1-1 By: Price (Senate Sponsor - Bivins) H.B. No. 1793
1-2 (In the Senate - Received from the House April 26, 1993;
1-3 April 27, 1993, read first time and referred to Committee on
1-4 Finance; May 19, 1993, reported favorably by the following vote:
1-5 Yeas 13, Nays 0; May 19, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the custodians of securities pledged to secure state
1-24 funds.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Sections 404.031(f) and (g), Government Code, are
1-27 amended to read as follows:
1-28 (f) Instead of depositing pledged securities with the
1-29 treasurer, a state depository may deposit pledged securities with
1-30 the Federal Reserve Bank of Dallas or the Federal Home Loan Bank of
1-31 Dallas. The securities shall be held by the bank to secure funds
1-32 deposited by the treasurer in the state depository pledging the
1-33 securities. When the pledged securities are deposited, the bank
1-34 <Federal Reserve Bank of Dallas> may apply book entry to the
1-35 securities. The records of the bank <Federal Reserve Bank of
1-36 Dallas> shall at all times reflect the name of the state depository
1-37 depositing the pledged securities, and the bank shall issue an
1-38 advice of transaction to the treasurer and the state depository
1-39 pledging the securities.
1-40 (g) In this section, "permitted institution" means a Federal
1-41 Reserve Bank, a Federal Home Loan Bank, a "clearing corporation" as
1-42 defined by Section 8.102(c), Business & Commerce Code, the Texas
1-43 Treasury Safekeeping Trust Company, a state depository, and any
1-44 state or nationally chartered bank or trust company that is
1-45 controlled by a bank holding company that controls a state
1-46 depository. Neither the state depository that pledges the
1-47 securities nor any bank that is controlled by a bank holding
1-48 company that controls that state depository may be the permitted
1-49 institution with respect to the particular securities pledged by
1-50 that state depository. A custodian holding in trust securities of
1-51 a state depository under Subsection (e) may deposit the pledged
1-52 securities with a permitted institution if the permitted
1-53 institution is the third party to the transaction. The securities
1-54 shall be held by the permitted institution to secure funds
1-55 deposited by the treasurer in the state depository pledging the
1-56 securities. On receipt of the securities, the permitted
1-57 institution shall immediately issue to the custodian an advice of
1-58 transaction or other document evidencing the deposit of the
1-59 securities. When the pledged securities held by a custodian are
1-60 deposited, the permitted institution may apply book entry
1-61 procedures to the securities. The records of the permitted
1-62 institution shall at all times reflect the name of the custodian
1-63 depositing the pledged securities. The custodian shall immediately
1-64 issue and deliver to the treasurer controlled trust receipts for
1-65 the pledged securities. The trust receipts shall indicate that the
1-66 custodian has deposited with the permitted institution the pledged
1-67 securities held in trust for the state depository pledging the
1-68 securities. A legal action or proceeding brought by or against the
2-1 state, arising out of or in connection with the duties of the state
2-2 depository, the custodian, or other permitted institution under
2-3 this subchapter must be brought and maintained in state district
2-4 court in Travis County. In this section, "control" and "bank
2-5 holding company" have the meanings assigned by Article 2, Chapter
2-6 I, The Texas Banking Code (Article 342-102, Vernon's Texas Civil
2-7 Statutes).
2-8 SECTION 2. The importance of this legislation and the
2-9 crowded condition of the calendars in both houses create an
2-10 emergency and an imperative public necessity that the
2-11 constitutional rule requiring bills to be read on three several
2-12 days in each house be suspended, and this rule is hereby suspended,
2-13 and that this Act take effect and be in force from and after its
2-14 passage, and it is so enacted.
2-15 * * * * *
2-16 Austin,
2-17 Texas
2-18 May 19, 1993
2-19 Hon. Bob Bullock
2-20 President of the Senate
2-21 Sir:
2-22 We, your Committee on Finance to which was referred H.B. No. 1793,
2-23 have had the same under consideration, and I am instructed to
2-24 report it back to the Senate with the recommendation that it do
2-25 pass and be printed.
2-26 Montford,
2-27 Chairman
2-28 * * * * *
2-29 WITNESSES
2-30 FOR AGAINST ON
2-31 ___________________________________________________________________
2-32 Name: Catherine A. Ghiglieri, Commissioner x
2-33 Representing: Tx Banking Dept.
2-34 City: Austin
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