SRC-JEC H.B. 1840 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 1840
78R11089 CLG-FBy: Solomons (Janek)
Business & Commerce
5/21/2003
Engrossed


This analysis utilizes the House Committee Report, which is the most
recent version available to the Senate Research Center, and is not
formatted to the style of the Senate Research Center.  There were no
amendments to H.B. 1840 on the House floor. 

BACKGROUND AND PURPOSE

The State Securities Board (Board) was created in 1957 under the
Securities Act passed by the 55th Texas Legislature. The mission of the
Board is to protect Texas investors. Consistent with that purpose, the
Agency seeks to ensure a free and competitive securities market for Texas,
increase investor confidence, and encourage the formation of capital and
the creation of new jobs in Texas. 

The Board is funded through a direct appropriation from the General
Revenue Fund, unlike similar state agencies which regulate financial
institutions and are funded through fees. The Board's current
appropriation is not sufficient to provide adequate protection of Texans'
investments.  

H.B. 1840 changes the Board's funding mechanism. Instead of being funded
from general revenue, the Board would fund itself directly from the fees
that it collects. The bill designates five of the Board's current fees to
fund the agency. It would only collect what fees are necessary for the
administration and enforcement of its statutory duties. 

RULEMAKING AUTHORITY

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

ANALYSIS

SECTION 1.  Amends Section 35, The Securities Act (Article 581-35, VTCS),
by changing the funding mechanism of the State Securities Board to allow
the Board to set an aggregate amount above the five fees as they existed
on September 1 2002,  to generate sufficient revenue to cover the costs of
administering and enforcing the Securities Act. The five fees would
include the filings for: 

 _ an application, renewal or amendment to sell or dispose  of securities;
 _ an application of a dealer or investment adviser;
 _ a renewal application of a dealer or investment advisor;
 _ an application for each agent, officer, or investment advisor
representative; and 
 _ a renewal application for each agent, officer, or investment advisor
representative. 

While the Board would be required to set only reasonable and necessary
fees, each of the five fees would be capped at $100. 

SECTION 2.  Amends Section 35-1, The Securities Act (Article 581-35-1,
VTCS), by correcting references to certain Subsections changed in Section
1. 

SECTION 3.  Amends Section 35-2, The Securities Act (Article 581-35-2,
VTCS), by correcting  references to certain Subsections changed in Section
1. 

SECTION 4.  States the fee becomes in effect on or after the effective
date as stipulated. 

SECTION 5.  Effective date.


EFFECTIVE DATE

This Act takes effect immediately if it receives a vote of two-thirds of
all members elected to each House.  If it does not receive the votes
necessary for immediate effect, it will take effect on September 1, 2003.