SRC-CTC C.S.S.B. 1323 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1323
By: Sibley
Business & Commerce
3/14/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, Texas law prohibits out-of-state (foreign) corporations and
certain other entities from conducting any affairs in this state which
similarly organized entities in Texas are not permitted to conduct.  Recent
changes to Texas law, however, may inadvertently allow some of these
foreign entities to transact business within Texas that is not consistent
with Texas law.  C.S.S.B. 1323, among other things,  requires the
registration of foreign limited liability partnerships and foreign general
liability partnerships, consistent with foreign limited partnerships, and
imposes fees for each year or part of a year during which the foreign
entity transacts business in Texas without being registered. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 6132a-1, V.T.C.S., to provide that the failure
of a foreign general partnership to register in Texas does not impair the
validity of any contract or act of the foreign limited partnership, the
right of any other party to the contract to maintain any action, suit, or
proceeding on the contract, or defense by the foreign limited partnership
of any action, suit, or proceeding in any Texas court.  Requires a foreign
limited partnership transacting business in Texas without having registered
to pay the secretary of state an amount equal to the fee for registration
required under Section 9.02, plus $500, rather then $750, for each year or
part of a year during which it transacted business in Texas without having
registered. 

SECTION 2.  Amends Article 6132b-10.03, V.T.C.S., to require a foreign
limited liability partnership transacting business in Texas without being
registered in Texas to pay to the secretary of state an amount equal to the
total amounts owing under Section 10.02 plus $500 for each year or part of
a year during which the partnership transacted business in Texas without
being registered. 

SECTION 3.  Amends Article 1396-8.01, V.T.C.S., to require that no foreign
corporation be entitled to procure a certificate of authority under this
Act if members of the foreign corporation would be ineligible to organize a
corporation under the laws of this state or if the foreign corporation is
to conduct affairs which are against the public policy of this state. 

SECTION 4.  Amends Chapter 35D, Business & Commerce Code, by adding Section
35.49, as follows: 

Sec. 35.49.  PROHIBITED OUT-OF-STATE OBLIGATIONS.  Prohibits a legal right
or obligation between parties, including nonbusiness entities, arising from
an agreement, or other arrangement or legal relationship, entered into in
another state or under another state's laws from being enforced in this
state if entering into the agreement, arrangement, or relationship would
violate the law or the public policy of this state. 

 SECTION 5.  Effective date: upon passage or 90 days after adjournment.

SUMMARY OF COMMITTEE CHANGES

SECTION 4.  Amends As Filed S.B. 1323 by adding Section 35.49, Business &
Commerce Code. 

SECTION 5.  Amends As Filed S.B. 1323 by redesignating SECTION 4 as SECTION
5.