By Solis                                              H.B. No. 2329
         77R8412 ESH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the use of local counsel in connection with public
 1-3     securities issued by a governmental entity.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 1201.027, Government Code, is amended to
 1-6     read as follows:
 1-7           Sec. 1201.027.  AUTHORITY OF ISSUER TO CONTRACT FOR SERVICES.
 1-8     (a)  Except as otherwise provided by this section, an [An] issuer
 1-9     has exclusive authority to select, contract with, and determine the
1-10     basis for compensation of a person to provide legal and other
1-11     services as may be determined by the issuer to be necessary in
1-12     connection with the issuer's issuance of public securities or
1-13     administration of its affairs that pertain to the issuance of
1-14     public securities.  The selection of legal counsel shall be made in
1-15     accordance with the provisions of Subchapter A, Chapter 2254,
1-16     applicable to the selection by a governmental entity of a provider
1-17     of professional engineering services.
1-18           (b)  For legal services needed in connection with public
1-19     securities after the public securities have been issued, an issuer
1-20     shall select legal counsel located in the area in which the issuer
1-21     is located.
1-22           (c)  Subsections [Subsection] (a)  and (b) do [does] not
1-23     impair the authority of the attorney general under Section 402.0212
1-24     to approve a contract for legal services entered into by a state
 2-1     agency.
 2-2           (d) [(c)]  Except as provided by Subsection (c) [(b)], to the
 2-3     extent of a conflict between this section and another law or a
 2-4     municipal charter, this section controls.
 2-5           SECTION 2. Section 1201.027, Government Code, as amended by
 2-6     this Act, applies only to a contract for legal services in
 2-7     connection with public securities that is entered into on or after
 2-8     September 1, 2001.  A contract for legal services in connection
 2-9     with public securities that is entered into before September 1,
2-10     2001, is governed by the law in effect on the date the contract was
2-11     entered into, and the former law is continued in effect for that
2-12     purpose.
2-13           SECTION 3. This Act takes effect September 1, 2001.