By Dutton H.B. No. 2563
74R7986 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to initiatives for small businesses and rights and
1-3 remedies under The Securities Act.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 33, The Securities Act (Article 581-33,
1-6 Vernon's Texas Civil Statutes), is amended by adding Subsection N
1-7 to read as follows:
1-8 N. Limitation of Liability of Certain Parties.
1-9 (1) Definitions. For purposes of this Section 33.N,
1-10 the following terms shall, unless the context otherwise indicates,
1-11 have the following respective meanings:
1-12 a. The term "Small Business Issuer" shall mean
1-13 an issuer of securities that, at the time of the offering in
1-14 question, (1) has annual gross revenues not in excess of
1-15 $25,000,000 and (2) does not have a class of equity securities
1-16 registered, or required to be registered, with the U.S. Securities
1-17 and Exchange Commission under Section 12 of the Securities
1-18 Exchange Act of 1934, as amended.
1-19 b. The term "Covered Person" shall mean an
1-20 attorney (or the attorney's firm (if any)), or an accountant (or
1-21 the accountant's firm (if any)) or a consultant or similar person,
1-22 who has been engaged to provides services to a Small Business
1-23 Issuer, or to a seller of securities of a Small Business Issuer, in
1-24 connection with a Covered Transaction.
2-1 c. The term "Covered Transaction" shall mean an
2-2 offering of securities by a Small Business Issuer, or by a seller
2-3 of securities of a Small Business Issuer, in an aggregate amount
2-4 not in excess of $5,000,000 which is registered under Section 7 of
2-5 this Act or exempt from registration under Section 5 of this Act or
2-6 any rule promulgated under Section 5.T of this Act.
2-7 (2) Limitation of Liability of Covered Persons.
2-8 a. General Rule. Notwithstanding any other
2-9 provision of this section to the contrary (other than Section
2-10 33.N(2)b), in any action or series of actions relating to a Covered
2-11 Transaction under this section where liability against a Covered
2-12 Person has already been established in connection with such Covered
2-13 Transaction, the maximum amount that may be recovered against any
2-14 such liable Covered Person in all actions relating to such Covered
2-15 Transaction shall not exceed, in the aggregate, the amount that is
2-16 three times the fee (exclusive of reimbursed expenses) paid by the
2-17 issuer or other seller to the Covered Person with respect to such
2-18 Covered Transaction.
2-19 b. Limitation of Liability Not Available. The
2-20 limitation of liability provided by Section 33.N(2)a shall not be
2-21 available if the Covered Person shall be found in such action by
2-22 the trier of fact to have engaged in intentional wrongdoing in
2-23 providing services in connection with the Covered Transaction.
2-24 SECTION 2. Section 1 of this Act applies only to lawsuits
2-25 filed on or after the effective date of this Act. Lawsuits filed
2-26 before the effective date of this Act are governed by the law in
2-27 effect when the suit was filed, and the former law is continued in
3-1 effect for this purpose.
3-2 SECTION 3. The importance of this legislation and the
3-3 crowded condition of the calendars in both houses create an
3-4 emergency and an imperative public necessity that the
3-5 constitutional rule requiring bills to be read on three several
3-6 days in each house be suspended, and this rule is hereby suspended,
3-7 and that this Act take effect and be in force from and after its
3-8 passage, and it is so enacted.