87S10232 MWC-F
	By: Oliverson	H.B. No. 124

	A BILL TO BE ENTITLED
	AN ACT
	relating to the Texas Free Enterprise and Antitrust Act of 1983.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 15.03, Business & Commerce Code, is
	amended by adding Subdivision (2-a) to read as follows:
	(2-a)  The term "investigative file" means any
	documentary materials or information collected, assembled, or
	maintained by or on behalf of the attorney general with respect to
	an investigation or litigation conducted under this chapter. The
	term includes:
	(A)  interagency or intra-agency communications
	or memoranda;
	(B)  notes;
	(C)  reports;
	(D)  products of discovery;
	(E)  records of internal or external meetings;
	(F)  civil investigative demands; and
	(G)  other documents and communications with the
	attorney general that are relevant to the investigation or
	litigation.
	SECTION 2.  Section 15.10, Business & Commerce Code, is
	amended by amending Subsections (b), (c), (e), (g), (h), (i), and
	(k) to read as follows:
	(b)  Authority to Issue Demand. Whenever the attorney
	general has reason to believe that any person may be in possession,
	custody, or control of any documentary material or may have any
	information relevant to a civil antitrust investigation, the
	attorney general may, prior to the institution of a civil
	proceeding, issue in writing and serve upon such person a civil
	investigative demand requiring the person to produce or make
	available such documentary material for inspection and copying, to
	answer in writing written interrogatories, to give oral testimony,
	or to provide any combination of such material, answers, and
	testimony; provided, however, that the attorney general may not
	issue and serve a demand for documentary material upon a
	proprietorship or partnership whose annual gross income does not
	exceed $5 million.
	(c)  Contents of Demand.
	(1)  Each demand shall describe the nature of the
	activities that are the subject of the investigation and shall set
	forth each statute and section of that statute that may have been or
	may be violated as a result of such activities. Each demand shall
	advise the person upon whom the demand is to be served that
	objections [the person has the right to object] to the demand may be
	made in accordance with [as provided for in] this chapter
	[section].
	(2)  Each demand for production of documentary material
	shall:
	(A)  describe the class or classes of material to
	be produced with reasonable specificity so that the material
	demanded is fairly identified;
	(B)  prescribe a return date or dates which will
	provide a reasonable period of time within which the material is to
	be produced; and
	(C)  identify the individual or individuals
	acting on behalf of the attorney general to whom the material is to
	be produced or made available for inspection and copying.
	(3)  Each demand for answers to written interrogatories
	shall:
	(A)  propound the interrogatories with
	definiteness and certainty;
	(B)  prescribe a date or dates by which answers to
	interrogatories shall be submitted; and
	(C)  identify the individual or individuals
	acting on behalf of the attorney general to whom the answers should
	be submitted.
	(4)  Each demand for the giving of oral testimony
	shall:
	(A)  prescribe a reasonable date, time, and place
	at which the testimony shall begin; and
	(B)  identify the individual or individuals
	acting on behalf of the attorney general who will conduct the
	examination.
	(5)  No demand for any product of discovery may be
	returned until 20 days after the attorney general serves a copy of
	the demand upon the person from whom the discovery was obtained.
	(e)  Service; Proof of Service.
	(1)  Service of any demand or of any petition filed
	under Subsection (f) or (h) of this section may be made upon any
	natural person by delivering a duly executed copy of the demand or
	petition to the person to be served or by mailing such copy by
	registered or certified mail, return receipt requested, to such
	person at his or her residence or principal office or place of
	business.
	(2)  Service of any demand or of any petition filed
	under Subsection (f) or (h) of this section may be made upon any
	person other than a natural person by delivering a duly executed
	copy of the demand or petition to a person to whom delivery would be
	appropriate under state law if the demand or petition were process
	in a civil suit.
	(3)  A verified return by the individual serving any
	demand or any petition filed under Subsection (f) or (h) setting
	forth the manner of service shall be proof of such service. In the
	case of service by registered or certified mail, the return shall be
	accompanied by the return post office receipt of delivery of the
	demand or petition.
	(4)  Service of any demand may be made upon any person
	by e-mail or other electronic means if the person being served has
	consented to the electronic service in writing. Electronic service
	is complete upon sending, but electronic service is not effective
	if the attorney general learns that the demand did not actually
	reach the person to be served. Written confirmation of receipt
	through electronic service by the person being served constitutes
	proof of the service.
	(g)  Compliance With Demand.
	(1)  A person on whom a demand is served shall comply
	with the terms of the demand unless otherwise provided by court
	order.
	(2)  The time for compliance with the demand in whole or
	in part shall not run during the pendency of any petition filed
	under Subsection (f) of this section; provided, however, that the
	petitioner shall comply with any portions of the demand not sought
	to be modified or set aside.
	(3)  Documentary Material.
	(A)  Any person upon whom any demand for the
	production of documentary material has been duly served under this
	section shall produce or make such material available to the
	attorney general for inspection and copying during normal business
	hours on the return date specified in the demand at the person's
	principal office or place of business or as otherwise may be agreed
	upon by the person and the attorney general. The attorney general
	shall bear the expense of any copying. The person may substitute
	copies for originals of all or part of the requested documents so
	long as the originals are made available for inspection. The person
	shall indicate in writing which if any of the documents produced
	contain trade secrets or confidential information.
	(B)  The production of documentary material in
	response to any demand shall be made under a sworn certificate in
	such form as the demand designates by a natural person having
	knowledge of the facts and circumstances relating to such
	production to the effect that all of the requested material in the
	possession, custody, or control of the person to whom the demand is
	directed has been produced.
	(4)  Interrogatories.
	(A)  Each interrogatory in any demand duly served
	under this section shall be answered separately and fully in
	writing, unless it is objected to, in which case the basis for the
	objection shall be set forth in lieu of an answer. The person shall
	indicate in writing which if any of the answers contain trade
	secrets or confidential information.
	(B)  Answers to interrogatories shall be
	submitted under a sworn certificate in such form as the related
	demand designates by a natural person having knowledge of the facts
	and circumstances relating to the preparation of the answers to the
	effect that all of the requested information in the possession,
	custody, control, or knowledge of the person to whom the demand is
	directed has been set forth fully and accurately.
	(5)  Oral Examination.
	(A)  The examination of any person pursuant to a
	demand for oral testimony duly served under this section shall be
	taken before any person authorized to administer oaths and
	affirmations by the laws of Texas or the United States. The person
	before whom the testimony is to be taken shall put the witness on
	oath or affirmation and shall personally or by someone acting under
	his or her direction and in his or her presence record the witness's
	testimony. At the expense of the attorney general, the testimony
	shall be taken stenographically and may be transcribed.
	(B)  The oral testimony of any person taken
	pursuant to a demand served under this section shall be taken in the
	county where the person resides, is found, transacts business, or
	in such other place as may be agreed upon by the person and the
	attorney general.
	(C)  Any person compelled to appear under a demand
	for oral testimony under this section may be accompanied,
	represented, and advised by counsel. Counsel may advise such
	person in confidence, either upon the request of such person or upon
	counsel's own initiative, with respect to any question arising in
	connection with the examination.
	(D)  The individual conducting the examination on
	behalf of the attorney general shall exclude from the place of
	examination all other persons except the person being examined, the
	person's counsel, the counsel of the person to whom the demand has
	been issued, the person before whom the testimony is to be taken,
	any stenographer taking the testimony, and any persons assisting
	the individual conducting the examination.
	(E)  During the examination, the person being
	examined or his or her counsel may object on the record to any
	question, in whole or in part, and shall briefly state for the
	record the reason for the objection. An objection may properly be
	made, received, and entered upon the record when it is claimed that
	such person is entitled to refuse to answer the question on grounds
	of any constitutional or other legal right or privilege, including
	the privilege against self-incrimination. Neither such person nor
	his or her counsel shall otherwise object to or refuse to answer any
	question or interrupt the oral examination. If the person refuses
	to answer any question, the attorney general may petition the
	district court in the county where the examination is being
	conducted for an order compelling the person to answer the
	question.
	(F)  If and when the testimony has been fully
	transcribed, the person before whom the testimony was taken shall
	promptly transmit the transcript of the testimony to the witness
	and a copy of the transcript to the attorney general. The witness
	shall have a reasonable opportunity to examine the transcript and
	make any changes in form or substance accompanied by a statement of
	the reasons for such changes. The witness shall then sign and
	return the transcript, unless he or she is ill, cannot be found,
	refuses to sign, or in writing waives the signing. If the witness
	does not sign the transcript within 15 days of receiving it, the
	person before whom the testimony has been given shall sign it and
	state on the record the reason, if known, for the witness's failure
	to sign. The officer shall then certify on the transcript that the
	witness was duly sworn and that the transcript is a true record of
	the testimony given by the witness and promptly transmit a copy of
	the certified transcript to the attorney general.
	(G)  Upon request, the attorney general shall
	furnish a copy of the certified transcript to the witness.
	(H)  The witness shall be entitled to the same
	fees and mileage that are paid to witnesses in the district courts
	of Texas.
	(h)  Failure To Comply With Demand.
	(1)  Petition for Enforcement. Whenever any person
	fails to comply with any demand duly served on such person under
	this section, the attorney general may file in the district court in
	Travis County or in the county in which the person resides, is
	found, or transacts business and serve on the person a petition for
	an order of the court for enforcement of this section. [If the
	person transacts business in more than one county, the petition
	shall be filed in the county of the person's principal office or
	place of business in the state or in any other county as may be
	agreed upon by the person and the attorney general.]
	(2)  Deliberate Noncompliance. Any person, who, with
	intent to avoid, evade, or prevent compliance in whole or part with
	a demand issued under this section, removes from any place,
	conceals, withholds, destroys, mutilates, alters, or by any other
	means falsifies any documentary material or otherwise provides
	inaccurate information is guilty of a misdemeanor and on conviction
	is punishable by a fine of not more than $5,000 or by confinement in
	county jail for not more than one year or by both.
	(i)  Disclosure and Use of Material and Information.
	(1)  No [Except as provided in this section or ordered
	by a court for good cause shown, no] documentary material, answers
	to interrogatories, or transcripts of oral testimony, or copies or
	contents thereof, shall be available for examination or used by any
	person other than by an authorized official, employee, or agent of
	the attorney general, except:
	(A)  by court order for good cause shown;
	(B)  with [without] the consent of:
	(i)  the person who produced the material,
	answers, or testimony; and
	(ii) [,] in the case of any product of
	discovery, [of] the person from whom the discovery was obtained;
	(C)  to an agency of this state, the United
	States, or another state or territory for official law enforcement
	purposes; or
	(D)  as provided elsewhere in this section.
	(2)  The attorney general may make available for
	inspection or prepare copies of documentary material, answers to
	interrogatories, or transcripts of oral testimony in his or her
	possession as he or she determines may be required by the state in
	the course of any investigation or a judicial proceeding in which
	the state is a party.
	(3)  The attorney general may make available for
	inspection or prepare copies of documentary material, answers to
	interrogatories, or transcripts of oral testimony in his or her
	possession as he or she determines may be required for official use
	by any officer of the State of Texas, [or of] the United States, or
	another state or territory charged with the enforcement of the laws
	of the State of Texas, [or] the United States, or that state or
	territory, as applicable; provided that any material disclosed
	under this subsection may not be used for criminal law enforcement
	purposes.
	(3-a)  The attorney general may make available for
	inspection or prepare copies of documentary material, answers to
	interrogatories, or transcripts of oral testimony in the attorney
	general's possession as may be required for official use by any
	authorized official, employee, or agent of the attorney general.
	(4)  Upon request, the attorney general shall make
	available copies of documentary material, answers to
	interrogatories, and transcripts of oral testimony for inspection
	by the person who produced such material or information and, in the
	case of a product of discovery, the person from whom the discovery
	was obtained or by any duly authorized representative of the
	person, including his or her counsel.
	(5)  Not later than 15 days prior to making public
	[disclosing] any documentary material or answers to written
	interrogatories designated as containing trade secrets or
	confidential information under this subsection, the attorney
	general shall notify the person who produced the material of the
	attorney general's intent to make the information public [such
	disclosure]. The person who produced the documentary material or
	answers to written interrogatories may petition a district court in
	any county of this state in which the person resides, does business,
	or maintains its principal office for a protective order limiting
	the terms under which the attorney general may use the [disclose
	such] trade secrets or confidential information in public,
	including in public court filings.
	(6)  Upon written request, the attorney general shall
	return documentary material produced under this section in
	connection with an antitrust investigation to the person who
	produced it whenever:
	(A)  any case or proceeding before any court
	arising out of the investigation has been completed; or
	(B)  the attorney general has decided after
	completing an examination and analysis of such material not to
	institute any case or proceeding before a court in connection with
	the investigation.
	(k)  Nonexclusive Procedures. Nothing in this section shall
	preclude the attorney general from using procedures not specified
	in the section in conducting an antitrust investigation; provided,
	however, that in conducting such an investigation, the attorney
	general shall use the procedures set forth in this section in lieu
	of those set forth in Article 1302-5.01 through Article 1302-5.06,
	Texas Miscellaneous Corporation Laws Act. Information, documentary
	materials, and communication with the attorney general provided
	under a procedure not specified in this section is confidential but
	may be used in a judicial proceeding at the attorney general's
	discretion.
	SECTION 3.  Section 15.12, Business & Commerce Code, is
	amended to read as follows:
	Sec. 15.12.  ADDITIONAL PROCEDURES. (a) In addition to the
	procedures set forth in this subchapter, the attorney general and
	any other party to a suit brought by the attorney general to enforce
	any of the prohibitions in Section 15.05 of this Act may request
	discovery and production of documents and other things, serve
	written interrogatories, and subpoena and depose witnesses in
	accordance with the applicable provisions of the Texas Rules of
	Civil Procedure and other state law relating to discovery.
	(b)  Documents and other information discovered or produced
	under Subsection (a) are confidential.
	SECTION 4.  Subchapter B, Chapter 15, Business & Commerce
	Code, is amended by adding Section 15.14 to read as follows:
	Sec. 15.14.  CONFIDENTIALITY OF INVESTIGATIVE FILES AND
	OTHER INFORMATION. The attorney general's investigative file,
	wholly or partly, and any other information or documentary material
	provided to the attorney general under this chapter are
	confidential and not subject to disclosure under Chapter 552,
	Government Code.
	SECTION 5.  The changes in law made by this Act apply only to
	a cause of action that accrues on or after the effective date of
	this Act. A cause of action that accrues before the effective date
	of this Act is governed by the law applicable to the cause of action
	immediately before that date, and that law is continued in effect
	for that purpose.
	SECTION 6.  This Act takes effect on the 91st day after the
	last day of the legislative session.