HBA-TBM S.B. 1323 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1323 By: Sibley Business & Industry 4/5/2001 Engrossed BACKGROUND AND PURPOSE Currently, Texas law prohibits foreign corporations and certain other entities from conducting any affairs in this state which similarly organized entities in Texas are not permitted to conduct. However, recent changes to Texas law may inadvertently allow some of these foreign entities to transact business within Texas that is not consistent with Texas law. Senate Bill 1323 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 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 Senate Bill 1323 amends the Texas Revised Limited Partnership Act 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. The bill reduces the amount a foreign limited partnership is required to pay to the secretary of state for transacting business in Texas without first having registered from the registration fee plus $750 to the registration fee plus $500 for each year or part of a year it transacted business without being registered. The bill requires 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 from a derivative action plus $500 for each year or part of a year during which the partnership transacted business in Texas without being registered. The bill prohibits a foreign corporation from being entitled to procure a certificate of authority 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 any affairs which are against the public policy of this state. The bill prohibits a legal right or obligation between parties 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. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect on the 91st day after adjournment.