HBA-ATS H.B. 1351 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1351 By: Woolley Business & Industry 2/17/1999 Introduced BACKGROUND AND PURPOSE Current law requires corporations, limited partnerships, registered limited liability partnerships, or limited liability companies which use an assumed name to file a certificate with the secretary of state or a county clerk of the proper county. The certificate must be executed and acknowledged by an officer, general manager, member, representative, or attorney in fact, regardless of where the certificate is filed. Deleting the requirement of acknowledgment may result in more efficient review and processing of certificates and greater consistency in all documents filed with the secretary of state. However, county officials have expressed some concern over the removal of the notarization requirement. H.B. 1351 makes a distinction between certificates filed in the Office of the Secretary of State and those filed in a county clerk's office by prescribing two distinct procedures. If the certificate is filed in the Office of the Secretary of State, the certificate must only be executed, thereby eliminating the notarization requirement. If the certificate is filed in the office of the county clerk, the certificate must be executed and acknowledged. The acknowledgment must be under oath if the certificate is filed by a representative, attorney in fact, or other identified party. This bill also allows the secretary of state to accept reproduced copies of signed original documents, deletes obsolete transitional provisions, strengthens the punishment for a violation of Chapter 36 (Assumed Business or Professional Name) of the Business & Commerce Code, and creates an offense for the submission of false or fraudulent documents. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 36.11(b), Business & Commerce Code, to prescribe two specific procedures for filing an assumed name certificate. If the certificate is filed in the office of the Secretary of State, this section requires the certificate to be executed, rather than executed and duly acknowledged, by the appropriate party for the business entity filing it. If the certificate is filed in the office of the county clerk, this section requires the certificate to be executed and acknowledged in the manner provided by Section 36.10(b) of this code. Section 36.10(b) requires that the acknowledgment must be under oath if the certificate is executed by a participant whose name is not required to be stated on the certificate, such as a representative, attorney in fact, or other identified party; the attorney in fact must be authorized in writing and the acknowledgment must contain a recitation of such authorization. Makes conforming changes. SECTION 2. Amends Section 36.13, Business & Commerce Code, as follows: Sec. 36.13. New title: DURATION AND RENEWAL OF CERTIFICATE. Deletes existing Subsections (d) and (e), which are transitional provisions regarding certificates that have been filed prior to the effective date of Chapter 36. SECTION 3. Amends Subchapter B, Chapter 36, Business & Commerce Code, by adding Section 36.18, to authorize the secretary of state to accept a reproduction of an original document required to be filed in its office. Provides that the signature on a document required to be filed may be a facsimile. SECTION 4. Amends Section 36.26, Business & Commerce Code, as follows: Sec. 36.26. New title: CRIMINAL PENALTY--GENERAL VIOLATION. Provides that a person commits an offense punishable as a Class A misdemeanor if the person, conducting business or rendering a professional service in this state under an assumed name, intentionally violates any provision of Chapter 36. SECTION 5. Amends Subchapter C, Chapter 36, Business & Commerce Code, by adding Section 36.27, as follows: Sec. 36.27. CRIMINAL PENALTY--FRAUDULENT FILING. (a) Prohibits a person from knowingly or intentionally signing and presenting for filing or causing to be presented for filing a document authorized or required to be filed under this chapter if the document indicates that the person signing the document has the authority to act on behalf of the entity for which the document is presented and the person does not have that authority, if the document contains a material false statement, or if the document is forged. (b) Provides that a person who violates Subsection (a) commits an offense, and that such an offense is punishable as if it occurred under Section 37.10 (Tampering With Governmental Record), Penal Code. Under that section, an offense is punishable as either a Class A misdemeanor; a state jail felony if the person's intent is to defraud or harm another; or a felony of the third degree if the governmental record was a license, certificate, permit, seal, title, letter of patent, or similar document issued by a governmental entity, by another state, or by the United States, unless the actor's intent is to defraud or harm another, in which event the offense is a felony of the second degree. SECTION 6. Makes application of this Act prospective SECTION 7. Effective date: September 1, 1999. SECTION 8. Emergency clause.