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  H.B. No. 1493
 
 
 
 
AN ACT
  relating to the use of an entity name that falsely implies
  governmental affiliation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 6, Civil Practice and Remedies Code, is
  amended by adding Chapter 150C to read as follows:
  CHAPTER 150C. ENTITY NAME FALSELY IMPLYING GOVERNMENTAL
  AFFILIATION
         Sec. 150C.001.  DEFINITION. In this chapter, "governmental
  unit" has the meaning assigned by Section 101.001.
         Sec. 150C.002.  FALSELY IMPLYING GOVERNMENTAL AFFILIATION.
  (a) A governmental unit is entitled to enjoin another person's use
  of an entity name that falsely implies governmental affiliation
  with the governmental unit.
         (b)  In an action brought under this section, the
  governmental unit is entitled to injunctive relief throughout the
  state.
         (c)  If the court finds that the person against whom the
  injunctive relief is sought wilfully intended to imply governmental
  affiliation with the governmental unit, the court, in the court's
  discretion, may award reasonable attorney's fees and court costs to
  the governmental unit.
         SECTION 2.  Subchapter B, Chapter 5, Business Organizations
  Code, is amended by adding Sections 5.064 and 5.065 to read as
  follows:
         Sec. 5.064.  NAME FALSELY IMPLYING GOVERNMENTAL AFFILIATION
  PROHIBITED. (a) A filing entity or a foreign filing entity may not
  use a name in this state that falsely implies an affiliation with a
  governmental entity.
         (b)  The submission of a filing instrument is an affirmation
  by the organizer or by a managerial official named in the filing
  instrument that the name provided as the name of the filing entity
  does not falsely imply an affiliation with a governmental entity.
         (c)  The addition of a word, phrase, or abbreviation that is
  required to be included in the name of a domestic or foreign filing
  entity under the provisions of this chapter is not a factor when
  determining whether a name violates Subsection (a).
         (d)  For purposes of this section, an entity name means:
               (1)  the name of a domestic filing entity, as evidenced
  by its certificate of formation, as amended or restated; or
               (2)  in the case of a foreign filing entity, the name of
  the foreign filing entity or the fictitious name of a foreign filing
  entity, as evidenced by its application for registration or its
  most recent amended registration.
         (e)  The secretary of state shall adopt rules and prescribe
  procedures to implement this section.
         Sec. 5.065.  FALSE IMPLICATION OF GOVERNMENTAL AFFILIATION;
  AUTHORITY OF SECRETARY OF STATE AND ATTORNEY GENERAL. (a) On the
  written request of a governmental entity specifying the basis on
  which a filing entity's or foreign filing entity's name falsely
  implies affiliation with the governmental entity, the secretary of
  state may, in the secretary's reasonable discretion and after
  consultation with the attorney general, determine not later than
  the 30th day after the date of the secretary's acceptance of a
  filing instrument that a filing entity's or a foreign filing
  entity's name falsely implies an affiliation with a governmental
  entity in violation of Section 5.064.
         (b)  If the secretary of state determines under Subsection
  (a) that a filing entity's or foreign filing entity's name falsely
  implies an affiliation with a governmental entity, the secretary of
  state shall notify the entity in writing of the determination. The
  secretary of state shall provide the filing entity or foreign
  filing entity an opportunity to respond to the notice not later than
  the 60th day after the date of the notice, including through the
  submission of documentation verifying that the entity is affiliated
  with the governmental entity or by demonstrating that the entity's
  name does not falsely imply affiliation with the governmental
  entity.  The secretary of state shall make a final determination,
  based on the filing entity's or foreign filing entity's response, as
  to whether or not the entity's name falsely implies an affiliation
  with a governmental entity.
         (c)  After making a final determination based on the filing
  entity's or foreign filing entity's response under Subsection (b),
  the secretary of state shall notify the filing entity or foreign
  filing entity of the secretary's final determination. If the
  entity does not timely respond to notice provided to the entity
  under Subsection (b), the secretary's initial determination
  becomes final.  If the secretary of state finally determines that
  the filing entity's or foreign filing entity's name falsely implies
  an affiliation with a governmental entity, not later than the 90th
  day after the date the secretary of state sends the notification
  required by Subsection (b), the entity shall:
               (1)  cease transacting business or operating under that
  name in this state; and
               (2)  file with the secretary of state the applicable
  instrument to amend the entity's name as shown in the records of the
  secretary of state.
         (d)  If a filing entity or a foreign filing entity fails to
  take the action required by Subsection (c)(2), the secretary of
  state shall notify the attorney general of the entity's failure to
  file the applicable filing instrument.
         (e)  The attorney general may bring an action in the name of
  the state for injunctive relief to require compliance with this
  section.
         (f)  An action under this section may be brought in a
  district court in Travis County.
         (g)  The attorney general may recover reasonable expenses
  incurred in obtaining injunctive relief under this section,
  including court costs, reasonable attorney's fees, and
  investigatory costs.
         (h)  The secretary of state shall adopt rules and prescribe
  procedures to implement this section.
         (i)  Notwithstanding Subsection (a), on the written request
  of a governmental entity specifying the basis on which a filing
  entity's or foreign filing entity's name falsely implies
  affiliation with the governmental entity, the secretary of state
  may, in the secretary's reasonable discretion and after
  consultation with the attorney general, determine within eight
  years after the secretary's acceptance of a filing instrument that
  a filing entity's or a foreign filing entity's name falsely implies
  an affiliation with a governmental entity in violation of Section
  5.064. A determination made under this subsection is subject to
  Subsections (b)-(g) to the same extent as a determination made
  under Subsection (a). This subsection expires December 31, 2021.
         SECTION 3.  Not later than December 1, 2021, the secretary of
  state shall adopt rules and prescribe procedures under Section
  5.065(h), Business Organizations Code, as added by this Act.
         SECTION 4.  The secretary of state and the attorney general
  retain the authority under Section 5.065, Business Organizations
  Code, as added by this Act, to act on a written request by a
  governmental entity under Section 5.065(i), Business Organizations
  Code, as added by this Act, that is made before December 31, 2021.
         SECTION 5.  This Act takes effect September 1, 2021.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1493 was passed by the House on April
  30, 2021, by the following vote:  Yeas 126, Nays 15, 2 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 1493 on May 28, 2021, and requested the appointment of a
  conference committee to consider the differences between the two
  houses; and that the House adopted the conference committee report
  on H.B. No. 1493 on May 30, 2021, by the following vote:  Yeas 134,
  Nays 8, 3 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1493 was passed by the Senate, with
  amendments, on May 26, 2021, by the following vote:  Yeas 31, Nays
  0; at the request of the House, the Senate appointed a conference
  committee to consider the differences between the two houses; and
  that the Senate adopted the conference committee report on H.B. No.
  1493 on May 30, 2021, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor