreign filing entity or a filing entity that fails or   refuses to comply with Subsection (a) does not forfeit the right of   the entity to do business in this state, and the entity's   registration or certificate of formation is not subject to   revocation or termination, if the entity timely files a petition   under Section 12.157 and the court finds:                (1)  the entity has a good faith reason for refusing to   permit the attorney general to examine or make copies of specified   records under Subsection (a); and                (2)  the petition is not filed for purpose of delay.          SECTION 3.  Subchapter B, Chapter 12, Business Organizations   Code, is amended by adding Section 12.1561 to read as follows:          Sec. 12.1561.  CRIMINAL PENALTY. (a)  A person commits an   offense if, with intent to avoid, evade, or prevent compliance   wholly or partly with this subchapter, the person:                (1)  removes, conceals, or withholds a record;                (2)  destroys, mutilates, or alters a record; or                (3)  falsifies a record.          (b)  An offense under this section is a misdemeanor   punishable by:                (1)  a fine not to exceed $5,000;                (2)  confinement in jail for a term not to exceed one   year; or                (3)  both such fine and confinement.          SECTION 4.  Subchapter B, Chapter 12, Business Organizations   Code, is amended by adding Section 12.157 to read as follows:          Sec. 12.157.  PETITION. (a)  A filing entity or foreign   filing entity may file a petition to extend the return date for   production of a record requested in writing under Section 12.152 or   to modify or set aside a written request made under that section.     The petition must state good cause and must be filed:                (1)  in a district court in:                      (A)  Travis County; or                      (B)  any county in this state in which the   petitioner does business or maintains its principal office; and                (2)  not later than the earlier of:                      (A)  the return date specified in the request to   examine made under Section 12.152; or                      (B)  the 20th day after the date of service.          (b)  A person on whom a demand is served under this   subchapter shall comply with the terms of the demand unless   otherwise provided by court order.          (c)  When a petition is filed in the district court of an   appropriate county under this section, the court shall have   jurisdiction to hear and determine the matter presented and to   enter any order required to carry into effect the provisions of this   subchapter.          SECTION 5.  Section 12.156, Business Organizations Code, is   repealed.          SECTION 6.  The repeal by this Act of Section 12.156,   Business Organizations Code, does not apply to an offense committed   under that section before the effective date of the repeal.  An   offense committed before the effective date of the repeal is   governed by that section as it existed 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 the repeal if any element of the   offense occurred before that date.          SECTION 7.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.     * * * * *