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Senate Bill 638 |
Senate Author: Nichols et al. |
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Effective: 9-1-09 |
House Sponsor: Flynn et al. |
Senate Bill 638 amends the Government Code to require the comptroller of public accounts by rule to establish a program for centralized pooled collateralization of deposits of public funds and for monitoring collateral maintained by participating financial institutions. The bill requires the rules to provide that deposits of county funds are not eligible for collateralization under the program; requires the comptroller to provide a separate collateral pool for any single institution's deposits of public funds; and prohibits any combination, cross-collateralization, or aggregation of one institution's collateral pledged for public deposit with another institution's collateral pool for pledging purposes.
Senate Bill 638 sets forth eligibility requirements for a financial institution's participation in the pooled collateral program and requires each participating institution to secure its deposits of public funds with eligible securities having a specified minimum total value and to provide for the collateral securities to be held by a regulated and qualified custodian trustee, on the institution's behalf, in trust for the benefit of the pooled collateral program.
Senate Bill 638 provides for the monitoring of collateral in the program by requiring each participating institution to file daily, weekly, monthly, and annual electronic reports with the comptroller, requiring the comptroller to provide a daily report of the market value of the securities held in each pool, and requiring the comptroller to post each report on the comptroller's website.
Senate Bill 638 requires the comptroller to impose an annual assessment against each participating institution in an amount sufficient to pay the program's administrative costs. The bill authorizes the comptroller to impose an administrative penalty against an institution that fails to file a timely report for the purposes of monitoring collateral, fails to maintain collateral in an amount and in the manner provided, or fails to pay an assessment against it in the time provided, and it requires the comptroller by rule to adopt a formula, based on certain factors, for determining the amount of a penalty, provided that for each violation and for each day of a continuing violation, a penalty is at least $100 per day and not more than $1,000 per day. The bill establishes that a proceeding to impose a penalty is a contested case under the Administrative Procedure Act, and it authorizes the attorney general to sue to collect a penalty.
Senate Bill 638 authorizes a stay of enforcement of a penalty during the time the order is under judicial review if the participating institution pays the penalty to the clerk of the court or files a supersedeas bond with the court in the amount of the penalty or if a participating institution that cannot afford to pay the penalty or file the bond files an affidavit in the manner required by the Texas Rules of Civil Procedure. The bill specifies that money collected as penalties may be appropriated only for administration of the pooled collateral program.
Senate Bill 638 requires the comptroller to adopt rules as necessary to implement the pooled collateral program so that the program begins operating not later than the first business day of April 2010.