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.