SRC-DBM C.S.S.B. 776 76(R)    BILL ANALYSIS


Senate Research CenterC.S.S.B. 776
76R12255 DAK-DBy: Bivins
Economic Development
4/21/1999
Committee Report (Substituted)


DIGEST 

Currently, the pre-judgment interest rate is based on the interest rates of
treasury bills at the time of the judgment; however, the law states that
the pre-judgment interest rate cannot be less than 10 percent or more than
20 percent.  Treasury bills have not reached a rate of 10 percent in over
10 years. C.S.S.B. 776 would prohibit a court from awarding prejudgment
interest on future damages and defines the judgment interest rate. 

PURPOSE

As proposed, C.S.S.B. 776 prohibits a court from awarding pre-judgment
interest on future damages and defines the judgment interest rate. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.   Amends Section 304.003(c), Finance Code, to describe the
judgment interest rate as the sum of the auction rate quoted on a discount
basis for 52-week treasury bills issued by the United States government as
most recently published by the Federal Reserve Board before the date of the
computation; and two percentage points.  Deletes text regarding certain
interest rates.  Makes conforming changes. 

SECTION 2.  Amends Chapter 304B, Finance Code, by adding Section 304.109,
as follows: 

Sec. 304.109.  PREJUDGMENT INTEREST ON FUTURE DAMAGES PROHIBITED. Prohibits
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, 1999, relating to nonsubstantive
additions and corrections in enacted codes. 

SECTION 5.Emergency clause.
  Effective date: upon passage.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 304.003(c), Finance Code, to describe the judgment interest
rate as the sum of the auction rate quoted on a discount basis for 52-week
treasury bills issued by the United States government as most recently
published by the Federal Reserve Board before the date of the computation;
and two percentage points.