BILL ANALYSIS

H.B. 4395

By: Turner

Pensions, Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The bill author has informed the committee that as a result of the COVID-19 pandemic, issuers of public securities and the public finance division in the Office of the Attorney General (OAG) have adopted digital transmissions for the approval of public securities, which has made the review of transactions by issuers and the OAG more efficient and cost-effective, as voluminous legal proceedings no longer require printing, costly shipping, and additional back-and-forth paper transmittals to obtain approval for public securities. However, as the bill author has further informed the committee, current law does not allow the division to approve a public security with an electronic signature from software like Adobe Acrobat or DocuSign. H.B. 4395 seeks to further modernize Texas' governmental processes and eliminate regulations and fees that increase costs and create delays by providing for the electronic submission and delivery of public securities and related correspondence or supplemental information.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

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

H.B. 4395 amends the Government Code to require an issuer of public securities to submit to the attorney general the following documents, including any related correspondence or supplemental information, in an electronic format and accompanied by an electronic signature, if applicable:

·a public security, record of proceedings, or credit agreement required to be submitted to the attorney general for approval under state law; and

·an amendment to a public security, record of proceedings, or credit agreement approved or registered under statutory provisions relating to the examination and registration of public securities.

The bill requires the attorney general to deliver such an amendment to a public security, record of proceedings, or credit agreement to the comptroller of public accounts in an electronic format and accompanied by an electronic signature, if applicable. The bill defines "electronic" and "electronic signature" by reference to the meanings assigned to those terms by the Uniform Electronic Transactions Act and includes in the definition of "electronic signature" any electronic signing method recognized by law.

H.B. 4395 requires the attorney general, not later than December 1, 2025, in accordance with applicable state law, to advise the proper legal authorities in regard to the issuance of bonds that by law require the attorney general's approval that the bill's provisions require electronic submission of public securities and to advise those persons of any other procedural changes to the submission and registration requirements of public securities that the attorney general deems necessary to efficiently receive electronic submissions of public securities after the bill's effective date. The bill applies only to a public security, record of proceedings, or credit agreement submitted to the attorney general on or after the bill's effective date. A public security, record of proceedings, or credit agreement submitted before the bill's effective date is governed by the law in effect on the date the security, record, or agreement was submitted, and the former law is continued in effect for that purpose.

EFFECTIVE DATE

January 1, 2026.