By Dutton                                             H.B. No. 1507

         75R6243 BEM-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to limiting the liability of certain persons involved in

 1-3     an issuance of securities by a small business.

 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 in Small Business Issuances.

 1-9     (1)  For purposes of this subsection, unless the context otherwise

1-10     requires, "small business issuer" means an issuer of securities

1-11     that, at the time of an offer to which this subsection applies:

1-12                 (a)  has annual gross revenues in an amount that does

1-13     not exceed $25 million; and

1-14                 (b)  does not have a class of equity securities

1-15     registered, or required to be registered, with the Securities and

1-16     Exchange Commission under Section 12 of the Securities Exchange Act

1-17     of 1934, as amended (15 U.S.C. Section 78l).

1-18           (2)  This subsection applies only to:

1-19                 (a)  an offer of securities made by a small business

1-20     issuer or by the seller of securities of a small business issuer

1-21     that is in an aggregate amount that does not exceed $5 million; and

1-22                 (b)  a person who has been engaged to provide services

1-23     relating to an offer of securities described by Paragraph (a) of

1-24     this subdivision, including an attorney, an accountant, a

 2-1     consultant, or the firm of the attorney, accountant, or consultant.

 2-2           (3)  The maximum amount that may be recovered against a

 2-3     person to which this subsection applies in all actions relating to

 2-4     an offer of securities to which this subsection applies is an

 2-5     amount equal to three times the fee paid by the issuer or other

 2-6     seller to the person for the services related to the offer of

 2-7     securities, unless the trier of fact in an action described by this

 2-8     subdivision finds the person engaged in intentional wrongdoing in

 2-9     providing the services.

2-10           SECTION 2.  This Act applies only to an action filed on or

2-11     after the effective date of this Act.  An action filed before the

2-12     effective date of this Act is governed by the law in effect at the

2-13     time the action  was filed, and that law is continued in effect for

2-14     that purpose.

2-15           SECTION 3.  The importance of this legislation and the

2-16     crowded condition of the calendars in both houses create an

2-17     emergency and an imperative public necessity that the

2-18     constitutional rule requiring bills to be read on three several

2-19     days in each house be suspended, and this rule is hereby suspended,

2-20     and that this Act take effect and be in force from and after its

2-21     passage, and it is so enacted.

2-22                          COMMITTEE AMENDMENT NO. 1

2-23           Please Amend H.B. 1507 as follows:

2-24           On page 1, lines 9, 11 and 18 and on page 2, lines 3 and 4,

2-25     replace the word "subsection" with "Section 33N"

2-26           On page 1, lines 23-24, replace "Paragraph (a) of this

2-27     subdivision" with "Section 33N(2)(a)"

 3-1           On page 2, line 3, replace "all actions" with "any action or

 3-2     series of actions under Section 33"

 3-3           On page 2, lines 7-8, delete "in an action described by this

 3-4     subdivision"

 3-5                                                                 Goodman