87R7570 JES-D     By: Minjarez H.B. No. 4070       A BILL TO BE ENTITLED   AN ACT   relating to requiring female representation on the boards of   directors of certain publicly traded corporations; authorizing   administrative penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter I, Chapter 21, Business Organizations   Code, is amended by adding Sections 21.419 and 21.420 to read as   follows:          Sec. 21.419.  BOARD COMPOSITION FOR PUBLICLY TRADED   CORPORATION: FEMALE REPRESENTATION REQUIRED.  (a)  In this section:                (1)  "Female" means an individual who self-identifies   the individual's gender as female.                (2)  "Headquarters," with respect to a publicly traded   corporation, means the location listed on the corporation's most   recent Form 10-K filed with the Securities and Exchange Commission.                (3)  "Publicly traded corporation" means a corporation   that has a class or series of the corporation's voting shares   qualified for trading on a national securities exchange.          (b)  A publicly traded corporation whose headquarters are   located in this state must:                (1)  not later than January 1, 2026, have at least one   female director on the corporation's board of directors; and                (2)  not later than January 1, 2027, have at least:                      (A)  one female director on the corporation's   board of directors if the board is composed of four or fewer   members;                      (B)  two female directors on the corporation's   board of directors if the board is composed of five members; or                      (C)  three female directors on the corporation's   board of directors if the board is composed of at least six members.          (c)  Not later than March 1 of each year, the secretary of   state shall publish on the secretary of state's Internet website a   report regarding the compliance of publicly traded corporations   with Subsection (b) during the preceding calendar year. The report   must include:                (1)  the number of corporations that were in compliance   with Subsection (b) at any time during the preceding calendar year;                (2)  the number of corporations that were subject to   the requirements of Subsection (b) and that relocated the   corporations' headquarters outside of this state during the   preceding calendar year; and                (3)  the number of corporations that were subject to   the requirements of Subsection (b) at any time during the preceding   calendar year but are no longer subject to those requirements   because the corporation has changed to the extent it no longer meets   the definition of a publicly traded corporation.          (d)  A publicly traded corporation is considered to be in   compliance with Subsection (b) if, at any time during the preceding   calendar year, the corporation had the appropriate number of female   directors required by that subsection.          (e)  The secretary of state may adopt rules necessary to   implement this section.          Sec. 21.420.  ADMINISTRATIVE PENALTY FOR VIOLATION OF BOARD   COMPOSITION REQUIREMENTS. (a)  The secretary of state may impose an   administrative penalty on a publicly traded corporation that   violates Section 21.419 or a rule adopted under that section.          (b)  The penalty for a violation of Section 21.419(b) may be   in an amount not to exceed:                (1)  $100,000 for a first violation; and                (2)  $300,000 for a second or subsequent violation.          (c)  The penalty for a violation of a rule adopted under   Section 21.419 may be in an amount not to exceed $100,000.          (d)  The amount of an administrative penalty imposed under   this section must be based on:                (1)  the history of any previous violations;                (2)  the amount necessary to deter future violations;   and                (3)  efforts to correct the violation.          (e)  An administrative penalty collected under this section   shall be remitted to the comptroller for deposit in the general   revenue fund.          SECTION 2.  Not later than July 1, 2025, the secretary of   state shall publish on the secretary of state's Internet website a   list of publicly traded corporations, as defined by Section 21.419,   Business Organizations Code, as added by this Act, that:                (1)  are headquartered in this state; and                (2)  during the preceding calendar year, had at least   one female director on the corporation's board of directors.          SECTION 3.  The secretary of state is not required to publish   the initial report required by Section 21.419(c), Business   Organizations Code, as added by this Act, before March 1, 2026.          SECTION 4.  This Act takes effect September 1, 2021.