HBA-ATS S.B. 776 76(R)BILL ANALYSIS Office of House Bill AnalysisS.B. 776 By: Bivins Civil Practices 5/20/1999 Committee Report (Amended) BACKGROUND AND PURPOSE In 1985, the Texas Supreme Court adopted a rule allowing recovery of prejudgement interest on personal injury, wrongful death, or survival actions. In 1987, the 70th Texas Legislature amended the Finance Code to broaden the statute on judgment interest, establishing a floor and ceiling for interest rates, shortening the period of interest accrual, and changing the rate from compounded daily interest to simple interest. In 1994, the Supreme Court ruled that the law provided for prejudgment interest on future damages. S.B. 776 eliminates alternate minimum and maximum rates for prejudgment interest and establishes the rate as the sum of the 52-week U.S. treasury bill rate and two percentage points. This bill also prohibits a court from awarding prejudgment interest on future damages. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 304.003(c), Finance Code, to establish the rate for prejudgment interest as the sum of the 52-week U.S. treasury bill rate and two percentage points, by eliminating the alternate minimum and maximum rates on judgment interest. SECTION 2. Amends Subchapter B, Chapter 304, Finance Code, by adding Section 304.109, to prohibit a court from awarding prejudgment interest on future damages. SECTION 3. Makes application of this Act prospective. SECTION 4. Provides that, to the extent of any conflict, this Act prevails over another Act of the 76th Legislature, Regular Session, 1999, relating to nonsubstantive additions and corrections in enacted codes. SECTION 5. Emergency clause. Effective date: upon passage. EXPLANATION OF AMENDMENTS Amendment No. 1: Amends S.B. 776 by deleting SECTION 1, which amends Section 304.003(c), Finance Code, providing for the establishment of the rate for prejudgment interest as the sum of the 52-week U.S. treasury bill rate and two percentage points, by eliminating the alternate minimum and maximum rates on judgment interest. Amends S.B. 776 by redesignating SECTIONS 2-5 of the original to SECTIONS 1-4, respectively.