H.B. No. 696
1-1 AN ACT
1-2 relating to depositories and investment securities for local
1-3 governments.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 105, Local Government Code, is amended to
1-6 read as follows:
1-7 CHAPTER 105. DEPOSITORIES FOR MUNICIPAL FUNDS
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Sec. 105.001. Definitions. In this chapter:
1-10 (1) "Bank" means a state bank or a national bank
1-11 domiciled in this state <banking corporation or association or an
1-12 individual banker>.
1-13 (2) "Credit union" means a state credit union or
1-14 federal credit union domiciled in this state.
1-15 (3) <(2)> "Demand deposit" means a deposit of funds
1-16 that may be withdrawn on the demand of the depositor.
1-17 (4) <(3)> "Depository" means the bank, credit union,
1-18 or savings association selected by the municipality to provide
1-19 depository services.
1-20 (5) "Time deposit" means a deposit of funds subject to
1-21 a contract between the depositor and the depository under which the
1-22 depositor may not withdraw any of the funds by check or by another
1-23 manner until the expiration of a certain period following written
2-1 notice of the depositor's intent to withdraw the funds.
2-2 (6) <(4)> "Depository services" means the receipt and
2-3 disbursement of funds by a depository in accordance with the terms
2-4 of a depository services contract <"Secretary of a municipality"
2-5 includes the clerk of a municipality>.
2-6 (7) "Depository services contract" means a contract
2-7 executed by a municipality and a depository containing terms and
2-8 conditions relating to the depository services to be provided by
2-9 the depository.
2-10 (8) "Designated officer" means the treasurer of a
2-11 municipality or other officer of the municipality so designated by
2-12 the governing body of a municipality.
2-13 (9) "Federal credit union" means a credit union
2-14 organized under the Federal Credit Union Act (12 U.S.C. Section
2-15 1751 et seq.).
2-16 (10) "Federal savings association" means a savings and
2-17 loan association or a savings bank organized under federal law.
2-18 (11) "National bank" means a banking corporation
2-19 organized under the provisions of 12 U.S.C. Section 21.
2-20 (12) "Savings association" means a state savings
2-21 association or a federal savings association domiciled in this
2-22 state.
2-23 (13) "State bank" has the meaning assigned by The
2-24 Texas Banking Code (Article 342-101 et seq., Vernon's Texas Civil
2-25 Statutes).
3-1 (14) "State credit union" means a credit union
3-2 organized under the Texas Credit Union Act (Article 2461-1.01 et
3-3 seq., Vernon's Texas Civil Statutes).
3-4 (15) "State savings association" means any savings and
3-5 loan association or savings bank organized under the laws of this
3-6 state.
3-7 Sec. 105.002. Funds Affected. This chapter applies to the
3-8 funds, including school funds, of any municipality or any
3-9 department or agency of the municipality<, including any school
3-10 funds of the municipality>.
3-11 (Sections 105.003-105.010 reserved for expansion)
3-12 SUBCHAPTER B. ESTABLISHMENT OF DEPOSITORY
3-13 Sec. 105.011. Depository Authorized. (a) Before awarding a
3-14 depository services contract to a depository, the governing body of
3-15 a municipality shall receive applications for the performance of
3-16 depository services from one or more banks, credit unions, or
3-17 savings associations <At a meeting held at any time, the governing
3-18 body of a municipality may receive applications from one or more
3-19 banks for the deposit of the municipality's funds>.
3-20 (b) The governing body may consider the application of a
3-21 bank, credit union, or savings association that is not doing
3-22 business within the municipality if:
3-23 (1) the bank, credit union, or savings association
3-24 maintains a place of business within the state and offers within
3-25 the state the services required by the depository services
4-1 contract; and
4-2 (2) the governing body, prior to giving the notice
4-3 required by Section 105.012, has adopted a written policy expressly
4-4 permitting the consideration of applications received by the
4-5 municipality from a bank, credit union, or savings association that
4-6 is not doing business within the municipality, after taking into
4-7 consideration what is in the best interest of the municipality in
4-8 establishing a depository.
4-9 (c) The designated officer shall request, receive, and
4-10 review applications for the performance of depository services.
4-11 The designated officer shall present the specifications of each
4-12 application to the governing body who will then select a depository
4-13 <If two or more banks are doing business within a municipality, the
4-14 governing body may consider the applications of only those banks.
4-15 However, a general-law municipality with a population of more than
4-16 20,000 may consider applications from any bank located in the
4-17 county in which the municipality is located or in an adjacent
4-18 county>.
4-19 Sec. 105.012. Notice. (a) The designated officer shall
4-20 give notice to banks, credit unions, and savings associations
4-21 requesting the submission of applications for the performance of
4-22 depository services.
4-23 (b) The notice must contain:
4-24 (1) the name and address of the designated officer
4-25 receiving the applications;
5-1 (2) the date and time the applications are to be
5-2 received by the designated officer; and
5-3 (3) the date, time, and place the governing body of
5-4 the municipality will consider the selection of one or more
5-5 depositories.
5-6 (c) Notice of the request shall be published at least once
5-7 no later than 21 days prior to the deadline for receipt of
5-8 applications for depository services contracts (i) in a newspaper
5-9 of general circulation in the municipality and (ii) in a financial
5-10 publication of general circulation published within this state;
5-11 provided, that the notice required by clause (ii) shall not be
5-12 required if the governing body has not adopted the written policy
5-13 described in Section 105.011 <Not earlier than four weeks or later
5-14 than one week before the date of the meeting, the secretary of the
5-15 municipality shall publish at least once in a newspaper published
5-16 in the municipality a notice of the meeting at which applications
5-17 are to be received>.
5-18 Sec. 105.013. Application. The designated officer may not
5-19 consider an application if it is received after the date specified
5-20 in the notice for receiving applications by the designated
5-21 officer <A bank desiring to be selected as a municipal depository
5-22 must deliver its application to the secretary of the municipality
5-23 on or before the date of the meeting at which applications are to
5-24 be received>.
5-25 Sec. 105.014. REVIEW OF APPLICATIONS. In reviewing the
6-1 applications, the designated officer shall consider the terms and
6-2 conditions for the performance of depository services, including
6-3 the type and cost of services to be provided to the municipality,
6-4 consistent with any policy guidelines adopted by the governing body
6-5 regarding the selection of one or more depositories.
6-6 Sec. 105.015. Selection of Depository. (a) The governing
6-7 body of a municipality may authorize the designated officer to
6-8 execute on the municipality's behalf one or more depository
6-9 services contracts <After considering the applications, the
6-10 governing body of the municipality shall select as municipal
6-11 depositories one or more banks that offer the most favorable terms
6-12 and conditions for the handling of the municipal funds>.
6-13 (b) The governing body may reject any of the applications
6-14 and readvertise if all <for> applications are rejected.
6-15 (c) The conflict of interests provisions of <Chapter 179,
6-16 Acts of the 60th Legislature, Regular Session, 1967 (>Article
6-17 2529c, Vernon's Texas Civil Statutes<),> apply to the selection of
6-18 the depositories.
6-19 Sec. 105.016 <105.015>. Designation of Depository. (a) The
6-20 <When security is provided in accordance with Subchapter C and is
6-21 approved by the governing body of the municipality, the> governing
6-22 body shall designate, by an order recorded in its minutes, the
6-23 bank, credit union, or savings association to serve as a depository
6-24 for the municipality's funds.
6-25 (b) If a bank, credit union, or savings association selected
7-1 as a municipal depository does not provide security by the deadline
7-2 prescribed by Section 105.031, the selection of the bank, credit
7-3 union, or savings association <of the bank> as a depository is
7-4 void, and the governing body may consider the application it deems
7-5 to be the next most advantageous depository services application
7-6 <shall publish notice, receive applications, and select another
7-7 depository in the regular manner>.
7-8 Sec. 105.017. Term of Depository Contract. A municipality
7-9 may approve, execute, and deliver any depository services contract
7-10 whose term does not exceed five years. The depository services
7-11 contract may only contain terms and conditions approved by the
7-12 governing body of the municipality.
7-13 Sec. 105.018. Additional Services. In addition to
7-14 depository services, a municipality may contract with financial
7-15 institutions, including banks, credit unions, and savings
7-16 associations, for additional financial services under a separate
7-17 contract if the governing body of the municipality determines that
7-18 additional financial services are necessary in the administration,
7-19 collection, investment, and transfer of municipal funds.
7-20 (Sections 105.019 <105.016>-105.030 reserved for expansion)
7-21 SUBCHAPTER C. SECURITY FOR FUNDS HELD BY DEPOSITORY
7-22 Sec. 105.031. Qualification as Depository. (a) The bank or
7-23 savings association, to qualify as a municipal depository, must,
7-24 not later than five days before the commencement of the term of the
7-25 depository services contract, provide security for the municipal
8-1 funds to be deposited in accordance with the terms of the
8-2 depository services contract <Within five days after the date a
8-3 bank is selected as a municipal depository, the bank must qualify
8-4 as a depository by providing security for the municipal funds to be
8-5 deposited with the bank>.
8-6 (b) The Public Funds Collateral Act (Article 2529d, Vernon's
8-7 Texas Civil Statutes) governs the type, level, substitution,
8-8 possession, release, and method of valuation of the security
8-9 necessary to secure the deposit of municipal funds.
8-10 (c) The bank, credit union, or savings association may use
8-11 personal bonds, surety bonds, or any combination to secure
8-12 municipal funds only if each personal bond and surety bond is
8-13 specifically approved by the governing body of the municipality or
8-14 its designated officer <The bank may secure the municipal funds, at
8-15 the option of the governing body of the municipality, by:>
8-16 <(1) personal bond; surety bond; bonds, notes, or
8-17 other securities; or a combination of these methods, as provided by
8-18 this subchapter; or>
8-19 <(2) investment securities or interests in them as
8-20 provided by Chapter 726, Acts of the 67th Legislature, Regular
8-21 Session, 1981 (Article 2529b-1, Vernon's Texas Civil Statutes)>.
8-22 Sec. 105.032. Personal Bond. (a) One or more personal
8-23 bonds executed and filed with the governing body of the
8-24 municipality or its designated officer, payable to the
8-25 municipality, qualify as security under this subchapter if:
9-1 (1) the bonds are signed by at least five solvent
9-2 sureties who:
9-3 (A) own unencumbered real property in the state
9-4 that has a value at least equal to the amount of the bonds and that
9-5 is not exempt from execution under the constitution and other laws
9-6 of this state; or
9-7 (B) have an aggregate net worth at least equal
9-8 to the amount of the bonds; and
9-9 (2) the bonds are approved by the governing body or
9-10 its designated officer.
9-11 (b) When a bond is filed for approval under Subsection
9-12 (a)(1)(A), the sureties shall also file with the governing body a
9-13 statement containing:
9-14 (1) a description of the unencumbered and nonexempt
9-15 real property sufficient to identify the secured property <it on
9-16 the ground>; and
9-17 (2) a fair estimate of the value of each tract of real
9-18 property listed, including the value of any improvements on the
9-19 property.
9-20 (c) When a bond is filed for approval under Subsection
9-21 (a)(1)(B), the sureties shall also file with the governing body or
9-22 designated officer of the municipality an itemized and verified
9-23 financial statement showing that the aggregate net worth of the
9-24 sureties is at least equal to the amount of the bonds.
9-25 (d) After the governing body approves a personal bond, it
10-1 shall be filed with the secretary and the designated officer of the
10-2 municipality. The statement required by Subsection (c) shall be
10-3 attached to the bond.
10-4 Sec. 105.033. Surety Bond. (a) One or more bonds issued
10-5 and executed by one or more solvent surety companies authorized to
10-6 do business in this state, payable to the municipality and filed
10-7 with the secretary and the designated officer <governing body> of
10-8 the municipality, qualify as security under this subchapter if the
10-9 bonds are approved by the governing body.
10-10 (b) After the governing body approves a surety bond, it
10-11 shall be filed with the secretary and the designated officer of the
10-12 municipality.
10-13 Sec. 105.034. Conditions to Acting as Depository <BONDS,
10-14 NOTES, AND OTHER SECURITIES>. (a) The depository shall:
10-15 (1) keep the municipal funds covered by the depository
10-16 services contract;
10-17 (2) perform all duties and obligations imposed on the
10-18 depository by law and under the depository services contract;
10-19 (3) pay on presentation all checks drawn and properly
10-20 payable on a demand deposit account with the depository;
10-21 (4) pay all transfers properly payable as directed by
10-22 a designated officer;
10-23 (5) provide and maintain security at the level
10-24 required by the provisions of the Public Funds Collateral Act
10-25 (Article 2529d, Vernon's Texas Civil Statutes); and
11-1 (6) account for the municipal funds as required by
11-2 law.
11-3 (b) Any suit brought in connection with a depository
11-4 services contract must be tried in the county in which the city
11-5 hall of the municipality is located. <If approved by the governing
11-6 body as to kind and value, a municipal depository may pledge with
11-7 the governing body of the municipality as security under this
11-8 subchapter:>
11-9 <(1) a bond, certificate of indebtedness, or treasury
11-10 note of the United States, or other evidence of indebtedness of the
11-11 United States that is guaranteed as to principal and interest by
11-12 the United States;>
11-13 <(2) a bond of this state or of a county,
11-14 municipality, independent school district, common school district,
11-15 or other school district in this state;>
11-16 <(3) a bond issued under the federal farm loan acts;>
11-17 <(4) a road district bond;>
11-18 <(5) a bond, pledge, or other evidence of indebtedness
11-19 issued by the board of regents of The University of Texas System;>
11-20 <(6) a note or bond secured by mortgages insured and
11-21 debentures issued by the Federal Housing Administration;>
11-22 <(7) shares or share accounts of a savings and loan
11-23 association organized under the laws of this state or of a federal
11-24 savings and loan association domiciled in this state if the payment
11-25 of the share or share accounts is insured by the Federal Savings
12-1 and Loan Insurance Corporation;>
12-2 <(8) bank acceptances of banks that have a capital
12-3 stock of at least $500,000; or>
12-4 <(9) a bond issued by a municipal corporation in this
12-5 state.>
12-6 <Sec. 105.035. ><CONDITION OF PERSONAL BOND OR CONTRACT FOR
12-7 SECURITIES><. (a) A personal bond or surety bond provided, or a
12-8 contract for the pledge of securities under this subchapter, must
12-9 be conditioned that the depository will:>
12-10 <(1) faithfully keep the municipal funds and
12-11 faithfully perform the duties and obligations imposed by law on the
12-12 depository;>
12-13 <(2) pay on presentation all checks drawn on a demand
12-14 deposit account with the depository;>
12-15 <(3) pay all checks drawn on a time deposit account on
12-16 presentation by the treasurer of the municipality after the
12-17 required period of notice; and>
12-18 <(4) account for the municipal funds as required by
12-19 law.>
12-20 <(b) A suit on a personal bond, surety bond, or contract for
12-21 securities provided or pledged under this subchapter must be tried
12-22 in the county in which the municipality is located.>
12-23 <Sec. 105.036. ><Amount of Security Required><. (a) Personal
12-24 or surety bonds that secure municipal funds in a depository must be
12-25 in an amount at least equal to the total amount of the revenue of
13-1 the municipality for the year preceding the year for which the
13-2 bonds are made.>
13-3 <(b) Securities pledged to secure municipal funds on deposit
13-4 in a depository must be in an amount equal to the amount of those
13-5 funds. The value of the securities is determined by the governing
13-6 body of the municipality, and that determination is final and is
13-7 binding on the depository.>
13-8 <Sec. 105.037. ><Security Not Required For Federally Insured
13-9 Deposits><. A depository is not required to provide security for the
13-10 deposit of municipal funds to the extent the deposits are insured
13-11 under 12 U.S.C.A. Sections 1811-1832.>
13-12 (Sections 105.035 <105.038>-105.050 reserved for expansion)
13-13 SUBCHAPTER D. MAINTENANCE AND MODIFICATION OF SECURITY
13-14 Sec. 105.051. Maintenance of <New> Security. (a) A
13-15 depository services contract shall contain terms and conditions
13-16 relating to the possession, substitution, or release of security,
13-17 including:
13-18 (1) requiring the depository to execute a new bond or
13-19 pledge additional securities for the deposit of municipal funds;
13-20 (2) substituting one security for another;
13-21 (3) releasing securities pledged by a depository in
13-22 excess of the amount required by this chapter;
13-23 (4) the time period in which such addition,
13-24 substitution, or release of security by a depository may occur; and
13-25 (5) other matters relating to the possession,
14-1 substitution, or release of security the municipality considers
14-2 necessary for its protection <The governing body of the
14-3 municipality may by written order require a depository to execute a
14-4 new bond or pledge additional or other securities at any time the
14-5 governing body considers it advisable or considers it necessary for
14-6 the protection of the municipality>.
14-7 (b) If a depository fails for any reason to comply with the
14-8 requirements governing the possession, substitution, or release of
14-9 security <file the required new bond or pledge the required
14-10 securities within five days after the date the depository is served
14-11 with a copy of the order>, the governing body may select a new
14-12 depository in the <regular> manner provided in this chapter.
14-13 Sec. 105.052. <Substitution of Securities><. (a) A
14-14 depository is entitled to substitute one type of security for
14-15 another if the substituting security meets the requirements of law
14-16 and is approved by the governing body of the municipality.>
14-17 <(b) The governing body may direct the manner in which
14-18 securities pledged in place of personal or surety bonds are to be
14-19 deposited.>
14-20 <Sec. 105.053. ><Release of Excess Security><. If the
14-21 securities pledged by a depository to secure municipal funds exceed
14-22 the amount required by this chapter, the governing body of the
14-23 municipality shall permit the release of the excess.>
14-24 <Sec. 105.054. ><Inadequate Security><. If for any reason the
14-25 municipal funds on deposit with a depository exceed the amount of
15-1 security pledged, the depository shall immediately pledge
15-2 additional securities with the governing body of the municipality.>
15-3 <Sec. 105.055.> Solvency of Personal Surety. (a) At least
15-4 twice each year while a personal bond securing municipal deposits
15-5 is in effect, the designated officer of the municipality <governing
15-6 body of the municipality> shall investigate the solvency of each
15-7 surety on the bond. The governing body of the municipality or its
15-8 designated officer <governing body> may require a surety to make an
15-9 itemized and verified financial statement accurately showing the
15-10 surety's financial position and, if the bond requires the surety to
15-11 own real property, identifying each tract of real property owned by
15-12 the surety and stating its value.
15-13 (b) The governing body of the municipality shall require a
15-14 depository to provide a new bond meeting the requirements of this
15-15 chapter if a financial statement provided under Subsection (a)
15-16 indicates that:
15-17 (1) a surety is insolvent;
15-18 (2) a surety's net worth is less than the amount
15-19 required by this chapter;
15-20 (3) the assets listed are depreciated or their value
15-21 is in any way impaired; or
15-22 (4) real property required by the bond has been
15-23 disposed of or encumbered and the value of the remaining
15-24 unencumbered and nonexempt real property is insufficient to meet
15-25 the requirements of this chapter.
16-1 Sec. 105.053 <105.056>. Solvency of Surety Company and
16-2 Adequacy of Securities. At any time the governing body of the
16-3 municipality considers it necessary for the protection of the
16-4 municipality, the governing body may direct the designated officer
16-5 to investigate the solvency of a surety company that issues a bond
16-6 on behalf of a municipal depository or investigate the value of
16-7 securities pledged by a depository to secure municipal funds.
16-8 Sec. 105.054 <105.057>. Surrender of Interest on Securities.
16-9 Except as provided for in the collateral policies of the
16-10 municipality adopted in accordance with the Public Funds Collateral
16-11 Act (Article 2529d, Vernon's Texas Civil Statutes), on <On> request
16-12 of a municipal depository, the <governing body of the> municipality
16-13 shall surrender, when due, interest coupons or other evidence of
16-14 interest on securities deposited by the depository with the
16-15 governing body if the securities remaining pledged by the
16-16 depository are adequate to meet the requirements of this chapter
16-17 and of the governing body.
16-18 (Sections 105.055 <105.058>-105.070 reserved for expansion)
16-19 SUBCHAPTER E. DEPOSITORY ACCOUNTS
16-20 Sec. 105.071. Character and Amount of Deposits. (a) The
16-21 governing body of the municipality may determine and designate in
16-22 the depository services contract the character and amount of
16-23 municipal funds that will be demand deposits. However, the
16-24 municipality has the right to maintain other investments of
16-25 municipal funds in accordance with the investment policy adopted by
17-1 the municipality <and that will be time deposits>.
17-2 (b) The designated officer <governing body> may contract
17-3 with a depository for interest on time deposits, including, without
17-4 limitation, certificates of deposit, at any legal rate under
17-5 federal or state law, <or under a> rule, or regulation <adopted by
17-6 the board of governors of the Federal Reserve System or by the
17-7 board of directors of the Federal Deposit Insurance Corporation>.
17-8 Sec. 105.072. Investments <in United States Securities>.
17-9 The provisions of Chapter 810, Acts of the 66th Legislature,
17-10 Regular Session, 1979 (Article 4413(34c), Vernon's Texas Civil
17-11 Statutes), and the Public Funds Investment Act of 1987 (Article
17-12 842a-2, Vernon's Texas Civil Statutes) shall govern the investment
17-13 of municipal funds <The governing body of the municipality may
17-14 direct the treasurer of the municipality to withdraw any municipal
17-15 funds deposited in a depository that are not immediately required
17-16 to pay obligations of the municipality and invest those funds in
17-17 direct debt securities of the United States unless such an
17-18 investment or withdrawal is expressly prohibited by law or the
17-19 withdrawal is contrary to the terms of the depository contract>.
17-20 Sec. 105.073. Deposit of Funds. Not later than 60 days from
17-21 the date <Immediately after> the governing body of the municipality
17-22 designates a <municipal> depository in accordance with the
17-23 provisions of Section 105.016, the designated officer of the
17-24 municipality <treasurer of the municipality> shall transfer to the
17-25 depository all the municipal funds covered by the depository
18-1 services contract under the <treasurer's> control of the designated
18-2 officer. The designated officer of the municipality <treasurer>
18-3 shall as soon as practicable also <immediately> deposit in the
18-4 depository to the credit of the municipality any money covered by
18-5 the depository services contract received after the depository is
18-6 designated.
18-7 Sec. 105.074. Payment of Funds <Drawing of Checks and
18-8 Warrants>. (a) The funds of the municipality may be paid out of a
18-9 depository only at <on> the direction of a designated officer
18-10 <checks of the treasurer of the municipality>.
18-11 (b) Except as provided in Subsection (g) <in a municipality
18-12 that operates under a municipal charter provision that provides for
18-13 the drawing of checks or warrants on the depository or municipal
18-14 funds in a manner different from that prescribed by this section>,
18-15 a designated officer <treasurer> may draw a check on a depository
18-16 only on a warrant signed by the mayor and attested by the secretary
18-17 of the municipality.
18-18 (c) If there is sufficient money in a fund in a depository
18-19 against which the proper authority has drawn a warrant, the
18-20 designated officer <treasurer> on presentation of the warrant shall
18-21 draw a check on the depository in favor of the legal holder of the
18-22 warrant, retain the warrant, and charge the warrant against the
18-23 fund on which it is drawn. The designated officer <treasurer> may
18-24 not draw a warrant on a fund in a depository unless the fund has
18-25 sufficient money to pay the warrant.
19-1 (d) A designated officer <treasurer> may not draw a check on
19-2 any funds designated in the depository services contract as time
19-3 deposits until notice has been given and the notice period has
19-4 expired under the terms of the contract with the depository.
19-5 (e) The mayor and secretary of the municipality may not draw
19-6 a warrant on a special fund in a depository or under the control of
19-7 the designated officer <treasurer> that was created to pay the
19-8 bonded indebtedness of the municipality other than to pay the
19-9 principal of or interest on the indebtedness or to invest the fund
19-10 as provided by law.
19-11 (f) The designated officer <treasurer> may not pay or draw a
19-12 check to pay money out of a special fund that was created to pay
19-13 the bonded indebtedness of the municipality other than to pay the
19-14 principal of or interest on the indebtedness or to invest the fund
19-15 as provided by law.
19-16 (g) Notwithstanding the provisions of Subsections (b)
19-17 through (f), the governing body of a municipality may adopt
19-18 procedures:
19-19 (1) governing the method by which the designated
19-20 officer is authorized to direct payments from the funds of the
19-21 municipality on deposit with a depository;
19-22 (2) governing the method of payment of obligations of
19-23 the municipality, including payment by check, draft, wire transfer,
19-24 or other method of payment mutually acceptable to the municipality
19-25 and the depository; and
20-1 (3) the governing body determines are necessary to
20-2 ensure the safety and integrity of the payment process.
20-3 (h) If a municipality adopts procedures in accordance with
20-4 Subsection (g), a copy of the adopted procedures shall be filed
20-5 with the depository. The designated officer and the depository
20-6 shall agree upon record-keeping safeguards and other measures
20-7 necessary to ensure the safety and integrity of the payment
20-8 process. The safeguards must be approved by the governing body of
20-9 the municipality if the governing body finds that the safeguards
20-10 are consistent with and do not contravene the procedures adopted
20-11 under Subsection (g).
20-12 Sec. 105.075. Checks Payable at Depository. Checks drawn by
20-13 the treasurer of the municipality against municipal funds on
20-14 deposit are payable by the depository at its place of business in
20-15 the municipality.
20-16 Sec. 105.076. DEBTS PAYABLE OTHER THAN AT MUNICIPAL
20-17 TREASURY. The governing body of the municipality may direct the
20-18 designated officer <treasurer of the municipality> to withdraw from
20-19 a depository and deposit money sufficient to pay a bond, coupon, or
20-20 other indebtedness of the municipality at a place other than at the
20-21 municipal treasury if by its terms the indebtedness is payable on
20-22 maturity or upon redemption prior to maturity at the other
20-23 location.
20-24 (Sections 105.077-105.090 reserved for expansion)
20-25 SUBCHAPTER F. LIABILITY AND REPORT OF DESIGNATED OFFICER
21-1 <TREASURER>
21-2 Sec. 105.091. Liability of Designated Officer <Treasurer>.
21-3 The designated officer <treasurer of the municipality> is not
21-4 responsible for any loss of municipal funds through the negligence,
21-5 failure, or wrongful act of a depository. This section does not
21-6 release the designated officer <treasurer> from responsibility for
21-7 a loss resulting from the official misconduct of the designated
21-8 officer <treasurer>, including a misappropriation of the funds, or
21-9 from responsibility for the funds until a depository is selected
21-10 and the funds are deposited.
21-11 Sec. 105.092. REPORT BY DESIGNATED OFFICER <TREASURER>. In
21-12 conjunction with the publication of the annual financial statement
21-13 of the municipality <On or before the first regular meeting of the
21-14 governing body of the municipality in July of each year>, the
21-15 designated officer <treasurer of the municipality> shall prepare a
21-16 report which shall describe in summary form <to the governing
21-17 body>:
21-18 (1) the amount of receipts and expenditures of the
21-19 municipal treasury;
21-20 (2) the amount of money on hand in each fund;
21-21 (3) the amount of bonds becoming due for redemption
21-22 that require action;
21-23 (4) the amount of interest to be paid during the next
21-24 fiscal year; and
21-25 (5) any other information required by law to be
22-1 reported by the designated officer <treasurer>.
22-2 SECTION 2. Section 2(6), Public Funds Collateral Act
22-3 (Article 2529d, Vernon's Texas Civil Statutes), is amended to read
22-4 as follows:
22-5 (6) "Investment security" means:
22-6 (A) a direct obligation of the United States;
22-7 (B) an obligation that in the opinion of the
22-8 Attorney General of the United States is a general obligation of
22-9 the United States and backed by its full faith and credit;
22-10 (C) an obligation, the principal of and interest
22-11 on which are unconditionally guaranteed by the United States;
22-12 (D) an obligation of an agency or
22-13 instrumentality of the United States, including a mortgage-backed
22-14 security of the agency or instrumentality;
22-15 (E) a general or special obligation issued by a
22-16 public agency, payable from taxes, revenues, or a combination of
22-17 taxes and revenues <that has been rated as to investment quality by
22-18 a nationally recognized rating agency and that has a current rating
22-19 of not less than A or its equivalent>; and
22-20 (F) any security in which a public entity may
22-21 invest under the Public Funds Investment Act of 1987 (Article
22-22 842a-2, Vernon's Texas Civil Statutes).
22-23 SECTION 3. Section 131.901(b), Local Government Code, is
22-24 amended to read as follows:
22-25 (b) An institution selected as a paying agent or trustee for
23-1 specific bonds or obligations or an institution selected by the
23-2 governing body to provide safekeeping services is not considered a
23-3 depository for purposes of this section.
23-4 SECTION 4. Section 116.001(1), Local Government Code, is
23-5 amended to read as follows:
23-6 (1) "Bank" means a banking corporation, <or>
23-7 association or an individual banker, savings and loan association
23-8 or savings bank organized under the laws of this state, or a
23-9 savings and loan association or savings bank organized under
23-10 federal law.
23-11 SECTION 5. Section 23.73(2), Education Code, is amended to
23-12 read as follows:
23-13 (2) "Bank" means a state bank authorized and regulated
23-14 under the laws of the state pertaining to banking and in particular
23-15 authorized and regulated by the Banking Department Self-Support and
23-16 Administration Act, <or> a national bank, a savings and loan
23-17 association or savings bank authorized and regulated by federal
23-18 law, or a savings and loan association or savings bank organized
23-19 under the laws of this state, but does not include any bank the
23-20 deposits of which are not insured by the Federal Deposit Insurance
23-21 Corporation.
23-22 SECTION 6. This Act takes effect September 1, 1993.
23-23 SECTION 7. The importance of this legislation and the
23-24 crowded condition of the calendars in both houses create an
23-25 emergency and an imperative public necessity that the
24-1 constitutional rule requiring bills to be read on three several
24-2 days in each house be suspended, and this rule is hereby suspended.