Bill Text: TX HB3540 | 2017-2018 | 85th Legislature | Introduced

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Bill Title: Relating to financial reporting requirements for certain labor organizations; creating new criminal offenses; imposing an administrative penalty.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2017-04-03 - Referred to General Investigating & Ethics [HB3540 Detail]

Download: Texas-2017-HB3540-Introduced.html

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85R10391 MK-F
By: Button H.B. No. 3540

A BILL TO BE ENTITLED
AN ACT
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(A) voluntarily withdrawn from membership in the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.