HBA-CCH H.B. 2187 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2187
By: Davis, Yvonne
Business & Industry
3/29/2001
Introduced



BACKGROUND AND PURPOSE 

Out-of-state corporations that conduct business in Texas must register with
the secretary of state and secure a registered agent.  The registered agent
serves as the corporation's representative in the event that a customer
files a complaint or needs product liability information.  Problems arise
when out-of-state corporations cease to conduct business in Texas or change
registered agents without notifying the secretary of state.  Customers may
have difficulty locating the corporation and, under current law, the
secretary of state can only penalize a corporation by canceling the
corporation's charter, which is an impractical penalty for a corporation
that no longer conducts business in Texas.  House Bill 2187 imposes a civil
penalty on out-of-state corporations that cease business activities or
change registered agents without notifying the secretary of state.   

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. 

ANALYSIS

House Bill 2187 amends the Government Code to provide that a person who is
required to file a change of principal office in Texas or another state, a
change of registered office or agent, or a certificate of withdrawal with
the secretary of state commits an offense if the person does not file
before the earlier of the 11th day after the date of the change or
withdrawal, or the date the filing is otherwise required by law. H.B. 2187
provides that a person who violates this provision is liable to the state
for a civil penalty in an amount not to exceed $10,000 for each violation.
The attorney general or the prosecuting attorney in the county in which the
violation occurs may bring suit to recover the civil penalty.  The bill
also authorizes the attorney general to bring an action in the name of the
state to restrain or enjoin a person from violating this provision. 

EFFECTIVE DATE

September 1, 2001.