85R8600 YDB-F     By: Capriglione H.B. No. 1295       A BILL TO BE ENTITLED   AN ACT   relating to the disclosure of interested parties by business   entities contracting with governmental entities and state   agencies; authorizing a civil penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Section 2252.908, Government   Code, is amended to read as follows:          Sec. 2252.908.  DISCLOSURE OF INTERESTED PARTIES; CIVIL   PENALTY.          SECTION 2.  Section 2252.908(a), Government Code, is amended   by amending Subdivisions (1), (2), and (3) and adding Subdivisions   (1-a), (1-b), (3-a), (3-b), (3-c), and (5) to read as follows:                (1)  "Business entity" means any entity recognized by   law through which business is conducted with a governmental entity   or state agency. The term includes [, including] a sole   proprietorship, partnership, or corporation. The term does not   include the United States, a federal agency, a state agency, or   another governmental entity.                (1-a)  "Contract" means a binding agreement between a   governmental entity or state agency and a business entity effective   on the earlier of the date the governing body of the governmental   entity or state agency votes to approve the contract or the date the   governmental entity or state agency becomes bound under the   contract. The term includes an amendment to or an extension or   renewal of the contract.                (1-b)  "Controlling interest" means:                      (A)  an ownership or participating interest in a   business entity represented by a unit, percentage, share, stock, or   other acknowledgment of ownership or participating interest in an   amount that exceeds five percent of the total ownership or   participating interest in the business entity;                      (B)  membership on the board of directors or other   governing body of a business entity, provided the composition of   the board or governing body does not exceed 10 members; or                      (C)  service as an officer of a business entity   that has not more than four officers or service as one of the four   highest ranking officers of a business entity with more than four   officers, excluding an officer of a publicly held business entity   or its wholly owned subsidiary.                (2)  "Governmental entity" means a municipality,   county, public school district, open-enrollment charter school, or   special-purpose district or authority.                (3)  "Interested party" means a person who has a   controlling interest in a business entity with whom a governmental   entity or state agency contracts or who is an [actively   participates in facilitating the contract or negotiating the terms   of the contract, including a broker,] intermediary[, adviser, or   attorney] for the business entity.                (3-a)  "Intermediary" means a person who actively   participates in facilitating or negotiating a contract, including a   broker, adviser, attorney, or agent for or representative of a   business entity, and who:                      (A)  receives compensation from the business   entity for the person's participation;                      (B)  communicates directly regarding the contract   with the governmental entity or state agency for the business   entity; and                      (C)  is not:                            (i)  an employee of the business entity or of   a person with a controlling interest in the business entity; or                            (ii)  an interested party with a controlling   interest in the business entity.                (3-b)  "Person" has the meaning assigned by Section   311.005.                (3-c)  "Signed" includes the use of any symbol executed   or adopted by a person that is evidence of present intent to   authenticate a writing, including an electronic signature.                (5)  "Value" means, with respect to a contract, the   amount of consideration received or to be received by a business   entity from a governmental entity or state agency under the   contract.          SECTION 3.  Section 2252.908, Government Code, is amended by   amending Subsections (b), (c), (e), and (f) and adding Subsections   (d-1), (e-1), (h), and (i) to read as follows:          (b)  This section applies only to a contract of a   governmental entity or state agency that requires the expenditure   of the governmental entity's or state agency's money and that:                (1)  requires an action or vote by the governing body of   the entity or agency before the contract may be signed; or                (2)  has a value of at least $1 million.          (c)  Notwithstanding Subsection (b), this section does not   apply to:                (1)  a sponsored research contract of an institution of   higher education;                (2)  an interagency contract of a state agency or an   institution of higher education; [or]                (3)  a contract related to health and human services   if:                      (A)  the value of the contract cannot be   determined at the time the contract is executed; and                      (B)  any qualified vendor is eligible for the   contract;                (4)  a contract with a publicly traded business entity,   including a wholly owned subsidiary of the business entity;                (5)  a contract related to a state of disaster declared   by the governor under Section 418.014 that requires an immediate   disbursement of state money to preserve or protect the public   health or safety, to preserve property, or for public necessity;                (6)  a contract that is necessary to prevent   unforeseen, imminent damage to public machinery, equipment, or   other property;                (7)  a contract related to a subsequent sale of a   municipal bond after the initial bond sale;                (8)  a contract with a federally insured financial   institution;                (9)  a contract with an electric utility as that term is   defined by Section 31.002, Utilities Code;                (10)  a contract with a gas utility engaged in the   wholesale business of transporting or distributing gas for public   consumption;                (11)  a contract for an insurance policy regulated by   the Texas Department of Insurance that is purchased by a   governmental entity or state agency;                (12)  an interlocal contract of a local governmental   entity; or                (13)  a contract related to a public security, as that   term is defined by Section 1201.002, that is not a debt.          (d-1)  A business entity that submits a disclosure of   interested parties under Subsection (d) shall submit a modified   disclosure of interested parties for the contract if there is any   change from the interested parties previously disclosed.  The   modified disclosure must be submitted on or before the next   anniversary of the date the signed contract was submitted to the   governmental entity or state agency under Subsection (d) that   occurs after the change in interested parties.          (e)  The disclosure of interested parties or modified   disclosure of interested parties must be submitted on a form   prescribed by the Texas Ethics Commission that includes:                (1)  a list of each interested party for the contract of   which the contracting business entity is aware; and                (2)  a written, unsworn declaration subscribed by [the   signature of] the authorized agent of the contracting business   entity as true[, acknowledging that the disclosure is made under   oath and] under penalty of perjury that is in substantially the   following form:                "My name is ________________________________, my          date of birth is _________________, and my address is          _____________, ____________, _________, ____________,             (Street)        (City)      (State)    (Zip Code)          __________________.  I declare under penalty of                   (Country)          perjury that the foregoing is true and correct.                Executed in _______ County, State of ________, on   the ________ day of ________, ________.                                  (Month)   (Year)   ____________________   Declarant".          (e-1)  The written, unsworn declaration described by   Subsection (e)(2) may be executed using the electronic signature of   the authorized agent of the contracting business entity.          (f)  Not later than the 30th day after the date the parties   become bound under a contract for which a disclosure of interested   parties is filed or the date a modified disclosure of interested   parties is filed [governmental entity or state agency receives a   disclosure of interested parties required under this section], the   governmental entity or state agency shall submit [a copy of the   disclosure] to the Texas Ethics Commission an acknowledgment that   the governmental entity or state agency has received the disclosure   or modified disclosure, as applicable.          (h)  A business entity that fails to submit to a governmental   entity or state agency a disclosure of interested parties or   modified disclosure of interested parties required by this section   is liable for a civil penalty of $500 for the first day the   violation occurs and $100 for each additional day the violation   occurs, not to exceed the lesser of the total amount prescribed by   rule or $10,000.  The governmental entity or state agency shall   immediately notify the Texas Ethics Commission if a business entity   fails to submit a disclosure or modified disclosure on or before the   30th day after the date the disclosure is due.  The commission shall   immediately provide to the business entity written notice of the   violation and civil penalty.  If the business entity fails to submit   the disclosure  or modified disclosure on or before the 10th day   after the date the notice is provided, the business entity is liable   to this state for the civil penalty.          (i)  The attorney general, at the request of the Texas Ethics   Commission, may sue to collect a civil penalty imposed under   Subsection (h). The attorney general and the commission may   recover reasonable expenses incurred in obtaining a civil penalty   under that subsection, including investigation and court costs,   reasonable attorney's fees, witness fees, and other expenses.          SECTION 4.  Not later than December 1, 2017, the Texas Ethics   Commission shall adopt rules and modify the disclosure of   interested parties form as necessary to comply with the changes in   law made by this Act.          SECTION 5.  The changes in law made by this Act apply only to   a contract entered into or amended on or after January 1, 2018.          SECTION 6.  This Act takes effect September 1, 2017.