House Bill No. 4079 introduces a new subchapter, Subchapter T, to the Business Organizations Code, specifically addressing proxy advisory services for companies domiciled in Texas. The bill defines key terms such as "Company," "Company proposal," "Investment manager," "Proxy advisor," "Proxy advisory services," "Proxy proposal," and "Shareholder." It establishes that proxy advisors must provide their services solely in the best financial interest of shareholders, based on quantitative and impartial standards, and outlines that any advisory services not meeting this criterion must include a conspicuous warning and additional disclosure requirements.

Furthermore, the bill mandates that if a proxy advisor provides conflicting voting recommendations to different shareholders, it must notify all parties involved and disclose the nature of the conflict. Affected parties, including companies and shareholders, are granted the right to seek a declaratory judgment to determine if a proxy advisor has violated the provisions of this subchapter. The changes will apply only to proxy advisory services rendered after the effective date of the Act, with services provided before that date governed by the previous law. The Act will take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if such a vote is not achieved.

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