HB 15

89R22293 PRL-F
		By: Meyer, Leach, Schofield, Anchía,
  H.B. No. 15
		    Longoria, et al.
  Substitute the following for H.B. No. 15:
  By:  Leach
  C.S.H.B. No. 15
  A BILL TO BE ENTITLED
  AN ACT
  relating to the formation, governance, and internal management of
  domestic entities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002(55-a), Business Organizations
  Code, is amended to read as follows:
               (55-a)  "National securities exchange" means:
                     (A)  an exchange registered as a national
  securities exchange under Section 6, Securities Exchange Act of
  1934 (15 U.S.C. Section 78f); or 
                     (B)  a stock exchange that: 
                           (i)  has its principal office in this state;
  and
                           (ii)  has received approval by the
  securities commissioner under Subchapter C, Chapter 4005,
  Government Code.
         SECTION 2.  Subchapter B, Chapter 1, Business Organizations
  Code, is amended by adding Section 1.056 to read as follows:
         Sec. 1.056.  LAWS GOVERNING FORMATION, INTERNAL AFFAIRS, AND
  GOVERNANCE OF DOMESTIC ENTITY.  The managerial officials of a
  domestic entity, in exercising their powers with respect to the
  domestic entity, may consider the laws and judicial decisions of
  other states and the practices observed by entities formed in those
  other states.  The failure or refusal of a managerial official to
  consider, or to conform the exercise of the managerial official's
  powers to, the laws, judicial decisions, or practices of another
  state does not constitute or imply a breach of this code or of any
  duty existing under the laws of this state.
         SECTION 3.  Section 2.115(b), Business Organizations Code,
  is amended to read as follows:
         (b)  The governing documents of a domestic entity [may
  require], consistent with applicable state and federal
  jurisdictional requirements, may require:
               (1)  that any internal entity claims shall be brought
  only in a court in this state; and
               (2)  that one or more courts in this state having
  jurisdiction shall serve as the exclusive forum and venue for any
  internal entity claims.
         SECTION 4.  Subchapter B, Chapter 2, Business Organizations
  Code, is amended by adding Section 2.116 to read as follows:
         Sec. 2.116.  WAIVER OF TRIAL BY JURY.  (a)  In this section,
  "internal entity claim" has the meaning assigned by Section 2.115.
         (b)  The governing documents of a domestic entity may contain
  a waiver of the right to a jury trial concerning any internal entity
  claim.
         (c)  In a lawsuit asserting an internal entity claim, a
  waiver of the right to a jury trial contained in the governing
  documents of a domestic entity is enforceable, regardless of
  whether the applicable governing document is signed by the members,
  owners, officers, or governing persons.
         (d)  A person asserting an internal entity claim is
  considered to have been informed of the waiver of the right to a
  jury trial contained in the governing documents and to have
  knowingly waived the right in the action if the person:
               (1)  voted for or affirmatively ratified the governing
  document containing the waiver; or
               (2)  acquired an equity security of the domestic entity
  or a predecessor to the entity at a time at which the waiver was
  included in the governing documents of the domestic entity or a
  predecessor to the entity, as applicable.
         (e)  Nothing in this section prevents an entity from showing
  that a person asserting an internal entity claim knowingly and
  informedly waived the right to a jury trial by any evidence
  satisfactory to the court having jurisdiction, including by the
  person's consent or acquiescence to the waiver contained in the
  governing documents.
         SECTION 5.  Section 21.218, Business Organizations Code, is
  amended by amending Subsection (b) and adding Subsections (b-2) and
  (b-3) to read as follows:
         (b)  On written demand stating a proper purpose, a holder of
  shares of a corporation for at least six months immediately
  preceding the holder's demand, or a holder of at least five percent
  of all of the outstanding shares of a corporation, is entitled to
  examine and copy, at a reasonable time at the corporation's
  principal place of business or other location approved by the
  corporation and the holder, the corporation's books, records of
  account, minutes, share transfer records, and other records,
  whether in written or other tangible form, if the records are
  [record is] reasonably related to and appropriate to examine and
  copy for that proper purpose.  For purposes of this subsection, the
  records of the corporation shall not include e-mails, text messages
  or similar electronic communications, or information from social
  media accounts unless the particular e-mail, communication, or
  social media information effectuates an action by the corporation.
         (b-2)  This subsection applies only to a corporation that has
  a class or series of voting shares listed on a national securities
  exchange or that has made an affirmative election to be governed by
  Section 21.419.  For purposes of Subsection (b), a written demand
  shall not be for a proper purpose if the corporation reasonably
  determines that the demand is in connection with:
               (1)  an active or pending derivative proceeding in the
  right of the corporation under Subchapter L that is or is expected
  to be instituted or maintained by the holder or the holder's
  affiliate; or 
               (2)  an active or pending civil lawsuit to which the
  corporation, or its affiliate, and the holder, or the holder's
  affiliate, are or are expected to be adversarial named parties.
         (b-3)  Subsection (b-2) does not impair any rights of:
               (1)  the holder or the holder's affiliate to obtain
  discovery of records from the corporation in:
                     (A)  a civil lawsuit described by Subsection
  (b-2)(2); or
                     (B)  the derivative proceeding subject to Section
  21.556; or
               (2)  the holder to obtain a court order to compel
  production of records of the corporation for examination by the
  holder as provided by Subsection (c).
         SECTION 6.  Section 21.416, Business Organizations Code, is
  amended by adding Subsection (g) to read as follows:
         (g)  This subsection applies only to a corporation that has a
  class or series of voting shares listed on a national securities
  exchange or that has made an affirmative election to be governed by
  Section 21.419.  The board of directors may adopt resolutions that
  authorize the formation of a committee of independent and
  disinterested directors to review and approve transactions,
  whether or not contemplated at the time of the committee's
  formation or a petition under Section 21.4161, involving the
  corporation or any of its subsidiaries and a controlling
  shareholder, director, or officer.
         SECTION 7.  Subchapter I, Chapter 21, Business Organizations
  Code, is amended by adding Section 21.4161 to read as follows:
         Sec. 21.4161.  DETERMINATION OF INDEPENDENT AND
  DISINTERESTED DIRECTORS.  (a)  A corporation that adopts a
  resolution to authorize the formation of a committee of independent
  and disinterested directors under Section 21.416(g) may petition a
  court having jurisdiction to hold an evidentiary hearing to
  determine whether the directors appointed to the committee are
  independent and disinterested with respect to any transactions
  involving the corporation or any of its subsidiaries and a
  controlling shareholder, director, or officer.
         (b)  A petition under Subsection (a) shall be filed in the
  business court unless the corporation's principal place of business
  in this state is located in a county not contained within an
  operating division of the business court, in which case the
  petition may be filed in a district court in the county in which the
  corporation's principal place of business in this state is located.
         (c)  In the petition, the corporation shall designate legal
  counsel to act on behalf of the corporation and its shareholders,
  other than the controlling shareholder, director, or officer
  involved in the transaction.
         (d)  The corporation shall give notice to the corporation's
  shareholders that:
               (1)  a petition has been filed under this section;
               (2)  identifies the court in which the petition is
  filed and provides the case number for the proceeding;
               (3)  identifies counsel designated to act on behalf of
  the corporation and its shareholders, other than the controlling
  shareholder, director, or officer involved in the transaction; and
               (4)  the shareholders, other than the controlling
  shareholder, director, or officer involved in the transaction, have
  the right to participate in the proceeding in person or through
  counsel.
         (e)  If the corporation has a class of its shares listed on a
  national securities exchange, the notice required by Subsection (d)
  may be provided through the filing of a current report with the
  United States Securities and Exchange Commission in accordance with
  the requirements of the Securities Exchange Act of 1934 (15 U.S.C.
  Section 78a et seq.), and any rules promulgated under that Act.
         (f)  Not earlier than the 10th day after the date the notice
  required under Subsection (d) is given, the court shall hold a
  preliminary hearing to determine the appropriate legal counsel to
  represent the corporation and its shareholders, other than the
  controlling shareholder, director, or officer involved in the
  transaction, whether or not the same as the legal counsel
  identified in the petition.  Any other legal counsel representing a
  shareholder, other than the controlling shareholder, director, or
  officer involved in the transaction, may participate in the hearing
  to:
               (1)  object to counsel designated by the corporation in
  the petition on the ground that the designated counsel is
  insufficiently independent and disinterested; or
               (2)  request designation by the court as the
  appropriate legal counsel.
         (g)  After the court determines the appropriate legal
  counsel under Subsection (f), the court shall promptly hold an
  evidentiary hearing as to whether the directors on the committee
  are independent and disinterested with respect to transactions
  involving the corporation or any of its subsidiaries and a
  controlling shareholder, director, or officer.  The appropriate
  legal counsel determined under Subsection (f) and legal counsel for
  the corporation may participate in the hearing.  After hearing and
  reviewing the evidence presented, the court shall make its
  determination as to whether the directors on the committee are
  independent and disinterested.
         (h)  The court's determination that the directors are
  independent and disinterested under Subsection (g) shall be
  dispositive in the absence of facts, not presented to the court,
  constituting evidence sufficient to prove that one or more of those
  directors is not independent and disinterested with respect to a
  particular transaction involving the corporation or any of its
  subsidiaries and a controlling shareholder, director, or officer.
         SECTION 8.  Section 21.418, Business Organizations Code, is
  amended by adding Subsection (f) to read as follows:
         (f)  This subsection applies only to a corporation that has a
  class or series of voting shares listed on a national securities
  exchange or has made an affirmative election to be governed by
  Section 21.419.  Regardless of whether the conditions of Subsection
  (b) are satisfied, neither the corporation nor any of the
  corporation's shareholders will have a cause of action against any
  director or officer for breach of duty with respect to the making,
  authorization, or performance of the contract or transaction
  because the director or officer had the relationship or interest
  described by Subsection (a) or took any of the actions authorized by
  Subsection (d) unless the cause of action is permitted by Section
  21.419. 
         SECTION 9.  Subchapter I, Chapter 21, Business Organizations
  Code, is amended by adding Section 21.419 to read as follows:
         Sec. 21.419.  PRESUMPTIONS FOR DIRECTORS AND OFFICERS OF
  CERTAIN CORPORATIONS.  (a)  This section applies only to a
  corporation that has:
               (1)  a class or series of voting shares listed on a
  national securities exchange; or
               (2)  included in its governing documents a statement
  affirmatively electing to be governed by this section.
         (b)  In taking or declining to take any action on any matters
  of a corporation's business, a director or officer is presumed to
  act:
               (1)  in good faith;
               (2)  on an informed basis;
               (3)  in furtherance of the interests of the
  corporation; and
               (4)  in obedience to the law and the corporation's
  governing documents.
         (c)  Neither a corporation nor any of the corporation's
  shareholders has a cause of action against a director or officer of
  the corporation as a result of any act or omission in the person's
  capacity as a director or officer unless:
               (1)  the claimant rebuts one or more of the
  presumptions established by Subsection (b); and
               (2)  it is proven by the claimant that:
                     (A)  the director's or officer's act or omission
  constituted a breach of one or more of the person's duties as a
  director or officer; and
                     (B)  the breach involved fraud, intentional
  misconduct, an ultra vires act, or a knowing violation of law. 
         (d)  The presumptions established by this section:
               (1)  are in addition to any legal presumption arising
  under common law or this code, in favor of any managerial official
  of a corporation to which this section applies; and
               (2)  do not abrogate, preempt, or lessen any other
  defense, presumption, immunity, or privilege under other
  constitutional, statutory, case, or common law or rule provisions,
  in favor of any managerial official of any domestic entity,
  including any corporation to which this section does not apply.
         (e)  In alleging fraud, intentional misconduct, an ultra
  vires act, or a knowing violation of the law under Subsection
  (c)(2)(B), a party must state with particularity the circumstances
  constituting the fraud, intentional misconduct, ultra vires act, or
  knowing violation of law.
         (f)  This section does not limit the effectiveness or
  applicability of a provision contained in the certificate of
  formation or similar instrument of a corporation limiting monetary
  liability of a governing person.
         SECTION 10.  Section 21.551(2), Business Organizations
  Code, is amended to read as follows:
               (2)  "Shareholder" includes:
                     (A)  a shareholder as defined by Section 1.002;
                     (B)  [or] a beneficial owner whose shares are held
  in a voting trust or by a nominee on the beneficial owner's behalf;
  or 
                     (C)  two or more shareholders acting in concert
  under an informal or formal agreement or understanding with respect
  to a derivative proceeding.
         SECTION 11.  Section 21.552(a), Business Organizations
  Code, is amended to read as follows:
         (a)  Subject to Subsection (b), a shareholder may not
  institute or maintain a derivative proceeding unless:
               (1)  the shareholder:
                     (A)  was a shareholder of the corporation at the
  time of the act or omission complained of; or
                     (B)  became a shareholder by operation of law
  originating from a person that was a shareholder at the time of the
  act or omission complained of; [and]
               (2)  the shareholder fairly and adequately represents
  the interests of the corporation in enforcing the right of the
  corporation; and
               (3)  for a corporation with common shares listed on a
  national securities exchange or a corporation that has made an
  affirmative election to be governed by Section 21.419 and has 500 or
  more shareholders, at the time the derivative proceeding is
  instituted, the shareholder beneficially owns a number of the
  common shares sufficient to meet the required ownership threshold
  to institute a derivative proceeding in the right of the
  corporation identified in the corporation's certificate of
  formation or bylaws, provided that the required ownership threshold
  does not exceed three percent of the outstanding shares of the
  corporation.
         SECTION 12.  Section 21.554, Business Organizations Code, is
  amended by amending Subsection (b) and adding Subsections (c), (d),
  (e), (f), (g), (h), and (i) to read as follows:
         (b)  The court shall appoint a panel under Subsection (a)(3)
  if the court finds that the individuals recommended by the
  corporation are independent and disinterested and are otherwise
  qualified with respect to expertise, experience, independent
  judgment, and other factors considered appropriate by the court
  under the circumstances to make the determinations.  An individual
  appointed by the court to a panel under this section may be a
  director.  An individual appointed by the court to a panel under
  this section may not be held liable to the corporation or the
  corporation's shareholders for an action taken or omission made by
  the individual in that capacity, except for an act or omission
  constituting fraud or wilful misconduct.
         (c)  Before the corporation's determination of how to
  proceed on the allegations under Subsection (a), the corporation
  may petition the court having jurisdiction to make a finding as to
  whether the directors identified or appointed under Subsection
  (a)(1) or (2) are independent and disinterested with respect to the
  allegations made in the demand.
         (d)  If a derivative proceeding has been instituted, a
  petition under Subsection (c) shall be filed in the court in which
  the proceeding was instituted.  If no derivative proceeding has
  been instituted, a petition under Subsection (c) shall be filed in
  the business court unless the corporation's principal place of
  business in this state is located in a county not contained within
  an operating division of the business court, in which case the
  petition may be filed in a district court in the county in which the
  corporation's principal place of business in this state is located.
         (e)  The corporation must serve a copy of the petition on the
  shareholder filing the derivative proceeding or making the demand.
         (f)  Unless extended for good cause, a court in which a
  petition under Subsection (c) is filed must conduct an evidentiary
  hearing on the petition on or before the 45th day after the date the
  petition is filed.
         (g)  A shareholder on whom a petition is served under
  Subsection (e) is entitled to be served with all notices and papers
  filed in the action and to intervene in the action to challenge the
  petition.  Unless good cause is shown, a shareholder who is not
  already a party to the action must intervene not later than the
  seventh day before the date the petition is heard by the court.
         (h)  Unless extended for good cause, not later than the 75th
  day after the date the petition is filed, the court shall sign an
  order stating whether the directors are independent and
  disinterested.
         (i)  A court's finding that the directors or individuals are
  independent and disinterested under this section shall be
  dispositive in the absence of discovery of facts, not presented to
  the court, constituting evidence sufficient to prove that one or
  more of those directors or individuals are not independent and
  disinterested.
         SECTION 13.  Section 21.561, Business Organizations Code, is
  amended by adding Subsection (c) to read as follows:
         (c)  For purposes of Subsection (b), a substantial benefit to
  the corporation does not include additional or amended disclosures
  made to the shareholders, regardless of materiality. 
         SECTION 14.  Section 21.562(a), Business Organizations
  Code, is amended to read as follows:
         (a)  In a derivative proceeding brought in the right of a
  foreign corporation, the matters covered by this subchapter are
  governed by the laws of the jurisdiction of formation of the foreign
  corporation, except for Sections 21.555, 21.560, and 21.561, which
  with respect to foreign corporations are procedural provisions and
  do not relate to the internal affairs of the foreign corporation,
  unless applying the laws of the jurisdiction of formation of the
  foreign corporation requires otherwise with respect to Section
  21.555.
         SECTION 15.  Subchapter F, Chapter 101, Business
  Organizations Code, is amended by adding Section 101.256 to read as
  follows:
         Sec. 101.256.  PRESUMPTIONS FOR GOVERNING PERSONS OF CERTAIN
  LIMITED LIABILITY COMPANIES.  (a)  This section applies only to a
  limited liability company that has:
               (1)  a class or series of voting membership interests
  listed on a national securities exchange; or
               (2)  included in its company agreement a statement
  affirmatively electing to be governed by this section.
         (b)  In taking or declining to take any action on any matters
  of a limited liability company's business, a governing person or
  officer, and each affiliate or associate of a governing person or
  officer, is presumed to act:
               (1)  in good faith;
               (2)  on an informed basis;
               (3)  in furtherance of the interests of the limited
  liability company; and
               (4)  in obedience to the law and the limited liability
  company's company agreement.
         (c)  Neither a limited liability company nor any of the
  company's members has a cause of action against a governing person
  or officer or any affiliate or associate of a governing person or
  officer of the company as a result of any act or omission in the
  person's capacity as a governing person or officer of the company
  unless:
               (1)  the claimant rebuts one or more of the
  presumptions established by Subsection (b); and
               (2)  it is proven by the claimant that:
                     (A)  the act or omission of the governing person
  or officer or affiliate or associate of a governing person or
  officer constituted a breach of one or more of the person's duties
  as a governing person or officer; and
                     (B)  the breach involved fraud, intentional
  misconduct, an ultra vires act, or a knowing violation of law.
         (d)  The presumptions established by this section:
               (1)  are in addition to any legal presumption arising
  under common law or this code, in favor of any governing person or
  officer to which this section applies; and
               (2)  do not abrogate, preempt, or lessen any other
  defense, presumption, immunity, or privilege under other
  constitutional, statutory, case, or common law or rule provisions,
  in favor of any governing person or officer of any domestic entity,
  including any limited liability company to which this section does
  not apply.
         (e)  In alleging fraud, intentional misconduct, an ultra
  vires act, or a knowing violation of the law under Subsection
  (c)(2)(B), a party must state with particularity the circumstances
  constituting the fraud, intentional misconduct, ultra vires act, or
  knowing violation of law.
         (f)  This section does not limit the effectiveness or
  applicability of a provision contained in the certificate of
  formation or company agreement or similar instrument of a limited
  liability company limiting monetary liability of a governing person
  or officer.
         SECTION 16.  Section 101.401, Business Organizations Code,
  is amended to read as follows:
         Sec. 101.401.  EXPANSION, [OR] RESTRICTION, OR ELIMINATION
  OF DUTIES AND LIABILITIES.  The company agreement of a limited
  liability company may expand, [or] restrict, or eliminate any
  duties, including fiduciary duties, and related liabilities that a
  member, manager, officer, or other person has to the company or to a
  member or manager of the company.
         SECTION 17.  Section 101.451(3), Business Organizations
  Code, is amended to read as follows:
               (3)  "Member" includes:
                     (A)  a person who is a member or is an assignee of
  a membership interest or a person who beneficially owns a
  membership interest through a voting trust or a nominee on the
  person's behalf; and
                     (B)  two or more members described by Paragraph
  (A) acting in concert under an informal or formal agreement or
  understanding with respect to a derivative proceeding.
         SECTION 18.  Section 101.452(a), Business Organizations
  Code, is amended to read as follows:
         (a)  Subject to Subsection (b), a member may not institute or
  maintain a derivative proceeding unless:
               (1)  the member:
                     (A)  was a member of the limited liability company
  at the time of the act or omission complained of; or
                     (B)  became a member by operation of law
  originating from a person that was a member at the time of the act or
  omission complained of; [and]
               (2)  the member fairly and adequately represents the
  interests of the limited liability company in enforcing the right
  of the limited liability company; and
               (3)  for a limited liability company with membership
  interests listed on a national securities exchange or that has made
  an affirmative election to be governed by Section 101.256 and has
  500 or more members, at the time the derivative proceeding is
  instituted, the member beneficially owns a number of the membership
  interests sufficient to meet the required ownership threshold to
  institute a derivative proceeding in the right of the limited
  liability company identified in the limited liability company's
  certificate of formation or company agreement, provided that the
  required ownership threshold does not exceed three percent of the
  outstanding membership interests of the limited liability company.
         SECTION 19.  Section 101.461, Business Organizations Code,
  is amended by adding Subsection (c) to read as follows:
         (c)  For purposes of Subsection (b), a substantial benefit to
  the limited liability company does not include additional or
  amended disclosures made to the members, regardless of materiality.
         SECTION 20.  Section 101.502, Business Organizations Code,
  is amended by amending Subsection (a) and adding Subsections (a-1),
  (a-2), and (a-3) to read as follows:
         (a)  Unless otherwise provided by the governing documents of
  a limited liability company, a [A] member of a limited liability
  company or an assignee of a membership interest in a limited
  liability company, on written demand stating a proper purpose, is
  entitled to examine and copy at a reasonable time at the limited
  liability company's principal office identified under Section
  101.501(c) or another location approved by the limited liability
  company and the member or assignee, any records of the limited
  liability company, whether in written or other tangible form, which
  are reasonably related to and appropriate to examine and copy for
  that proper purpose.  For purposes of this subsection, the records
  of the limited liability company shall not include e-mails, text
  messages or similar electronic communications, or information from
  social media accounts unless the particular e-mail, communication,
  or social media information effectuates an action by the limited
  liability company.
         (a-1)  This subsection applies only to a limited liability
  company that has a class or series of voting membership interests
  listed on a national securities exchange or that has made an
  affirmative election to be governed by Section 101.256.  For
  purposes of Subsection (a), a written demand may be made only by a
  member or an assignee that has held the membership interest for at
  least six months immediately preceding the member's or assignee's
  demand.
         (a-2)  This subsection applies only to a limited liability
  company that has a class or series of voting membership interests
  listed on a national securities exchange or that has made an
  affirmative election to be governed by Section 101.256.  For
  purposes of Subsection (a), a written demand shall not be for a
  proper purpose if the limited liability company reasonably
  determines that the demand is in connection with:
               (1)  an active or pending derivative proceeding in the
  right of the limited liability company under Subchapter J that is or
  is expected to be instituted or maintained by the member or assignee
  or the member's or assignee's affiliate; or
               (2)  an active or pending civil lawsuit to which the
  company, or its affiliate, and the member or assignee, or the
  member's or assignee's affiliate, are or are expected to be
  adversarial named parties.
         (a-3)  Subsection (a-2) does not impair any rights of the
  member or assignee or the member's or assignee's affiliate to obtain
  discovery of records from the limited liability company in:
               (1)  a civil lawsuit described by Subsection (a-2)(2);
  or
               (2)  the derivative proceeding subject to Section
  101.456.
         SECTION 21.  Section 152.002, Business Organizations Code,
  is amended by adding Subsection (e) to read as follows:
         (e)  This subsection applies only to a limited partnership
  that has a class or series of voting limited partnership interests
  listed on a national securities exchange or that has made an
  affirmative election to be governed by Section 153.163.
  Notwithstanding Subsection (b)(2), (3), or (4), a partnership
  agreement may eliminate the duty of loyalty under Section 152.205,
  the duty of care under Section 152.206, and the obligation of good
  faith under Section 152.204(b), to the extent the governing
  documents of the partnership include a statement affirmatively
  electing to do so under this subsection.
         SECTION 22.  Subchapter D, Chapter 153, Business
  Organizations Code, is amended by adding Section 153.163 to read as
  follows:
         Sec. 153.163.  PRESUMPTIONS FOR GENERAL PARTNERS AND
  OFFICERS OF CERTAIN LIMITED PARTNERSHIPS.  (a)  This section
  applies only to a limited partnership that has:
               (1)  a class or series of voting limited partnership
  interests listed on a national securities exchange; or
               (2)  included in its governing documents a statement
  affirmatively electing to be governed by this section.
         (b)  In taking or declining to take any action on any matters
  of a limited partnership's business, any general partner of the
  limited partnership, including any director, officer, member, or
  other affiliate of the general partner, is presumed to act:
               (1)  in good faith;
               (2)  on an informed basis;
               (3)  in furtherance of the interests of the limited
  partnership; and
               (4)  in obedience to the law and the limited
  partnership's partnership agreement.
         (c)  Neither a limited partnership nor any of the limited
  partnership's partners has a cause of action against a general
  partner of the limited partnership, including any director,
  officer, member, or other affiliate of the general partner, as a
  result of any act or omission in the person's capacity as a general
  partner or as an officer or director of the general partner unless:
               (1)  the claimant rebuts one or more of the
  presumptions established by Subsection (b); and
               (2)  it is proven by the claimant that:
                     (A)  the general partner's or any director,
  officer, member, or other affiliate of the general partner's act or
  omission constituted a breach of one or more of the person's duties
  as a general partner, director, or officer; and
                     (B)  the breach involved fraud, intentional
  misconduct, an ultra vires act, or a knowing violation of law.
         (d)  The presumptions established by this section:
               (1)  are in addition to any legal presumption arising
  under common law or this code, in favor of any general partner or
  member or managerial official of a general partner to which this
  section applies; and
               (2)  do not abrogate, preempt, or lessen any other
  defense, presumption, immunity, or privilege under other
  constitutional, statutory, case, or common law or rule provisions,
  in favor of any managerial official of any domestic entity,
  including any limited partnership to which this section does not
  apply.
         (e)  In alleging fraud, intentional misconduct, an ultra
  vires act, or a knowing violation of the law under Subsection
  (c)(2)(B), a party must state with particularity the circumstances
  constituting the fraud, intentional misconduct, ultra vires act, or
  knowing violation of law.
         (f)  This section does not limit the effectiveness or
  applicability of a provision contained in the certificate of
  formation or partnership agreement or similar instrument of a
  partnership limiting monetary liability of a governing person.
         SECTION 23.  Section 153.401(2), Business Organizations
  Code, is amended to read as follows:
               (2)  "Limited partner" means:
                     (A)  a person who is a limited partner or is an
  assignee of a partnership interest, including the partnership
  interest of a general partner; and
                     (B)  two or more limited partners described by
  Paragraph (A) acting in concert under an informal or formal
  agreement or understanding with respect to a derivative proceeding.
         SECTION 24.  Section 153.402(a), Business Organizations
  Code, is amended to read as follows:
         (a)  Subject to Subsection (b), a limited partner may not
  institute or maintain a derivative proceeding unless:
               (1)  the limited partner:
                     (A)  was a limited partner of the limited
  partnership at the time of the act or omission complained of; or
                     (B)  became a limited partner by operation of law
  originating from a person that was a limited partner or general
  partner at the time of the act or omission complained of; [and]
               (2)  the limited partner fairly and adequately
  represents the interests of the limited partnership in enforcing
  the right of the limited partnership; and
               (3)  for a limited partnership with limited partnership
  interests listed on a national securities exchange or that has made
  an affirmative election to be governed by Section 153.163 and has
  500 or more limited partners, at the time the derivative proceeding
  is instituted, the partner beneficially owns a number of limited
  partnership interests sufficient to meet the required ownership
  threshold to institute a derivative proceeding in the right of the
  limited partnership identified in the limited partnership's
  certificate of formation or partnership agreement, provided that
  the required ownership threshold does not exceed three percent of
  the outstanding limited partnership interests of the limited
  partnership.
         SECTION 25.  Section 153.411, Business Organizations Code,
  is amended by adding Subsection (c) to read as follows:
         (c)  For purposes of Subsection (b), a substantial benefit to
  the limited partnership does not include additional or amended
  disclosures made to the limited partners, regardless of
  materiality.
         SECTION 26.  Section 153.552, Business Organizations Code,
  is amended by amending Subsection (a) and adding Subsections (a-1)
  and (a-2) to read as follows:
         (a)  Unless otherwise provided by the governing documents of
  a limited partnership, on [On] written demand stating a proper
  purpose, a partner or an assignee of a partnership interest in a
  limited partnership is entitled to examine and copy, at a
  reasonable time at the partnership's principal office identified
  under Section 153.551 or other location approved by the partnership
  and the partner or assignee, any records of the partnership,
  whether in written or other tangible form, which are reasonably
  related to and appropriate to examine and copy for that proper
  purpose.  For purposes of this subsection, the records of the
  limited partnership shall not include e-mails, text messages or
  similar electronic communications, or information from social
  media accounts unless the particular e-mail, communication, or
  social media information effectuates an action by the limited
  partnership.
         (a-1)  This subsection applies only to a limited partnership
  that has a class or series of voting limited partnership interests
  listed on a national securities exchange or that has made an
  affirmative election to be governed by Section 153.163.  For
  purposes of Subsection (a), a written demand:
               (1)  may be made only by a limited partner or an
  assignee that has held the limited partnership interest for at
  least six months immediately preceding the limited partner's or
  assignee's demand; and
               (2)  shall not be for a proper purpose if the limited
  partnership reasonably determines that the demand is in connection
  with:
                     (A)  an active or pending derivative proceeding in
  the right of the limited partnership under Subchapter I that is or
  is expected to be instituted or maintained by the limited partner or
  assignee or the limited partner's or assignee's affiliate; or
                     (B)  an active or pending civil lawsuit to which
  the partnership, or its affiliate, and the limited partner or
  assignee, or the limited partner's or assignee's affiliate, are or
  are expected to be adversarial named parties.
         (a-2)  Subsection (a-1) does not impair any rights of the
  limited partner or assignee or the limited partner's or assignee's
  affiliate to obtain discovery of records from the limited
  partnership in:
               (1)  a civil lawsuit described by Subsection
  (a-1)(2)(B); or
               (2)  the derivative proceeding subject to Section
  153.406.
         SECTION 27.  Sections 21.552(a), 21.561, 101.452(a),
  101.461, 153.402(a), and 153.411, Business Organizations Code, as
  amended by this Act, apply only to a derivative proceeding
  instituted on or after the effective date of this Act.  A derivative
  proceeding instituted before the effective date of this Act is
  governed by the law in effect on the date the proceeding was
  instituted, and the former law is continued in effect for that
  purpose.
         SECTION 28.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2025.