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1-13 be withdrawn on the demand of the depositor.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