S.B. 876 78(R)    BILL ANALYSIS


S.B. 876
By: Duncan
Financial Institutions
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

The 76th Legislature permitted the voter-authorized debt issued by school
districts and college districts to be sold at either a competitive or
negotiated sale.  This was intended to allow flexibility in structuring
debts.  However, the attorney general has interpreted current law to mean
that commissions paid on negotiated sales must be paid from the
voter-authorized debt amount, but this does not apply to competitive
sales. 

S.B. 876 clarifies that commissions on certain negotiated sales may be
paid from funds above the voter-authorized amount. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

S.B. 876 provides that the commissions paid on the sale of certain
securities do not count as principal for purposes of determining whether
the principal amount of the securities exceeds the voter-authorized
limitation. 

The bill applies to bonds issued on or after the effective date of the
Act, even if the bonds were approved by the voters before the effective
date. 

EFFECTIVE DATE

September 1, 2003