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.