Texas Senate Bill SB1701

Texas 2009 - 81st Regular

• Out of Senate Committee: 4/9/09
• Voted on by Senate: 4/23/09
• Out of House Committee: 5/11/09
• Voted on by House: 5/26/09
• Governor Action: 6/19/09
• Enrolled: 5/27/09
• Passed: 6/19/09

Caption

Relating to the franchise arrangements excluded from the Business Opportunity Act.

Impact

The bill's modifications could significantly impact how business transactions are categorized under Texas law. By establishing clearer criteria for what constitutes a 'business opportunity,' SB1701 may lessen the regulatory burden for certain businesses undergoing ownership changes. This could encourage more fluid transfer of business ownership and potentially stimulate economic activity in the state, as owners may feel more confident in engaging in transactions knowing they are exempt from specific regulatory requirements under the Business Opportunity Act.

Summary

SB1701 aims to amend the Texas Business & Commerce Code by specifying which franchise arrangements are excluded from the definition of 'business opportunity'. The bill seeks to clarify and streamline existing regulations by outlining specific transactions that do not fall under the purview of the Business Opportunity Act. Notably, it identifies sales or leases of established businesses that have actively conducted operations prior to the transaction as exempt, thereby addressing concerns regarding isolated transactions of ownership change or liquidation of businesses.

Contention

During discussions surrounding SB1701, key points of contention may arise from differing interpretations of what constitutes an 'ongoing business' versus a 'business opportunity'. Some stakeholders might argue that these definitions could be manipulated to evade effective regulation, thereby protecting consumers. Others may assert that these amendments are necessary for fostering a business-friendly environment that encourages entrepreneurship. The balance between protecting consumers and encouraging business growth will likely be a focal point in the legislative discussions.