Business and Commerce Bills Passed

Governor Abbott Announces Special Session
June 7, 2017
Governor Abbott Officially Calls Legislators Back for Special Session
July 11, 2017

Texas’ 85th Regular Legislative Session has come and gone, and 1,211 bills have been signed into law – slightly below previous sessions’ average number of 1,300 – 1,400 bills. This below average number of effective bills is indicative of the challenges of the 85th Regular Session. Many bills died as they failed to reach key deadlines in the legislative process. Of course, not all bills fell victim to legislative gridlock; below is a list of some the major Business and Commerce bills passed during the regular session.

HB 1774 by Greg Bonnen (R-Friendswood) and Kelly Hancock (R-North Richland Hills) reforms the hailstorm litigation process. It applies to claims arising from losses caused by a violent act of nature, including an earthquake or earth tremor, wildfire, flood, tornado, lightning, hurricane, hail, wind, snow, or rain. The bill limits exorbitant insurance claims that arise from lawsuit abuse in connection with losses caused by certain acts of nature. To accomplish this, the bill requires the insured to give the insurance company advance notice before filing a lawsuit that informs the insurer the alleged amount owed and the amount of reasonable attorney fees expected. The bill however does not apply to lawsuits arising under policies issued by Texas’ insurance provider of last resort, the Texas Windstorm Insurance Association.
HB 2004 by Charles “Doc” Anderson (R-Waco) and Charles Perry (R-Lubbock) expands the Texas Department of Agriculture’s Texas Economic Development Fund to allow it to be used for;
  • Encourage the export of Texas agricultural products or products manufactured in rural Texas; or
  • An economic development program established through an agreement with a federal agency, foreign governmental entity, public university, or state governmental entity to encourage rural economic development.
It makes several other changes to the fund and its administration including:
  • requiring grant recipients to provide matching funds of at least 25 percent of the amount of the grant;
  • limiting the term of a loan to 20 years;
  • requiring monthly payments of principal and interest beginning within 90 days of the loan;
  • limiting the cumulative amount of loans and grants to any person to $1 million;
  • requiring the department to report on the status of the fund to the governor and legislature before each legislative session.

HB 89 by Phil King (R-Weatherford) and Brandon Creighton (R-Conroe) prohibits governmental entities from entering into contracts for goods or services with companies that boycott Israel.

SB 1289 by Brandon Creighton (R-Conroe) and Chris Paddie (R-Marshall) requires governmental entities to use iron and steel produced in the United States in the construction projects unless the preference would increase the total cost of the project by more than 20 percent or complying is inconsistent with the public interest unless U.S. iron or steel products are not produced in sufficient quantities; reasonably available; or of a satisfactory quality.

SB 1517 by Kelly Hancock (R-North Richland Hills) and Rene Oliveira (D-Brownsville) adds to the definition of “person” under the Business Organizations Code a series of a domestic limited liability company (LLC) or a foreign entity; and establishes procedures for service of process on series of limited liability companies or foreign entities. It also creates a penalty for a LLC to refuse a member of that LLC to inspect the business records of the LLC. Lastly, SB 1517 clarifies that a partnership is bound by a partnership agreement (general or limited) is bound by the partnership agreement regardless of whether the partnership has signed or expressly adopted the agreement.

HB 1463 by John Smithee (R-Amarillo) and Kel Seliger (R-Amarillo) requires a claimant to provide at least 60-days notice to a business of intent to file a claim under the Americans With Disabilities Act (ADA). The notice must state:

  • the name of the individual asserting the claim;
  • each alleged violation; and
  • the date, place and manner in which the claimant discovered the alleged violation.
The notice is prohibited from making a demand for damages, request settlement, or offer to settle a claim without a determination of whether the condition stated by the notice is excused by law or may be remedied. The claimant must prove by a preponderance of evidence that the respondent has not remedied an alleged violation, and a respondent can ask the court for an additional 60 days’ abatement of the action to complete corrections already initiated when the suit is filed. It also allows a respondent to move for dismissal without prejudice or summary judgment if the respondent has corrected the violations.