(The Center Square) – Texas scores two more court victories in a wide-ranging small business federal regulation case that a federal judge ruled unconstitutional, and in a federal agency regulation regarding parental rights and child health care. Ta.
First, a federal district court judge on Tuesday issued a nationwide injunction blocking Congressional reporting requirements under the Corporate Transparency Act, calling the law “likely to be unconstitutional.” Ta. Congress passed the law in 2021, later overriding former President Donald Trump’s veto.
After President Trump’s veto was overridden, Texas Top Shop and others filed suit against U.S. Attorney General Merrick Garland. Texas Attorney General Ken Paxton filed a court brief in support of the Texas companies.
The law required companies formed under state law to disclose the personal information of interested parties, including physical addresses, identification documents and other sensitive information, to the Treasury Department’s Financial Crimes Enforcement Network.
A representative from the U.S. Small Business Administration’s SCORE Foundation said in an email to small business owners obtained by Center Square: “New reporting rules went into effect on January 1, 2024, requiring online submission of beneficiary information,” (BOI) and Financial Crimes Enforcement Network. The penalty for violation is $500 per day and up to two years in prison. ”
“Who does this affect? Single-member LLCs; multi-member LLCs; S and C corporations. When do I have to file? New business in 2024 – within 90 days of formation. New businesses after 2025 – within 30 days of establishment; existing businesses – until December 31, 2024; changes of ownership and address after 30 days; Please visit https://www.fincen.gov/boi for more information.
Paxton’s office notes that penalties for violations can include fines of up to $500,000 and 10 years in prison.
“However, the Constitution does not give Congress the authority to unilaterally regulate the approximately 32.6 million organizations that have been granted formal legal personality by the states,” Paxton said.
“The so-called ‘Corporate Transparency Act’ was an unconstitutional attempt by the federal government to undermine state authority and crush small businesses with regulations, fines, and threats,” he said.
Judge Amos Mazant agreed. Citing claims made in several lawsuits, he said: Our constitution is a written constitution. Similar commitments to the people and the nation are not hidden. Courts must enforce them. “The powers of the Legislature are defined and limited, and…those limits must not be misunderstood or forgotten, as the Constitution is written.” Courts defer to Congress on policy issues; Interpreting the Constitution is an area beyond the authority of Congress. ”
Mazzant said the CTA was “unprecedented” and “a doubly significant departure from history.” First, it represents an attempt by the federal government to monitor corporations established under state law, an issue that the federalist system leaves almost exclusively to a few states. Second, the CTA abolishes the anonymity that has been a feature of company formation designed by various states. ”
He said the law was likely unconstitutional because it was “outside the authority of Congress.” “Because the reporting rule implements the CTA, it is likely to be unconstitutional for the same reason.”
The ruling is “a major victory for American entrepreneurs as a nationwide injunction will prevent this law from taking effect,” Paxton said.
In another legal battle with the U.S. Department of Health and Human Services, Texas announced last week that it would not enforce rules requiring companies that receive Title X funding to administer contraceptives to minors without parental consent. won.
Paxton filed a lawsuit in July claiming the rule violates Texas law. District courts and the Fifth Circuit Court of Appeals, where he filed his lawsuit, previously ruled that the Title X program “must comply with Texas law requiring parental consent before dispensing prescription contraceptives to minors; The Biden administration cannot use Title X law to prescribe contraceptives to minors, the court ruled. “preempts” those parental consent laws,” the Texas brief argued.
The rule prohibited Title X projects from notifying parents or guardians that minors in their custody were receiving prescription contraceptives or other “family planning services.” If they did not comply, they risked losing federal funding. Texas law requires parents to consent to their child’s medical care.
With just weeks left in the Biden administration’s term, the health service acknowledged it would not “enforce the regulations at issue in Texas,” effectively revoking the regulations. In response, Paxton filed a notice of dismissal with the court stating, “Defendants have represented that HHS does not enforce the challenged agency regulations in Texas.” Texas considered the binding effect of the notice.
Dismissal without prejudice “ensures that Texas health care providers are not forced to violate state law under threat of losing Title X funding,” Paxton said. “The Biden-Harris Administration threatened to withhold taxpayer funds to force health care workers to violate state laws and provide contraceptives to children without parental supervision. We won a total victory and forced the outgoing government to abandon its illegal policies.”
