89R22293 PRL-F     By: Meyer, Leach, Schofield, Anchía, H.B. No. 15       Longoria, et al.     Substitute the following for H.B. No. 15:     By:  Leach C.S.H.B. No. 15       A BILL TO BE ENTITLED   AN ACT   relating to the formation, governance, and internal management of   domestic entities.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 1.002(55-a), Business Organizations   Code, is amended to read as follows:                (55-a)  "National securities exchange" means:                      (A)  an exchange registered as a national   securities exchange under Section 6, Securities Exchange Act of   1934 (15 U.S.C. Section 78f); or                       (B)  a stock exchange that:                             (i)  has its principal office in this state;   and                            (ii)  has received approval by the   securities commissioner under Subchapter C, Chapter 4005,   Government Code.          SECTION 2.  Subchapter B, Chapter 1, Business Organizations   Code, is amended by adding Section 1.056 to read as follows:          Sec. 1.056.  LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND   GOVERNANCE OF DOMESTIC ENTITY.  The managerial officials of a   domestic entity, in exercising their powers with respect to the   domestic entity, may consider the laws and judicial decisions of   other states and the practices observed by entities formed in those   other states.  The failure or refusal of a managerial official to   consider, or to conform the exercise of the managerial official's   powers to, the laws, judicial decisions, or practices of another   state does not constitute or imply a breach of this code or of any   duty existing under the laws of this state.          SECTION 3.  Section 2.115(b), Business Organizations Code,   is amended to read as follows:          (b)  The governing documents of a domestic entity [may   require], consistent with applicable state and federal   jurisdictional requirements, may require:                (1)  that any internal entity claims shall be brought   only in a court in this state; and                (2)  that one or more courts in this state having   jurisdiction shall serve as the exclusive forum and venue for any   internal entity claims.          SECTION 4.  Subchapter B, Chapter 2, Business Organizations   Code, is amended by adding Section 2.116 to read as follows:          Sec. 2.116.  WAIVER OF TRIAL BY JURY. (a)  In this section,   "internal entity claim" has the meaning assigned by Section 2.115.          (b)  The governing documents of a domestic entity may contain   a waiver of the right to a jury trial concerning any internal entity   claim.          (c)  In a lawsuit asserting an internal entity claim, a   waiver of the right to a jury trial contained in the governing   documents of a domestic entity is enforceable, regardless of   whether the applicable governing document is signed by the members,   owners, officers, or governing persons.          (d)  A person asserting an internal entity claim is   considered to have been informed of the waiver of the right to a   jury trial contained in the governing documents and to have   knowingly waived the right in the action if the person:                (1)  voted for or affirmatively ratified the governing   document containing the waiver; or                (2)  acquired an equity security of the domestic entity   or a predecessor to the entity at a time at which the waiver was   included in the governing documents of the domestic entity or a   predecessor to the entity, as applicable.          (e)  Nothing in this section prevents an entity from showing   that a person asserting an internal entity claim knowingly and   informedly waived the right to a jury trial by any evidence   satisfactory to the court having jurisdiction, including by the   person's consent or acquiescence to the waiver contained in the   governing documents.          SECTION 5.  Section 21.218, Business Organizations Code, is   amended by amending Subsection (b) and adding Subsections (b-2) and   (b-3) to read as follows:          (b)  On written demand stating a proper purpose, a holder of   shares of a corporation for at least six months immediately   preceding the holder's demand, or a holder of at least five percent   of all of the outstanding shares of a corporation, is entitled to   examine and copy, at a reasonable time at the corporation's   principal place of business or other location approved by the   corporation and the holder, the corporation's books, records of   account, minutes, share transfer records, and other records,   whether in written or other tangible form, if the records are   [record is] reasonably related to and appropriate to examine and   copy for that proper purpose.  For purposes of this subsection, the   records of the corporation shall not include e-mails, text messages   or similar electronic communications, or information from social   media accounts unless the particular e-mail, communication, or   social media information effectuates an action by the corporation.          (b-2)  This subsection applies only to a corporation that has   a class or series of voting shares listed on a national securities   exchange or that has made an affirmative election to be governed by   Section 21.419.  For purposes of Subsection (b), a written demand   shall not be for a proper purpose if the corporation reasonably   determines that the demand is in connection with:                (1)  an active or pending derivative proceeding in the   right of the corporation under Subchapter L that is or is expected   to be instituted or maintained by the holder or the holder's   affiliate; or                 (2)  an active or pending civil lawsuit to which the   corporation, or its affiliate, and the holder, or the holder's   affiliate, are or are expected to be adversarial named parties.          (b-3)  Subsection (b-2) does not impair any rights of:                (1)  the holder or the holder's affiliate to obtain   discovery of records from the corporation in:                      (A)  a civil lawsuit described by Subsection   (b-2)(2); or                      (B)  the derivative proceeding subject to Section   21.556; or                (2)  the holder to obtain a court order to compel   production of records of the corporation for examination by the   holder as provided by Subsection (c).          SECTION 6.  Section 21.416, Business Organizations Code, is   amended by adding Subsection (g) to read as follows:          (g)  This subsection applies only to a corporation that has a   class or series of voting shares listed on a national securities   exchange or that has made an affirmative election to be governed by   Section 21.419.  The board of directors may adopt resolutions that   authorize the formation of a committee of independent and   disinterested directors to review and approve transactions,   whether or not contemplated at the time of the committee's   formation or a petition under Section 21.4161, involving the   corporation or any of its subsidiaries and a controlling   shareholder, director, or officer.          SECTION 7.  Subchapter I, Chapter 21, Business Organizations   Code, is amended by adding Section 21.4161 to read as follows:          Sec. 21.4161.  DETERMINATION OF INDEPENDENT AND   DISINTERESTED DIRECTORS. (a)  A corporation that adopts a   resolution to authorize the formation of a committee of independent   and disinterested directors under Section 21.416(g) may petition a   court having jurisdiction to hold an evidentiary hearing to   determine whether the directors appointed to the committee are   independent and disinterested with respect to any transactions   involving the corporation or any of its subsidiaries and a   controlling shareholder, director, or officer.          (b)  A petition under Subsection (a) shall be filed in the   business court unless the corporation's principal place of business   in this state is located in a county not contained within an   operating division of the business court, in which case the   petition may be filed in a district court in the county in which the   corporation's principal place of business in this state is located.          (c)  In the petition, the corporation shall designate legal   counsel to act on behalf of the corporation and its shareholders,   other than the controlling shareholder, director, or officer   involved in the transaction.          (d)  The corporation shall give notice to the corporation's   shareholders that:                (1)  a petition has been filed under this section;                (2)  identifies the court in which the petition is   filed and provides the case number for the proceeding;                (3)  identifies counsel designated to act on behalf of   the corporation and its shareholders, other than the controlling   shareholder, director, or officer involved in the transaction; and                (4)  the shareholders, other than the controlling   shareholder, director, or officer involved in the transaction, have   the right to participate in the proceeding in person or through   counsel.          (e)  If the corporation has a class of its shares listed on a   national securities exchange, the notice required by Subsection (d)   may be provided through the filing of a current report with the   United States Securities and Exchange Commission in accordance with   the requirements of the Securities Exchange Act of 1934 (15 U.S.C.   Section 78a et seq.), and any rules promulgated under that Act.          (f)  Not earlier than the 10th day after the date the notice   required under Subsection (d) is given, the court shall hold a   preliminary hearing to determine the appropriate legal counsel to   represent the corporation and its shareholders, other than the   controlling shareholder, director, or officer involved in the   transaction, whether or not the same as the legal counsel   identified in the petition. Any other legal counsel representing a   shareholder, other than the controlling shareholder, director, or   officer involved in the transaction, may participate in the hearing   to:                (1)  object to counsel designated by the corporation in   the petition on the ground that the designated counsel is   insufficiently independent and disinterested; or                (2)  request designation by the court as the   appropriate legal counsel.          (g)  After the court determines the appropriate legal   counsel under Subsection (f), the court shall promptly hold an   evidentiary hearing as to whether the directors on the committee   are independent and disinterested with respect to transactions   involving the corporation or any of its subsidiaries and a   controlling shareholder, director, or officer. The appropriate   legal counsel determined under Subsection (f) and legal counsel for   the corporation may participate in the hearing.  After hearing and   reviewing the evidence presented, the court shall make its   determination as to whether the directors on the committee are   independent and disinterested.          (h)  The court's determination that the directors are   independent and disinterested under Subsection (g) shall be   dispositive in the absence of facts, not presented to the court,   constituting evidence sufficient to prove that one or more of those   directors is not independent and disinterested with respect to a   particular transaction involving the corporation or any of its   subsidiaries and a controlling shareholder, director, or officer.          SECTION 8.  Section 21.418, Business Organizations Code, is   amended by adding Subsection (f) to read as follows:          (f)  This subsection applies only to a corporation that has a   class or series of voting shares listed on a national securities   exchange or has made an affirmative election to be governed by   Section 21.419.  Regardless of whether the conditions of Subsection   (b) are satisfied, neither the corporation nor any of the   corporation's shareholders will have a cause of action against any   director or officer for breach of duty with respect to the making,   authorization, or performance of the contract or transaction   because the director or officer had the relationship or interest   described by Subsection (a) or took any of the actions authorized by   Subsection (d) unless the cause of action is permitted by Section   21.419.           SECTION 9.  Subchapter I, Chapter 21, Business Organizations   Code, is amended by adding Section 21.419 to read as follows:          Sec. 21.419.  PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF   CERTAIN CORPORATIONS. (a)  This section applies only to a   corporation that has:                (1)  a class or series of voting shares listed on a   national securities exchange; or                (2)  included in its governing documents a statement   affirmatively electing to be governed by this section.          (b)  In taking or declining to take any action on any matters   of a corporation's business, a director or officer is presumed to   act:                (1)  in good faith;                (2)  on an informed basis;                (3)  in furtherance of the interests of the   corporation; and                (4)  in obedience to the law and the corporation's   governing documents.          (c)  Neither a corporation nor any of the corporation's   shareholders has a cause of action against a director or officer of   the corporation as a result of any act or omission in the person's   capacity as a director or officer unless:                (1)  the claimant rebuts one or more of the   presumptions established by Subsection (b); and                (2)  it is proven by the claimant that:                      (A)  the director's or officer's act or omission   constituted a breach of one or more of the person's duties as a   director or officer; and                      (B)  the breach involved fraud, intentional   misconduct, an ultra vires act, or a knowing violation of law.           (d)  The presumptions established by this section:                (1)  are in addition to any legal presumption arising   under common law or this code, in favor of any managerial official   of a corporation to which this section applies; and                (2)  do not abrogate, preempt, or lessen any other   defense, presumption, immunity, or privilege under other   constitutional, statutory, case, or common law or rule provisions,   in favor of any managerial official of any domestic entity,   including any corporation to which this section does not apply.          (e)  In alleging fraud, intentional misconduct, an ultra   vires act, or a knowing violation of the law under Subsection   (c)(2)(B), a party must state with particularity the circumstances   constituting the fraud, intentional misconduct, ultra vires act, or   knowing violation of law.          (f)  This section does not limit the effectiveness or   applicability of a provision contained in the certificate of   formation or similar instrument of a corporation limiting monetary   liability of a governing person.          SECTION 10.  Section 21.551(2), Business Organizations   Code, is amended to read as follows:                (2)  "Shareholder" includes:                      (A)  a shareholder as defined by Section 1.002;                      (B)  [or] a beneficial owner whose shares are held   in a voting trust or by a nominee on the beneficial owner's behalf;   or                       (C)  two or more shareholders acting in concert   under an informal or formal agreement or understanding with respect   to a derivative proceeding.          SECTION 11.  Section 21.552(a), Business Organizations   Code, is amended to read as follows:          (a)  Subject to Subsection (b), a shareholder may not   institute or maintain a derivative proceeding unless:                (1)  the shareholder:                      (A)  was a shareholder of the corporation at the   time of the act or omission complained of; or                      (B)  became a shareholder by operation of law   originating from a person that was a shareholder at the time of the   act or omission complained of; [and]                (2)  the shareholder fairly and adequately represents   the interests of the corporation in enforcing the right of the   corporation; and                (3)  for a corporation with common shares listed on a   national securities exchange or a corporation that has made an   affirmative election to be governed by Section 21.419 and has 500 or   more shareholders, at the time the derivative proceeding is   instituted, the shareholder beneficially owns a number of the   common shares sufficient to meet the required ownership threshold   to institute a derivative proceeding in the right of the   corporation identified in the corporation's certificate of   formation or bylaws, provided that the required ownership threshold   does not exceed three percent of the outstanding shares of the   corporation.          SECTION 12.  Section 21.554, Business Organizations Code, is   amended by amending Subsection (b) and adding Subsections (c), (d),   (e), (f), (g), (h), and (i) to read as follows:          (b)  The court shall appoint a panel under Subsection (a)(3)   if the court finds that the individuals recommended by the   corporation are independent and disinterested and are otherwise   qualified with respect to expertise, experience, independent   judgment, and other factors considered appropriate by the court   under the circumstances to make the determinations.  An individual   appointed by the court to a panel under this section may be a   director.  An individual appointed by the court to a panel under   this section may not be held liable to the corporation or the   corporation's shareholders for an action taken or omission made by   the individual in that capacity, except for an act or omission   constituting fraud or wilful misconduct.          (c)  Before the corporation's determination of how to   proceed on the allegations under Subsection (a), the corporation   may petition the court having jurisdiction to make a finding as to   whether the directors identified or appointed under Subsection   (a)(1) or (2) are independent and disinterested with respect to the   allegations made in the demand.          (d)  If a derivative proceeding has been instituted, a   petition under Subsection (c) shall be filed in the court in which   the proceeding was instituted.  If no derivative proceeding has   been instituted, a petition under Subsection (c) shall be filed in   the business court unless the corporation's principal place of   business in this state is located in a county not contained within   an operating division of the business court, in which case the   petition may be filed in a district court in the county in which the   corporation's principal place of business in this state is located.          (e)  The corporation must serve a copy of the petition on the   shareholder filing the derivative proceeding or making the demand.          (f)  Unless extended for good cause, a court in which a   petition under Subsection (c) is filed must conduct an evidentiary   hearing on the petition on or before the 45th day after the date the   petition is filed.          (g)  A shareholder on whom a petition is served under   Subsection (e) is entitled to be served with all notices and papers   filed in the action and to intervene in the action to challenge the   petition.  Unless good cause is shown, a shareholder who is not   already a party to the action must intervene not later than the   seventh day before the date the petition is heard by the court.          (h)  Unless extended for good cause, not later than the 75th   day after the date the petition is filed, the court shall sign an   order stating whether the directors are independent and   disinterested.          (i)  A court's finding that the directors or individuals are   independent and disinterested under this section shall be   dispositive in the absence of discovery of facts, not presented to   the court, constituting evidence sufficient to prove that one or   more of those directors or individuals are not independent and   disinterested.          SECTION 13.  Section 21.561, Business Organizations Code, is   amended by adding Subsection (c) to read as follows:          (c)  For purposes of Subsection (b), a substantial benefit to   the corporation does not include additional or amended disclosures   made to the shareholders, regardless of materiality.           SECTION 14.  Section 21.562(a), Business Organizations   Code, is amended to read as follows:          (a)  In a derivative proceeding brought in the right of a   foreign corporation, the matters covered by this subchapter are   governed by the laws of the jurisdiction of formation of the foreign   corporation, except for Sections 21.555, 21.560, and 21.561, which   with respect to foreign corporations are procedural provisions and   do not relate to the internal affairs of the foreign corporation,   unless applying the laws of the jurisdiction of formation of the   foreign corporation requires otherwise with respect to Section   21.555.          SECTION 15.  Subchapter F, Chapter 101, Business   Organizations Code, is amended by adding Section 101.256 to read as   follows:          Sec. 101.256.  PRESUMPTIONS FOR GOVERNING PERSONS OF CERTAIN   LIMITED LIABILITY COMPANIES. (a) This section applies only to a   limited liability company that has:                (1)  a class or series of voting membership interests   listed on a national securities exchange; or                (2)  included in its company agreement a statement   affirmatively electing to be governed by this section.          (b)  In taking or declining to take any action on any matters   of a limited liability company's business, a governing person or   officer, and each affiliate or associate of a governing person or   officer, is presumed to act:                (1)  in good faith;                (2)  on an informed basis;                (3)  in furtherance of the interests of the limited   liability company; and                (4)  in obedience to the law and the limited liability   company's company agreement.          (c)  Neither a limited liability company nor any of the   company's members has a cause of action against a governing person   or officer or any affiliate or associate of a governing person or   officer of the company as a result of any act or omission in the   person's capacity as a governing person or officer of the company   unless:                (1)  the claimant rebuts one or more of the   presumptions established by Subsection (b); and                (2)  it is proven by the claimant that:                      (A)  the act or omission of the governing person   or officer or affiliate or associate of a governing person or   officer constituted a breach of one or more of the person's duties   as a governing person or officer; and                      (B)  the breach involved fraud, intentional   misconduct, an ultra vires act, or a knowing violation of law.          (d)  The presumptions established by this section:                (1)  are in addition to any legal presumption arising   under common law or this code, in favor of any governing person or   officer to which this section applies; and                (2)  do not abrogate, preempt, or lessen any other   defense, presumption, immunity, or privilege under other   constitutional, statutory, case, or common law or rule provisions,   in favor of any governing person or officer of any domestic entity,   including any limited liability company to which this section does   not apply.          (e)  In alleging fraud, intentional misconduct, an ultra   vires act, or a knowing violation of the law under Subsection   (c)(2)(B), a party must state with particularity the circumstances   constituting the fraud, intentional misconduct, ultra vires act, or   knowing violation of law.          (f)  This section does not limit the effectiveness or   applicability of a provision contained in the certificate of   formation or company agreement or similar instrument of a limited   liability company limiting monetary liability of a governing person   or officer.          SECTION 16.  Section 101.401, Business Organizations Code,   is amended to read as follows:          Sec. 101.401.  EXPANSION, [OR] RESTRICTION, OR ELIMINATION   OF DUTIES AND LIABILITIES. The company agreement of a limited   liability company may expand, [or] restrict, or eliminate any   duties, including fiduciary duties, and related liabilities that a   member, manager, officer, or other person has to the company or to a   member or manager of the company.          SECTION 17.  Section 101.451(3), Business Organizations   Code, is amended to read as follows:                (3)  "Member" includes:                      (A)  a person who is a member or is an assignee of   a membership interest or a person who beneficially owns a   membership interest through a voting trust or a nominee on the   person's behalf; and                      (B)  two or more members described by Paragraph   (A) acting in concert under an informal or formal agreement or   understanding with respect to a derivative proceeding.          SECTION 18.  Section 101.452(a), Business Organizations   Code, is amended to read as follows:          (a)  Subject to Subsection (b), a member may not institute or   maintain a derivative proceeding unless:                (1)  the member:                      (A)  was a member of the limited liability company   at the time of the act or omission complained of; or                      (B)  became a member by operation of law   originating from a person that was a member at the time of the act or   omission complained of; [and]                (2)  the member fairly and adequately represents the   interests of the limited liability company in enforcing the right   of the limited liability company; and                (3)  for a limited liability company with membership   interests listed on a national securities exchange or that has made   an affirmative election to be governed by Section 101.256 and has   500 or more members, at the time the derivative proceeding is   instituted, the member beneficially owns a number of the membership   interests sufficient to meet the required ownership threshold to   institute a derivative proceeding in the right of the limited   liability company identified in the limited liability company's   certificate of formation or company agreement, provided that the   required ownership threshold does not exceed three percent of the   outstanding membership interests of the limited liability company.          SECTION 19.  Section 101.461, Business Organizations Code,   is amended by adding Subsection (c) to read as follows:          (c)  For purposes of Subsection (b), a substantial benefit to   the limited liability company does not include additional or   amended disclosures made to the members, regardless of materiality.          SECTION 20.  Section 101.502, Business Organizations Code,   is amended by amending Subsection (a) and adding Subsections (a-1),   (a-2), and (a-3) to read as follows:          (a)  Unless otherwise provided by the governing documents of   a limited liability company, a [A] member of a limited liability   company or an assignee of a membership interest in a limited   liability company, on written demand stating a proper purpose, is   entitled to examine and copy at a reasonable time at the limited   liability company's principal office identified under Section   101.501(c) or another location approved by the limited liability   company and the member or assignee, any records of the limited   liability company, whether in written or other tangible form, which   are reasonably related to and appropriate to examine and copy for   that proper purpose. For purposes of this subsection, the records   of the limited liability company shall not include e-mails, text   messages or similar electronic communications, or information from   social media accounts unless the particular e-mail, communication,   or social media information effectuates an action by the limited   liability company.          (a-1)  This subsection applies only to a limited liability   company that has a class or series of voting membership interests   listed on a national securities exchange or that has made an   affirmative election to be governed by Section 101.256. For   purposes of Subsection (a), a written demand may be made only by a   member or an assignee that has held the membership interest for at   least six months immediately preceding the member's or assignee's   demand.          (a-2)  This subsection applies only to a limited liability   company that has a class or series of voting membership interests   listed on a national securities exchange or that has made an   affirmative election to be governed by Section 101.256. For   purposes of Subsection (a), a written demand shall not be for a   proper purpose if the limited liability company reasonably   determines that the demand is in connection with:                (1)  an active or pending derivative proceeding in the   right of the limited liability company under Subchapter J that is or   is expected to be instituted or maintained by the member or assignee   or the member's or assignee's affiliate; or                (2)  an active or pending civil lawsuit to which the   company, or its affiliate, and the member or assignee, or the   member's or assignee's affiliate, are or are expected to be   adversarial named parties.          (a-3)  Subsection (a-2) does not impair any rights of the   member or assignee or the member's or assignee's affiliate to obtain   discovery of records from the limited liability company in:                (1)  a civil lawsuit described by Subsection (a-2)(2);   or                (2)  the derivative proceeding subject to Section   101.456.          SECTION 21.  Section 152.002, Business Organizations Code,   is amended by adding Subsection (e) to read as follows:          (e)  This subsection applies only to a limited partnership   that has a class or series of voting limited partnership interests   listed on a national securities exchange or that has made an   affirmative election to be governed by Section 153.163.   Notwithstanding Subsection (b)(2), (3), or (4), a partnership   agreement may eliminate the duty of loyalty under Section 152.205,   the duty of care under Section 152.206, and the obligation of good   faith under Section 152.204(b), to the extent the governing   documents of the partnership include a statement affirmatively   electing to do so under this subsection.          SECTION 22.  Subchapter D, Chapter 153, Business   Organizations Code, is amended by adding Section 153.163 to read as   follows:          Sec. 153.163.  PRESUMPTIONS FOR GENERAL PARTNERS AND   OFFICERS OF CERTAIN LIMITED PARTNERSHIPS. (a) This section   applies only to a limited partnership that has:                (1)  a class or series of voting limited partnership   interests listed on a national securities exchange; or                (2)  included in its governing documents a statement   affirmatively electing to be governed by this section.          (b)  In taking or declining to take any action on any matters   of a limited partnership's business, any general partner of the   limited partnership, including any director, officer, member, or   other affiliate of the general partner, is presumed to act:                (1)  in good faith;                (2)  on an informed basis;                (3)  in furtherance of the interests of the limited   partnership; and                (4)  in obedience to the law and the limited   partnership's partnership agreement.          (c)  Neither a limited partnership nor any of the limited   partnership's partners has a cause of action against a general   partner of the limited partnership, including any director,   officer, member, or other affiliate of the general partner, as a   result of any act or omission in the person's capacity as a general   partner or as an officer or director of the general partner unless:                (1)  the claimant rebuts one or more of the   presumptions established by Subsection (b); and                (2)  it is proven by the claimant that:                      (A)  the general partner's or any director,   officer, member, or other affiliate of the general partner's act or   omission constituted a breach of one or more of the person's duties   as a general partner, director, or officer; and                      (B)  the breach involved fraud, intentional   misconduct, an ultra vires act, or a knowing violation of law.          (d)  The presumptions established by this section:                (1)  are in addition to any legal presumption arising   under common law or this code, in favor of any general partner or   member or managerial official of a general partner to which this   section applies; and                (2)  do not abrogate, preempt, or lessen any other   defense, presumption, immunity, or privilege under other   constitutional, statutory, case, or common law or rule provisions,   in favor of any managerial official of any domestic entity,   including any limited partnership to which this section does not   apply.          (e)  In alleging fraud, intentional misconduct, an ultra   vires act, or a knowing violation of the law under Subsection   (c)(2)(B), a party must state with particularity the circumstances   constituting the fraud, intentional misconduct, ultra vires act, or   knowing violation of law.          (f)  This section does not limit the effectiveness or   applicability of a provision contained in the certificate of   formation or partnership agreement or similar instrument of a   partnership limiting monetary liability of a governing person.          SECTION 23.  Section 153.401(2), Business Organizations   Code, is amended to read as follows:                (2)  "Limited partner" means:                      (A)  a person who is a limited partner or is an   assignee of a partnership interest, including the partnership   interest of a general partner; and                      (B)  two or more limited partners described by   Paragraph (A) acting in concert under an informal or formal   agreement or understanding with respect to a derivative proceeding.          SECTION 24.  Section 153.402(a), Business Organizations   Code, is amended to read as follows:          (a)  Subject to Subsection (b), a limited partner may not   institute or maintain a derivative proceeding unless:                (1)  the limited partner:                      (A)  was a limited partner of the limited   partnership at the time of the act or omission complained of; or                      (B)  became a limited partner by operation of law   originating from a person that was a limited partner or general   partner at the time of the act or omission complained of; [and]                (2)  the limited partner fairly and adequately   represents the interests of the limited partnership in enforcing   the right of the limited partnership; and                (3)  for a limited partnership with limited partnership   interests listed on a national securities exchange or that has made   an affirmative election to be governed by Section 153.163 and has   500 or more limited partners, at the time the derivative proceeding   is instituted, the partner beneficially owns a number of limited   partnership interests sufficient to meet the required ownership   threshold to institute a derivative proceeding in the right of the   limited partnership identified in the limited partnership's   certificate of formation or partnership agreement, provided that   the required ownership threshold does not exceed three percent of   the outstanding limited partnership interests of the limited   partnership.          SECTION 25.  Section 153.411, Business Organizations Code,   is amended by adding Subsection (c) to read as follows:          (c)  For purposes of Subsection (b), a substantial benefit to   the limited partnership does not include additional or amended   disclosures made to the limited partners, regardless of   materiality.          SECTION 26.  Section 153.552, Business Organizations Code,   is amended by amending Subsection (a) and adding Subsections (a-1)   and (a-2) to read as follows:          (a)  Unless otherwise provided by the governing documents of   a limited partnership, on [On] written demand stating a proper   purpose, a partner or an assignee of a partnership interest in a   limited partnership is entitled to examine and copy, at a   reasonable time at the partnership's principal office identified   under Section 153.551 or other location approved by the partnership   and the partner or assignee, any records of the partnership,   whether in written or other tangible form, which are reasonably   related to and appropriate to examine and copy for that proper   purpose. For purposes of this subsection, the records of the   limited partnership shall not include e-mails, text messages or   similar electronic communications, or information from social   media accounts unless the particular e-mail, communication, or   social media information effectuates an action by the limited   partnership.          (a-1)  This subsection applies only to a limited partnership   that has a class or series of voting limited partnership interests   listed on a national securities exchange or that has made an   affirmative election to be governed by Section 153.163. For   purposes of Subsection (a), a written demand:                (1)  may be made only by a limited partner or an   assignee that has held the limited partnership interest for at   least six months immediately preceding the limited partner's or   assignee's demand; and                (2)  shall not be for a proper purpose if the limited   partnership reasonably determines that the demand is in connection   with:                      (A)  an active or pending derivative proceeding in   the right of the limited partnership under Subchapter I that is or   is expected to be instituted or maintained by the limited partner or   assignee or the limited partner's or assignee's affiliate; or                      (B)  an active or pending civil lawsuit to which   the partnership, or its affiliate, and the limited partner or   assignee, or the limited partner's or assignee's affiliate, are or   are expected to be adversarial named parties.          (a-2)  Subsection (a-1) does not impair any rights of the   limited partner or assignee or the limited partner's or assignee's   affiliate to obtain discovery of records from the limited   partnership in:                (1)  a civil lawsuit described by Subsection   (a-1)(2)(B); or                (2)  the derivative proceeding subject to Section   153.406.          SECTION 27.  Sections 21.552(a), 21.561, 101.452(a),   101.461, 153.402(a), and 153.411, Business Organizations Code, as   amended by this Act, apply only to a derivative proceeding   instituted on or after the effective date of this Act. A derivative   proceeding instituted before the effective date of this Act is   governed by the law in effect on the date the proceeding was   instituted, and the former law is continued in effect for that   purpose.          SECTION 28.  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.