TX HB4079

Proxy advisors providing services to Texas-domiciled publicly traded companies must base recommendations solely on shareholders' best financial interests using quantitative, impartial standards to maximize financial return.

Recommendations based on ESG principles, diversity/equity/inclusion criteria, social credit scores, sustainability scores, or membership in organizations using non-financial evaluation factors are prohibited unless specific disclosures are made.

Proxy advisors using non-financial factors must include conspicuous warnings that advice may not serve shareholders' best financial interests, obtain written acknowledgment from recipients, notify the subject company, and disclose on their website homepage.

Conflicting voting recommendations to different shareholders on the same proposal are automatically deemed not in shareholders' best financial interest and trigger additional notification and disclosure requirements.

Affected parties including companies, shareholders, or interested parties may sue for declaratory judgment to determine if a proxy advisor violated the law; takes effect immediately with two-thirds vote or September 1, 2025.