BILL ANALYSIS

C.S.H.B. 5567

By: DeAyala

Trade, Workforce & Economic Development

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that people and businesses continue to move to Texas because the state offers freedom from government overreach, high taxes, and burdensome regulation. The bill author has also informed the committee that while these pro-growth economic policies attract employers to Texas, too many companies that are located in Texas are incorporated or formed in other states due to uncertainty regarding the timely formation of business entities in Texas. While state law requires business filings to be delivered to the secretary of state using specific methods, outdated references, like facsimile transmissions, still remain in statute. C.S.H.B. 5567 seeks to update business filing methods and reform the expedited service fee structure to improve expedited filings and attract businesses to Texas.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 5567 amends the Business Organizations Code to change the required delivery methods for a filing instrument that is delivered to the secretary of state and signed by a person authorized by the Business Organizations Code to act on behalf of an applicable domestic or foreign entity in regard to the filing instrument from in person or by mail, courier, facsimile or electronic transmission, or any other comparable form of delivery, to in person or by mail, courier, electronic transmission, or any other method approved by the secretary of state. This provision applies only to a filing instrument delivered to the secretary of state on or after the bill's effective date. A filing instrument delivered before that date is governed by the law in effect on the date the filing instrument was delivered to the secretary of state, and the former law is continued in effect for that purpose.

C.S.H.B. 5567 amends the Government Code to revise the authorization for the secretary of state to set and collect fees for the expedited handling of certain records as follows:

· removes the specific fee amounts that are charged for each type of expedited handling, filing, or review and instead sets the fee for each type of expedited handling, expedited filing, or expedited review at a reasonable fee capped at $5,000;

· includes the expedited filing of a document under applicable Business Organizations Code provisions or other law among the filings for which the secretary of state may set and collect fees; and

· replaces the authorization for the secretary of state to set and collect such a fee for the expedited handling of a request for a certified copy or certificate of fact relating to a corporation, limited partnership, assumed name, trademark document, or other document filed for public record with the corporations section of the office of the secretary of state with an authorization for the secretary of state to set and collect a reasonable fee capped at $5,000 for providing the expedited handling of a request for a certified copy or certificate of fact relating to a profit or nonprofit corporation, professional corporation or association, limited or general partnership, limited liability company, assumed name, trademark document, or other document filed for public record with the appropriate division or section of the office of the secretary of state.

The bill expands the applicability of the requirement for the secretary of state to collect a fee in advance to include all fees collected for applicable expedited filings.

C.S.H.B. 5567 authorizes the secretary of state to decline a request for applicable expedited handling, filing, access, or other treatment. If the secretary of state declines a request or otherwise fails to provide expedited handling, filing, access, or other treatment, the secretary of state must issue a refund to the person of the fee paid by the person for that service. The bill defines "expedited," with respect to the handling or filing of a record, copy, or other document, as handling or filing the document in a shorter than usual time frame agreed on by the person and the secretary of state, including a time frame of less than one business day. The bill's provisions relating to expedited handling apply only to a request for expedited treatment made to the secretary of state on or after January 1, 2026. A request for expedited treatment made before that date is governed by the law in effect on the date the request was made, and the former law is continued in effect for that purpose.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 5567 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

Whereas the introduced revised the authorization for the secretary of state to set and collect fees for the expedited handling of certain records by removing the authorization to explicitly collect such fees and by capping the amount of the applicable fees at $5,000, the substitute does not remove the authorization to collect the fees and specifies that the fee capped at $5,000 is a reasonable fee.

The substitute includes the expedited filing of a document under applicable Business Organizations Code provisions or other law among the filings for which the secretary of state may collect an expedited handling fee, which the introduced did not do.

The introduced replaced the authorization for the secretary of state to set and collect an applicable fee for the expedited handling of a request for a certified copy or certificate of fact relating to a corporation, limited partnership, assumed name, trademark document, or other document filed for public record with the corporations section of the office of the secretary of state with an authorization for the secretary of state to set a fee not to exceed $5,000 for the expedited handling of a request for a certified copy or certificate of fact relating to a profit or nonprofit corporation, professional corporation or association, cooperative association, unincorporated nonprofit association, limited or general partnership, limited liability company, assumed name, trademark document, or other document filed for public record with the business filings division of the office of the secretary of state. However, the substitute instead replaces that authorization with an authorization for the secretary of state to set and collect a reasonable fee capped at $5,000 for providing the expedited handling of a request for a certified copy or certificate of fact relating to a profit or nonprofit corporation, professional corporation or association, limited or general partnership, limited liability company, assumed name, trademark document, or other document filed for public record with the appropriate division or section of the office of the secretary of state.

The substitute replaces the introduced version's definition of "expedited handling" as the processing of a document or order submitted by a person to the secretary of state as required by the Business Organizations Code or other law for which the person requires the document or order to be filed or processed in a time period agreed upon by the person and the secretary of state, including a processing time of less than one business day, with the definition of "expedited," with respect to the handling or filing of a record, copy, or other document, as handling or filing the document in a shorter than usual time frame agreed on by the person and the secretary of state, including a time frame of less than one business day.

Whereas the introduced authorized the secretary of state to decline any request for expedited handling, the substitute authorizes the secretary of state to decline a request for expedited handling, filing, access, or other treatment under provisions relating to expedited handling.

Whereas the introduced required the secretary of state to refund to a person the expedited handling fee if the secretary of state fails to process a document in a time period agreed upon by the person and the secretary of state, the substitute requires the secretary of state, if the secretary of state declines a request or otherwise fails to provide expedited handling, filing, access, or other treatment, to issue a refund to the person of the fee paid by the person for that service.

The introduced established that the bill's provisions relating to expedited handling apply only to the processing of an expedited handling submitted on or after the bill's effective date, whereas the substitute establishes that those provisions apply only to a request for expedited treatment made to the secretary of state on or after January 1, 2026.

The substitute provides for the bill's possible immediate effect, contingent on receiving the requisite constitutional vote, or, if the bill does not receive the requisite vote, for the bill to take effect September 1, 2025, whereas the introduced established that the bill's effective date is as follows:

· with respect to the bill's provisions relating to the signature and delivery of a filing instrument, on passage, or, if the bill does not receive the necessary vote, September 1, 2025; and

· with respect to the bill's provisions relating to expediting filing, January 1, 2026.