Texas 2017 - 85th Regular

Texas House Bill HB3540 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R10391 MK-F
2	2	By: Button H.B. No. 3540
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to financial reporting requirements for certain labor
8	8	organizations; creating new criminal offenses; imposing an
9	9	administrative penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 101, Labor Code, is amended by adding
12	12	Subchapter H to read as follows:
13	13	SUBCHAPTER H. REPORTING REQUIREMENTS FOR CERTAIN LABOR
14	14	ORGANIZATIONS
15	15	Sec. 101.351. DEFINITIONS. In this subchapter:
16	16	(1) "Commission" means the Texas Ethics Commission.
17	17	(2) "Labor organization" means any organization in
18	18	which public employees participate and that exists wholly or partly
19	19	to deal with one or more public employers concerning grievances,
20	20	labor disputes, wages, hours of employment, working conditions, and
21	21	terms of employment and includes a labor organization that is
22	22	exempt from taxation under Section 501(c)(5), Internal Revenue Code
23	23	of 1986.
24	24	(3) "Member" means a person who has fulfilled the
25	25	requirements for membership in a labor organization, and who has
26	26	not:
27	27	(A) voluntarily withdrawn from membership in the
28	28	organization; or
29	29	(B) been expelled or suspended from membership in
30	30	the organization after appropriate proceedings consistent with
31	31	lawful provisions of the constitution and bylaws of the
32	32	organization.
33	33	(4) "Officer" means a constitutional officer of a
34	34	labor organization or any person authorized to perform the
35	35	functions of the president, vice president, secretary, or
36	36	treasurer, or other executive functions of a labor organization,
37	37	and any member of the executive board or similar governing body of a
38	38	labor organization.
39	39	(5) "Public employer" means:
40	40	(A) a county, a municipality, or another
41	41	political subdivision of this state, including a school district;
42	42	or
43	43	(B) a board, a commission, an office, a
44	44	department, or another agency in the executive, judicial, or
45	45	legislative branch of state government, including an institution of
46	46	higher education.
47	47	Sec. 101.352. APPLICABILITY OF SUBCHAPTER. This subchapter
48	48	does not apply to a labor organization that is required to file
49	49	reports with the United States secretary of labor under Section
50	50	201, Labor-Management Reporting and Disclosure Act of 1959 (29
51	51	U.S.C. Section 431) or a successor statute.
52	52	Sec. 101.353. INITIAL REGISTRATION OF LABOR ORGANIZATION.
53	53	(a) Not later than December 1, 2017, each labor organization must
54	54	file with the commission:
55	55	(1) a copy of the organization's constitution and
56	56	bylaws; and
57	57	(2) a report, signed by the president and secretary of
58	58	the organization, or the corresponding principal officers of the
59	59	organization, containing the following information:
60	60	(A) the name and mailing address of the
61	61	organization and any other address where the organization maintains
62	62	its principal office or at which the organization's records are
63	63	kept;
64	64	(B) the name and title of each officer of the
65	65	organization;
66	66	(C) the initiation fee or fees required from a
67	67	new or transferred member and fees for work permits required by the
68	68	organization;
69	69	(D) the regular dues or fees or other periodic
70	70	payments required to remain a member of the organization; and
71	71	(E) detailed statements or references to
72	72	specific provisions of the constitution or bylaws of the
73	73	organization that contain the provisions and procedures governing
74	74	each of the following:
75	75	(i) qualifications for or restrictions on
76	76	membership;
77	77	(ii) levying of assessments;
78	78	(iii) participation in insurance or other
79	79	benefit plans;
80	80	(iv) authorization for disbursement of
81	81	funds of the organization;
82	82	(v) audit of financial transactions of the
83	83	organization;
84	84	(vi) the calling of regular and special
85	85	meetings;
86	86	(vii) the selection of officers and
87	87	stewards and of any representatives to other bodies composed of
88	88	labor organizations' representatives, with a specific statement of
89	89	the manner in which each officer is elected, appointed, or
90	90	otherwise selected;
91	91	(viii) discipline or removal of officers or
92	92	agents for breaches of their trust;
93	93	(ix) imposition of fines against members
94	94	and suspensions and expulsions of members, including the grounds
95	95	for action and any requirements for notice, hearing, judgment on
96	96	the evidence, and appeal procedures;
97	97	(x) authorization for bargaining demands;
98	98	and
99	99	(xi) ratification of contract terms.
100	100	(b) A labor organization must include any updates to the
101	101	information reported under this section with the organization's
102	102	annual report filed under Section 101.354.
103	103	(c) A labor organization formed on or after December 1,
104	104	2017, must file the information listed under Subsection (a) with
105	105	the commission not later than the 90th day after the date the
106	106	organization is formed.
107	107	Sec. 101.354. ANNUAL REPORT. (a) Not later than the 90th
108	108	day after the last day of a labor organization's fiscal year, the
109	109	organization must file with the commission a financial report
110	110	disclosing the financial condition and operations of the
111	111	organization for the fiscal year. The report must be signed by the
112	112	president and treasurer of the organization or the corresponding
113	113	principal officers of the organization.
114	114	(b) The report must contain the following information:
115	115	(1) assets at the beginning and end of the fiscal year,
116	116	including a schedule disclosing on separate lines the totals for:
117	117	(A) cash;
118	118	(B) accounts receivable, including a detailed
119	119	schedule that states:
120	120	(i) the name of the person or entity;
121	121	(ii) the total amount receivable from that
122	122	person or entity;
123	123	(iii) any amounts that are 90-180 days past
124	124	due;
125	125	(iv) any amounts that are more than 180 days
126	126	past due; and
127	127	(v) any amounts that have been liquidated;
128	128	(C) loans receivable, including a detailed
129	129	schedule that states:
130	130	(i) the name of the person or entity
131	131	receiving the loan;
132	132	(ii) the purpose for the loan;
133	133	(iii) the security received for the loan;
134	134	(iv) the terms of repayment;
135	135	(v) the amount of loans outstanding from
136	136	the person or entity at the start of the reporting period;
137	137	(vi) the amount of loans made to the person
138	138	or entity during the reporting period;
139	139	(vii) the amount of cash repayments made
140	140	during the reporting period;
141	141	(viii) the amount of repayments made by
142	142	means other than cash; and
143	143	(ix) the amount of loans outstanding for
144	144	each person or entity at the end of the reporting period;
145	145	(D) United States Treasury securities;
146	146	(E) investments, including a detailed schedule
147	147	containing:
148	148	(i) the name and amount of each marketable
149	149	security that has a book value of $5,000 or more and that exceeds
150	150	five percent of the total of all marketable securities; and
151	151	(ii) the name and amount of each other
152	152	investment that has a book value of $5,000 or more and that exceeds
153	153	five percent of the total of all other investments;
154	154	(F) fixed assets, including a detailed schedule
155	155	that states:
156	156	(i) the location, cost, book value, and
157	157	value of property;
158	158	(ii) the location, cost, total depreciation
159	159	or amount expensed, book value, and value of buildings;
160	160	(iii) the cost, total depreciation or
161	161	amount expensed, book value, and value of automobiles and other
162	162	vehicles;
163	163	(iv) the cost, total depreciation or amount
164	164	expensed, book value, and value of office furniture and equipment;
165	165	and
166	166	(v) the cost, total depreciation or amount
167	167	expensed, book value, and value of other fixed assets; and
168	168	(G) other assets, including a detailed schedule
169	169	that states the description and value of the asset;
170	170	(2) the labor organization's liabilities at the
171	171	beginning and end of the fiscal year, including a schedule
172	172	disclosing on separate lines the totals for:
173	173	(A) accounts payable, including a detailed
174	174	schedule that states:
175	175	(i) the name of the person or entity;
176	176	(ii) the total amount payable to that
177	177	person or entity;
178	178	(iii) any amounts that are 90-180 days past
179	179	due;
180	180	(iv) any amounts that are more than 180 days
181	181	past due; and
182	182	(v) any amounts that have been liquidated;
183	183	(B) loans payable, including a detailed schedule
184	184	that states on separate lines for each loan:
185	185	(i) the source of loans payable at any time
186	186	during the reporting period;
187	187	(ii) the amount owed at the beginning of the
188	188	reporting period;
189	189	(iii) any loans obtained during the
190	190	reporting period;
191	191	(iv) the amount of cash repayments made
192	192	during the reporting period;
193	193	(v) the amount of repayments made by means
194	194	other than cash during the reporting period; and
195	195	(vi) the total owed at the end of the
196	196	reporting period;
197	197	(C) mortgages payable, including a detailed
198	198	schedule that states on separate lines for each mortgage:
199	199	(i) the source of mortgages payable at any
200	200	time during the reporting period;
201	201	(ii) the amount owed at the beginning of the
202	202	reporting period;
203	203	(iii) any mortgages obtained during the
204	204	reporting period;
205	205	(iv) the amount of cash repayments made
206	206	during the reporting period;
207	207	(v) the amount of repayments made by means
208	208	other than cash during the reporting period; and
209	209	(vi) the total owed at the end of the
210	210	reporting period; and
211	211	(D) other liabilities, with a separate detailed
212	212	schedule that discloses on separate lines a description of each
213	213	liability and the amount owed at the end of the reporting period;
214	214	(3) receipts of any kind and the sources of the
215	215	receipts, including a schedule disclosing on separate lines the
216	216	totals for:
217	217	(A) dues and agency fees and dues transmitted to
218	218	the organization by a parent body or other affiliate and a separate,
219	219	detailed schedule that states on separate lines any amounts
220	220	received from employers through a checkoff arrangement;
221	221	(B) per capita tax and a separate, detailed
222	222	schedule that states on separate lines:
223	223	(i) the per capita tax portion of dues
224	224	received directly by the organization from members of affiliates;
225	225	(ii) the per capita tax received from
226	226	subordinates, either directly or through intermediaries; and
227	227	(iii) the per capita tax portion of dues
228	228	received through a checkoff arrangement in which local dues are
229	229	remitted directly to an intermediate or parent body by employers;
230	230	(C) fees, fines, assessments, and work permits;
231	231	(D) sale of supplies;
232	232	(E) interest;
233	233	(F) dividends;
234	234	(G) rents;
235	235	(H) sale of investments and fixed assets,
236	236	including a detailed schedule that states:
237	237	(i) a description of the investment,
238	238	including the address if the investment is land or buildings;
239	239	(ii) the cost of the investment;
240	240	(iii) the book value of the investment;
241	241	(iv) the gross sales price; and
242	242	(v) the amount of the investment obtained;
243	243	(I) loans obtained by the organization;
244	244	(J) repayments of loans made by the organization;
245	245	(K) receipts on behalf of affiliates for
246	246	transmittal to the affiliates; and
247	247	(L) receipts on behalf of members for
248	248	disbursement to the members;
249	249	(4) expenditures for salaries, allowances, and other
250	250	direct or indirect disbursements, including reimbursed expenses,
251	251	and benefits;
252	252	(5) for each officer or employee who, during the
253	253	fiscal year, received more than $10,000 in the aggregate from the
254	254	organization and any other affiliated labor organization, an
255	255	estimation of the amount of time spent in the functional expense
256	256	categories of:
257	257	(A) contract administration;
258	258	(B) organizing activities;
259	259	(C) political activities;
260	260	(D) lobbying;
261	261	(E) contributions;
262	262	(F) gifts and grants;
263	263	(G) general overhead; and
264	264	(H) union administration;
265	265	(6) direct and indirect loans made to any officer,
266	266	public employee, or member, which aggregated more than $250 during
267	267	the fiscal year, with a statement of the purpose, security, if any,
268	268	and arrangements for repayment;
269	269	(7) direct and indirect loans made to any business
270	270	enterprise, with a statement of the purpose, security, if any, and
271	271	arrangements for repayment;
272	272	(8) if the organization purchased investments or fixed
273	273	assets during the fiscal year, a detailed schedule that states:
274	274	(A) a description of the investment, including
275	275	the address if the investment is land or buildings;
276	276	(B) the cost of the investment;
277	277	(C) the book value of the investment;
278	278	(D) the gross sales price; and
279	279	(E) the amount paid for the investment;
280	280	(9) for each payer or payee for whom there is an
281	281	individual receipt or disbursement of $1,000 or more, or total
282	282	receipts or disbursements that aggregate to $1,000 or more during
283	283	the reporting period for any of the following, an itemization
284	284	schedule that includes the name and address, purpose, date, amount,
285	285	and classification of the disbursement:
286	286	(A) other receipts;
287	287	(B) contract administration;
288	288	(C) organizing activities;
289	289	(D) political activities;
290	290	(E) lobbying;
291	291	(F) contributions, gifts, and grants;
292	292	(G) general overhead;
293	293	(H) union administration; and
294	294	(I) benefits; and
295	295	(10) any other disbursements made by the organization
296	296	in an additional category prescribed by the commission.
297	297	Sec. 101.355. SIMPLIFIED REPORT. (a) The commission may
298	298	adopt rules allowing labor organizations with receipts of less than
299	299	$250,000 in a fiscal year to file a simplified version of the report
300	300	required under Section 101.354. The commission shall prescribe the
301	301	form of the simplified report.
302	302	(b) The commission may revoke the ability of a labor
303	303	organization described under Subsection (a) to file a simplified
304	304	report if the commission determines, after an investigation, proper
305	305	notice to the organization, and a hearing, that the organization
306	306	should file a full report in the interest of financial
307	307	transparency.
308	308	Sec. 101.356. FILING AND PUBLICATION OF REPORTS BY
309	309	COMMISSION. (a) The commission shall create a system for the
310	310	electronic filing of the reports required under this subchapter. A
311	311	labor organization must file the reports required under this
312	312	subchapter electronically unless the organization receives a
313	313	hardship exemption from the commission.
314	314	(b) The commission may adopt rules governing the format of
315	315	the reports filed under this subchapter.
316	316	(c) The commission shall make the reports filed under this
317	317	subchapter and any data included with the reports available in a
318	318	searchable format on the commission's Internet website.
319	319	(d) The commission may use the information and data
320	320	contained in the reports filed under this subchapter for
321	321	statistical and research purposes and may publish the results of
322	322	any studies or analyses produced using the data.
323	323	Sec. 101.357. RETENTION OF RECORDS. A labor organization
324	324	that files reports under this subchapter must maintain the records
325	325	of the organization that may be used to verify, explain, clarify, or
326	326	check for accuracy and completeness the information contained in
327	327	each report for at least five years after the date the report was
328	328	submitted.
329	329	Sec. 101.358. ACCESS TO REPORTS AND INFORMATION BY MEMBERS.
330	330	(a) A labor organization shall make the information contained in
331	331	the reports submitted under Sections 101.353 and 101.354 available
332	332	to the members of the organization.
333	333	(b) A member of a labor organization is entitled to inspect
334	334	the books, records, or accounts of the organization for the purpose
335	335	of verifying the information contained in the reports submitted by
336	336	the organization under Sections 101.353 and 101.354.
337	337	(c) If a labor organization does not allow a member of the
338	338	organization to conduct an inspection under Subsection (b), the
339	339	member may bring an action against the organization or any officer
340	340	of the organization to compel the inspection. The court may order
341	341	the organization or the officer to reimburse the member for court
342	342	costs and attorney's fees associated with the suit.
343	343	Sec. 101.359. INVESTIGATIONS. (a) The commission may
344	344	conduct investigations as necessary to determine whether a person
345	345	or a labor organization has violated or is about to violate any
346	346	provision of this subchapter.
347	347	(b) The commission is entitled to inspect on demand and
348	348	access relevant places, records, and accounts of a labor
349	349	organization and interview persons as necessary to determine facts
350	350	related to an investigation.
351	351	(c) The commission may report the findings of an
352	352	investigation conducted under this section to the appropriate
353	353	prosecuting attorney for civil enforcement actions or criminal
354	354	prosecutions.
355	355	Sec. 101.360. ADMINISTRATIVE PENALTY FOR FAILURE TO FILE
356	356	REPORT. A labor organization that does not file the report required
357	357	under Section 101.354 within the time frame specified by that
358	358	section is subject to an administrative penalty of $100 imposed by
359	359	the commission for each additional day after the deadline that the
360	360	organization does not file the report. The commission shall
361	361	deposit penalties collected under this section as general revenue
362	362	in the state treasury.
363	363	Sec. 101.361. ENFORCEMENT; CRIMINAL OFFENSE; CIVIL ACTION.
364	364	(a) If the commission determines that a person has violated or is
365	365	about to violate any of the provisions of this subchapter, the
366	366	commission may bring a civil action for appropriate relief,
367	367	including an injunction.
368	368	(b) A person who intentionally violates this subchapter
369	369	shall be fined not more than $10,000 or imprisoned for not more than
370	370	one year, or both.
371	371	(c) A person who knowingly makes a false statement or
372	372	representation of a material fact, or who knowingly fails to
373	373	disclose a material fact, in any document, report, or other
374	374	information required under this subchapter shall be fined not more
375	375	than $10,000 or imprisoned for not more than one year, or both.
376	376	(d) A person who wilfully makes a false entry in or wilfully
377	377	conceals, withholds, or destroys any books, records, reports, or
378	378	statements required to be kept under this subchapter shall be fined
379	379	not more than $10,000 or imprisoned for not more than one year, or
380	380	both.
381	381	(e) Each person required to sign reports under this
382	382	subchapter is considered to be personally responsible for the
383	383	filing of such reports and for any statement contained in the report
384	384	that the person knows to be false.
385	385	SECTION 2. This Act takes effect September 1, 2017.