HBA-JEK S.B. 988 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 988 By: Duncan Financial Institutions 5/5/2001 Engrossed BACKGROUND AND PURPOSE Under current law, a purchaser may sell public securities publicly or privately, but the amount of securities being sold may not exceed a limit specified by law or determined by the voters. The attorney general recently determined that an underwriter's compensation is not counted against a public sale but is counted against a private sale. This decision has created an economic disequity between the two methods of sale. Senate Bill 988 provides that the commission of an initial purchaser of public securities is not counted against either the public or private sale of such securities for the purpose of determining whether the amount of securities sold exceeds the authorized limit. 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 988 amends the Government Code to provide that the commission on public securities, with a principal amount limited by law or voter authorization that are resold by the initial purchaser and constitute all or part of the initial purchaser's compensation, are not regarded as proceeds of the issuer that are calculated to determine whether the principal amount of public securities being sold exceeds the legal limit. EFFECTIVE DATE September 1, 2001.