By Chisum                                             H.B. No. 3464

         Line and page numbers may not match official copy.

         Bill not drafted by TLC or Senate E&E.

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the enforcement and validity of certain out-of-state

 1-3     transactions and associations.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter D, Chapter 35, Business & Commerce

 1-6     Code, is amended by adding Section 35.49 to read as follows:

 1-7           Sec. 35.49.  PROHIBITED OUT-OF-STATE CONTRACTS.  (a)  A

 1-8     contract entered into in another state for the provision of goods

 1-9     or services may not be enforced in this state if providing the

1-10     goods or services would violate the law of this state or is against

1-11     the public policy of this state.

1-12           (b)  A judgment that arises under a contract that was entered

1-13     into in another state to provide goods or services that is

1-14     unenforceable in this state under Subsection (a) may not be

1-15     enforced in this state.

1-16           SECTION 2.  Subchapter A, Chapter 36, Business & Commerce

1-17     Code, is amended by adding Section 36.04 to read as follows:

1-18           Sec. 36.04.  CERTAIN PROHIBITED OUT-OF-STATE BUSINESS

1-19     ENTITIES.  A professional business association formed or

1-20     established under the laws of another state may not do business in

1-21     this state or be recognized in this state if the requirements for

1-22     the formation of the professional business association in the other

 2-1     state are not substantially similar to the requirements for the

 2-2     formation of a professional business association in this state.

 2-3           SECTION 3.  The Texas Non-Profit Corporation Act (Article

 2-4     1396-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

 2-5     adding Article 2.01A to read as follows:

 2-6           Art. 2.01A.  ACTS AGAINST PUBLIC POLICY OF STATE.  A

 2-7     non-profit corporation, including a charitable non-business entity,

 2-8     formed under the laws of another state that seeks to operate in

 2-9     this state is prohibited from operating in this state if:

2-10                 (1)  the non-profit corporation is formed of members

2-11     who would be ineligible to form such an entity in this state; or

2-12                 (2)  the purpose for which the non-profit corporation

2-13     was formed is illegal or against the public policy of this state.

2-14           SECTION 4.  This Act takes effect September 1, 1997.

2-15           SECTION 5.  The importance of this legislation and the

2-16     crowded condition of the calendars in both houses create an

2-17     emergency and an imperative public necessity that the

2-18     constitutional rule requiring bills to be read on three several

2-19     days in each house be suspended, and this rule is hereby suspended.