Relating to the deadline for the Texas Ethics Commission to resolve certain complaints.

Contracts

• Lobbying Master Services Agreements (MSAs): Amend agreements with external firms to require notification within 24 hours of any TEC inquiry. The 120-day clock is absolute; you cannot afford a vendor sitting on a notice for a week.
• Indemnification Clauses: Strengthen indemnification language. Because the TEC is incentivized to litigate rather than negotiate, legal defense costs will rise. Ensure vendors cover these costs if their reporting errors trigger the complaint.
• Employment Agreements: Review contracts for in-house Government Affairs Directors to clarify the scope of corporate legal defense coverage for individual ethics complaints.

Hiring/Training

• Rapid Response Training: Train compliance staff and in-house counsel that a TEC inquiry is no longer an administrative annoyance but a pre-litigation event.
• Settlement Authority: The General Counsel or Compliance Officer requires pre-authorized settlement authority ranges. You will not have time to convene a Board meeting before the TEC moves to the next enforcement stage.

Reporting & Record-Keeping

• Real-Time Audit Readiness: The "amend-it-later" strategy is now high-risk. Reports must be accurate upon filing.
• Evidence Digitization: All gift logs, receipts, and contribution data must be digitized and searchable. If a complaint is filed, you must be able to produce exculpatory evidence within 48 hours to force a dismissal before the agency commits to litigation.

Fees & Costs

• Legal Defense Budget: While statutory fees remain unchanged, the Fiscal Note confirms the TEC is hiring additional attorneys specifically for hearings and litigation. Expect outside counsel costs for ethics defense to increase significantly as cases move to court faster.
• Insurance: Review Directors & Officers (D&O) and Political Activity Liability policies to ensure they cover defense costs for civil litigation initiated by a state agency.