Bill Text: TX HB3540 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to financial reporting requirements for certain labor organizations; creating new criminal offenses; imposing an administrative penalty.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-04-03 - Referred to General Investigating & Ethics [HB3540 Detail]
Download: Texas-2017-HB3540-Introduced.html
85R10391 MK-F | ||
By: Button | H.B. No. 3540 |
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relating to financial reporting requirements for certain labor | ||
organizations; creating new criminal offenses; imposing an | ||
administrative penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 101, Labor Code, is amended by adding | ||
Subchapter H to read as follows: | ||
SUBCHAPTER H. REPORTING REQUIREMENTS FOR CERTAIN LABOR | ||
ORGANIZATIONS | ||
Sec. 101.351. DEFINITIONS. In this subchapter: | ||
(1) "Commission" means the Texas Ethics Commission. | ||
(2) "Labor organization" means any organization in | ||
which public employees participate and that exists wholly or partly | ||
to deal with one or more public employers concerning grievances, | ||
labor disputes, wages, hours of employment, working conditions, and | ||
terms of employment and includes a labor organization that is | ||
exempt from taxation under Section 501(c)(5), Internal Revenue Code | ||
of 1986. | ||
(3) "Member" means a person who has fulfilled the | ||
requirements for membership in a labor organization, and who has | ||
not: | ||
(A) voluntarily withdrawn from membership in the | ||
organization; or | ||
(B) been expelled or suspended from membership in | ||
the organization after appropriate proceedings consistent with | ||
lawful provisions of the constitution and bylaws of the | ||
organization. | ||
(4) "Officer" means a constitutional officer of a | ||
labor organization or any person authorized to perform the | ||
functions of the president, vice president, secretary, or | ||
treasurer, or other executive functions of a labor organization, | ||
and any member of the executive board or similar governing body of a | ||
labor organization. | ||
(5) "Public employer" means: | ||
(A) a county, a municipality, or another | ||
political subdivision of this state, including a school district; | ||
or | ||
(B) a board, a commission, an office, a | ||
department, or another agency in the executive, judicial, or | ||
legislative branch of state government, including an institution of | ||
higher education. | ||
Sec. 101.352. APPLICABILITY OF SUBCHAPTER. This subchapter | ||
does not apply to a labor organization that is required to file | ||
reports with the United States secretary of labor under Section | ||
201, Labor-Management Reporting and Disclosure Act of 1959 (29 | ||
U.S.C. Section 431) or a successor statute. | ||
Sec. 101.353. INITIAL REGISTRATION OF LABOR ORGANIZATION. | ||
(a) Not later than December 1, 2017, each labor organization must | ||
file with the commission: | ||
(1) a copy of the organization's constitution and | ||
bylaws; and | ||
(2) a report, signed by the president and secretary of | ||
the organization, or the corresponding principal officers of the | ||
organization, containing the following information: | ||
(A) the name and mailing address of the | ||
organization and any other address where the organization maintains | ||
its principal office or at which the organization's records are | ||
kept; | ||
(B) the name and title of each officer of the | ||
organization; | ||
(C) the initiation fee or fees required from a | ||
new or transferred member and fees for work permits required by the | ||
organization; | ||
(D) the regular dues or fees or other periodic | ||
payments required to remain a member of the organization; and | ||
(E) detailed statements or references to | ||
specific provisions of the constitution or bylaws of the | ||
organization that contain the provisions and procedures governing | ||
each of the following: | ||
(i) qualifications for or restrictions on | ||
membership; | ||
(ii) levying of assessments; | ||
(iii) participation in insurance or other | ||
benefit plans; | ||
(iv) authorization for disbursement of | ||
funds of the organization; | ||
(v) audit of financial transactions of the | ||
organization; | ||
(vi) the calling of regular and special | ||
meetings; | ||
(vii) the selection of officers and | ||
stewards and of any representatives to other bodies composed of | ||
labor organizations' representatives, with a specific statement of | ||
the manner in which each officer is elected, appointed, or | ||
otherwise selected; | ||
(viii) discipline or removal of officers or | ||
agents for breaches of their trust; | ||
(ix) imposition of fines against members | ||
and suspensions and expulsions of members, including the grounds | ||
for action and any requirements for notice, hearing, judgment on | ||
the evidence, and appeal procedures; | ||
(x) authorization for bargaining demands; | ||
and | ||
(xi) ratification of contract terms. | ||
(b) A labor organization must include any updates to the | ||
information reported under this section with the organization's | ||
annual report filed under Section 101.354. | ||
(c) A labor organization formed on or after December 1, | ||
2017, must file the information listed under Subsection (a) with | ||
the commission not later than the 90th day after the date the | ||
organization is formed. | ||
Sec. 101.354. ANNUAL REPORT. (a) Not later than the 90th | ||
day after the last day of a labor organization's fiscal year, the | ||
organization must file with the commission a financial report | ||
disclosing the financial condition and operations of the | ||
organization for the fiscal year. The report must be signed by the | ||
president and treasurer of the organization or the corresponding | ||
principal officers of the organization. | ||
(b) The report must contain the following information: | ||
(1) assets at the beginning and end of the fiscal year, | ||
including a schedule disclosing on separate lines the totals for: | ||
(A) cash; | ||
(B) accounts receivable, including a detailed | ||
schedule that states: | ||
(i) the name of the person or entity; | ||
(ii) the total amount receivable from that | ||
person or entity; | ||
(iii) any amounts that are 90-180 days past | ||
due; | ||
(iv) any amounts that are more than 180 days | ||
past due; and | ||
(v) any amounts that have been liquidated; | ||
(C) loans receivable, including a detailed | ||
schedule that states: | ||
(i) the name of the person or entity | ||
receiving the loan; | ||
(ii) the purpose for the loan; | ||
(iii) the security received for the loan; | ||
(iv) the terms of repayment; | ||
(v) the amount of loans outstanding from | ||
the person or entity at the start of the reporting period; | ||
(vi) the amount of loans made to the person | ||
or entity during the reporting period; | ||
(vii) the amount of cash repayments made | ||
during the reporting period; | ||
(viii) the amount of repayments made by | ||
means other than cash; and | ||
(ix) the amount of loans outstanding for | ||
each person or entity at the end of the reporting period; | ||
(D) United States Treasury securities; | ||
(E) investments, including a detailed schedule | ||
containing: | ||
(i) the name and amount of each marketable | ||
security that has a book value of $5,000 or more and that exceeds | ||
five percent of the total of all marketable securities; and | ||
(ii) the name and amount of each other | ||
investment that has a book value of $5,000 or more and that exceeds | ||
five percent of the total of all other investments; | ||
(F) fixed assets, including a detailed schedule | ||
that states: | ||
(i) the location, cost, book value, and | ||
value of property; | ||
(ii) the location, cost, total depreciation | ||
or amount expensed, book value, and value of buildings; | ||
(iii) the cost, total depreciation or | ||
amount expensed, book value, and value of automobiles and other | ||
vehicles; | ||
(iv) the cost, total depreciation or amount | ||
expensed, book value, and value of office furniture and equipment; | ||
and | ||
(v) the cost, total depreciation or amount | ||
expensed, book value, and value of other fixed assets; and | ||
(G) other assets, including a detailed schedule | ||
that states the description and value of the asset; | ||
(2) the labor organization's liabilities at the | ||
beginning and end of the fiscal year, including a schedule | ||
disclosing on separate lines the totals for: | ||
(A) accounts payable, including a detailed | ||
schedule that states: | ||
(i) the name of the person or entity; | ||
(ii) the total amount payable to that | ||
person or entity; | ||
(iii) any amounts that are 90-180 days past | ||
due; | ||
(iv) any amounts that are more than 180 days | ||
past due; and | ||
(v) any amounts that have been liquidated; | ||
(B) loans payable, including a detailed schedule | ||
that states on separate lines for each loan: | ||
(i) the source of loans payable at any time | ||
during the reporting period; | ||
(ii) the amount owed at the beginning of the | ||
reporting period; | ||
(iii) any loans obtained during the | ||
reporting period; | ||
(iv) the amount of cash repayments made | ||
during the reporting period; | ||
(v) the amount of repayments made by means | ||
other than cash during the reporting period; and | ||
(vi) the total owed at the end of the | ||
reporting period; | ||
(C) mortgages payable, including a detailed | ||
schedule that states on separate lines for each mortgage: | ||
(i) the source of mortgages payable at any | ||
time during the reporting period; | ||
(ii) the amount owed at the beginning of the | ||
reporting period; | ||
(iii) any mortgages obtained during the | ||
reporting period; | ||
(iv) the amount of cash repayments made | ||
during the reporting period; | ||
(v) the amount of repayments made by means | ||
other than cash during the reporting period; and | ||
(vi) the total owed at the end of the | ||
reporting period; and | ||
(D) other liabilities, with a separate detailed | ||
schedule that discloses on separate lines a description of each | ||
liability and the amount owed at the end of the reporting period; | ||
(3) receipts of any kind and the sources of the | ||
receipts, including a schedule disclosing on separate lines the | ||
totals for: | ||
(A) dues and agency fees and dues transmitted to | ||
the organization by a parent body or other affiliate and a separate, | ||
detailed schedule that states on separate lines any amounts | ||
received from employers through a checkoff arrangement; | ||
(B) per capita tax and a separate, detailed | ||
schedule that states on separate lines: | ||
(i) the per capita tax portion of dues | ||
received directly by the organization from members of affiliates; | ||
(ii) the per capita tax received from | ||
subordinates, either directly or through intermediaries; and | ||
(iii) the per capita tax portion of dues | ||
received through a checkoff arrangement in which local dues are | ||
remitted directly to an intermediate or parent body by employers; | ||
(C) fees, fines, assessments, and work permits; | ||
(D) sale of supplies; | ||
(E) interest; | ||
(F) dividends; | ||
(G) rents; | ||
(H) sale of investments and fixed assets, | ||
including a detailed schedule that states: | ||
(i) a description of the investment, | ||
including the address if the investment is land or buildings; | ||
(ii) the cost of the investment; | ||
(iii) the book value of the investment; | ||
(iv) the gross sales price; and | ||
(v) the amount of the investment obtained; | ||
(I) loans obtained by the organization; | ||
(J) repayments of loans made by the organization; | ||
(K) receipts on behalf of affiliates for | ||
transmittal to the affiliates; and | ||
(L) receipts on behalf of members for | ||
disbursement to the members; | ||
(4) expenditures for salaries, allowances, and other | ||
direct or indirect disbursements, including reimbursed expenses, | ||
and benefits; | ||
(5) for each officer or employee who, during the | ||
fiscal year, received more than $10,000 in the aggregate from the | ||
organization and any other affiliated labor organization, an | ||
estimation of the amount of time spent in the functional expense | ||
categories of: | ||
(A) contract administration; | ||
(B) organizing activities; | ||
(C) political activities; | ||
(D) lobbying; | ||
(E) contributions; | ||
(F) gifts and grants; | ||
(G) general overhead; and | ||
(H) union administration; | ||
(6) direct and indirect loans made to any officer, | ||
public employee, or member, which aggregated more than $250 during | ||
the fiscal year, with a statement of the purpose, security, if any, | ||
and arrangements for repayment; | ||
(7) direct and indirect loans made to any business | ||
enterprise, with a statement of the purpose, security, if any, and | ||
arrangements for repayment; | ||
(8) if the organization purchased investments or fixed | ||
assets during the fiscal year, a detailed schedule that states: | ||
(A) a description of the investment, including | ||
the address if the investment is land or buildings; | ||
(B) the cost of the investment; | ||
(C) the book value of the investment; | ||
(D) the gross sales price; and | ||
(E) the amount paid for the investment; | ||
(9) for each payer or payee for whom there is an | ||
individual receipt or disbursement of $1,000 or more, or total | ||
receipts or disbursements that aggregate to $1,000 or more during | ||
the reporting period for any of the following, an itemization | ||
schedule that includes the name and address, purpose, date, amount, | ||
and classification of the disbursement: | ||
(A) other receipts; | ||
(B) contract administration; | ||
(C) organizing activities; | ||
(D) political activities; | ||
(E) lobbying; | ||
(F) contributions, gifts, and grants; | ||
(G) general overhead; | ||
(H) union administration; and | ||
(I) benefits; and | ||
(10) any other disbursements made by the organization | ||
in an additional category prescribed by the commission. | ||
Sec. 101.355. SIMPLIFIED REPORT. (a) The commission may | ||
adopt rules allowing labor organizations with receipts of less than | ||
$250,000 in a fiscal year to file a simplified version of the report | ||
required under Section 101.354. The commission shall prescribe the | ||
form of the simplified report. | ||
(b) The commission may revoke the ability of a labor | ||
organization described under Subsection (a) to file a simplified | ||
report if the commission determines, after an investigation, proper | ||
notice to the organization, and a hearing, that the organization | ||
should file a full report in the interest of financial | ||
transparency. | ||
Sec. 101.356. FILING AND PUBLICATION OF REPORTS BY | ||
COMMISSION. (a) The commission shall create a system for the | ||
electronic filing of the reports required under this subchapter. A | ||
labor organization must file the reports required under this | ||
subchapter electronically unless the organization receives a | ||
hardship exemption from the commission. | ||
(b) The commission may adopt rules governing the format of | ||
the reports filed under this subchapter. | ||
(c) The commission shall make the reports filed under this | ||
subchapter and any data included with the reports available in a | ||
searchable format on the commission's Internet website. | ||
(d) The commission may use the information and data | ||
contained in the reports filed under this subchapter for | ||
statistical and research purposes and may publish the results of | ||
any studies or analyses produced using the data. | ||
Sec. 101.357. RETENTION OF RECORDS. A labor organization | ||
that files reports under this subchapter must maintain the records | ||
of the organization that may be used to verify, explain, clarify, or | ||
check for accuracy and completeness the information contained in | ||
each report for at least five years after the date the report was | ||
submitted. | ||
Sec. 101.358. ACCESS TO REPORTS AND INFORMATION BY MEMBERS. | ||
(a) A labor organization shall make the information contained in | ||
the reports submitted under Sections 101.353 and 101.354 available | ||
to the members of the organization. | ||
(b) A member of a labor organization is entitled to inspect | ||
the books, records, or accounts of the organization for the purpose | ||
of verifying the information contained in the reports submitted by | ||
the organization under Sections 101.353 and 101.354. | ||
(c) If a labor organization does not allow a member of the | ||
organization to conduct an inspection under Subsection (b), the | ||
member may bring an action against the organization or any officer | ||
of the organization to compel the inspection. The court may order | ||
the organization or the officer to reimburse the member for court | ||
costs and attorney's fees associated with the suit. | ||
Sec. 101.359. INVESTIGATIONS. (a) The commission may | ||
conduct investigations as necessary to determine whether a person | ||
or a labor organization has violated or is about to violate any | ||
provision of this subchapter. | ||
(b) The commission is entitled to inspect on demand and | ||
access relevant places, records, and accounts of a labor | ||
organization and interview persons as necessary to determine facts | ||
related to an investigation. | ||
(c) The commission may report the findings of an | ||
investigation conducted under this section to the appropriate | ||
prosecuting attorney for civil enforcement actions or criminal | ||
prosecutions. | ||
Sec. 101.360. ADMINISTRATIVE PENALTY FOR FAILURE TO FILE | ||
REPORT. A labor organization that does not file the report required | ||
under Section 101.354 within the time frame specified by that | ||
section is subject to an administrative penalty of $100 imposed by | ||
the commission for each additional day after the deadline that the | ||
organization does not file the report. The commission shall | ||
deposit penalties collected under this section as general revenue | ||
in the state treasury. | ||
Sec. 101.361. ENFORCEMENT; CRIMINAL OFFENSE; CIVIL ACTION. | ||
(a) If the commission determines that a person has violated or is | ||
about to violate any of the provisions of this subchapter, the | ||
commission may bring a civil action for appropriate relief, | ||
including an injunction. | ||
(b) A person who intentionally violates this subchapter | ||
shall be fined not more than $10,000 or imprisoned for not more than | ||
one year, or both. | ||
(c) A person who knowingly makes a false statement or | ||
representation of a material fact, or who knowingly fails to | ||
disclose a material fact, in any document, report, or other | ||
information required under this subchapter shall be fined not more | ||
than $10,000 or imprisoned for not more than one year, or both. | ||
(d) A person who wilfully makes a false entry in or wilfully | ||
conceals, withholds, or destroys any books, records, reports, or | ||
statements required to be kept under this subchapter shall be fined | ||
not more than $10,000 or imprisoned for not more than one year, or | ||
both. | ||
(e) Each person required to sign reports under this | ||
subchapter is considered to be personally responsible for the | ||
filing of such reports and for any statement contained in the report | ||
that the person knows to be false. | ||
SECTION 2. This Act takes effect September 1, 2017. |