By: Armbrister S.B. No. 302
73R3234 DWS-F
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. Chapter 105, Local Government Code, is amended to
1-5 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1-13 be withdrawn on the demand of the depositor.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) "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 <(4) "Secretary of a
1-24 municipality" includes the clerk of a municipality>.
2-1 (6) "Depository services contract" means a contract
2-2 executed by a municipality and a depository containing terms and
2-3 conditions relating to the depository services to be provided by
2-4 the depository.
2-5 (7) "Designated officer" means the treasurer of a
2-6 municipality or other officer of the municipality so designated by
2-7 the governing body of a municipality.
2-8 (8) "Federal savings association" means a savings and
2-9 loan association or a savings bank organized under federal law.
2-10 (9) "National bank" means a banking corporation
2-11 organized under the provisions of 12 U.S.C. Section 21.
2-12 (10) "Savings association" means a state savings
2-13 association or a federal savings association domiciled in this
2-14 state.
2-15 (11) "State bank" has the meaning assigned by The
2-16 Texas Banking Code (Article 342-101 et seq., Vernon's Texas Civil
2-17 Statutes).
2-18 (12) "State savings association" means any savings and
2-19 loan association or savings bank organized under the laws of this
2-20 state.
2-21 Sec. 105.002. Funds Affected. This chapter applies to the
2-22 funds, including school funds, of any municipality or any
2-23 department or agency of the municipality<, including any school
2-24 funds of the municipality>.
2-25 (Sections 105.003-105.010 reserved for expansion)
2-26 SUBCHAPTER B. ESTABLISHMENT OF DEPOSITORY
2-27 Sec. 105.011. Depository Authorized. (a) Before awarding a
3-1 depository services contract to a depository, the governing body of
3-2 a municipality shall receive applications for the performance of
3-3 depository services from one or more banks or savings associations
3-4 <At a meeting held at any time, the governing body of a
3-5 municipality may receive applications from one or more banks for
3-6 the deposit of the municipality's funds>.
3-7 (b) The governing body may consider the application of a
3-8 bank or savings association that is not doing business within the
3-9 municipality if:
3-10 (1) the bank or savings association maintains a place
3-11 of business within the state and offers within the state the
3-12 services required by the depository services contract; and
3-13 (2) the governing body, before giving the notice
3-14 required by Section 105.012 and after considering the best
3-15 interests of the municipality in selecting a depository, has
3-16 adopted a written policy expressly permitting the consideration of
3-17 applications received by the municipality from a bank or savings
3-18 association that is not doing business within the municipality.
3-19 (c) The designated officer shall request, receive, and
3-20 review applications for the performance of depository services.
3-21 The designated officer shall present the specifications of each
3-22 application to the governing body who will then select a depository
3-23 <If two or more banks are doing business within a municipality, the
3-24 governing body may consider the applications of only those banks.
3-25 However, a general-law municipality with a population of more than
3-26 20,000 may consider applications from any bank located in the
3-27 county in which the municipality is located or in an adjacent
4-1 county>.
4-2 Sec. 105.012. Notice. (a) The designated officer shall
4-3 give notice to banks and savings associations requesting the
4-4 submission of applications for the performance of depository
4-5 services.
4-6 (b) The notice must contain:
4-7 (1) the name and address of the designated officer
4-8 receiving the applications;
4-9 (2) the date and time the applications are to be
4-10 received by the designated officer; and
4-11 (3) the date, time, and place the governing body of
4-12 the municipality will consider the selection of one or more
4-13 depositories.
4-14 (c) Not later than the 21st day before the date that
4-15 applications for depository services contracts must be received,
4-16 notice of the request shall be published at least once:
4-17 (1) in a newspaper of general circulation in the
4-18 municipality; and
4-19 (2) if the governing body has adopted the written
4-20 policy described by Section 105.011, in a financial publication of
4-21 general circulation published within this state <Not earlier than
4-22 four weeks or later than one week before the date of the meeting,
4-23 the secretary of the municipality shall publish at least once in a
4-24 newspaper published in the municipality a notice of the meeting at
4-25 which applications are to be received>.
4-26 Sec. 105.013. Application. The designated officer may not
4-27 consider an application if it is received after the date specified
5-1 in the notice for receiving applications by the designated officer
5-2 <A bank desiring to be selected as a municipal depository must
5-3 deliver its application to the secretary of the municipality on or
5-4 before the date of the meeting at which applications are to be
5-5 received>.
5-6 Sec. 105.014. REVIEW OF APPLICATIONS. In reviewing the
5-7 applications, the designated officer shall consider the terms and
5-8 conditions for the performance of depository services, including
5-9 the type and cost of services to be provided to the municipality
5-10 consistent with any policy guidelines adopted by the governing body
5-11 regarding the selection of one or more depositories.
5-12 Sec. 105.015. Selection of Depository. (a) The governing
5-13 body of a municipality may authorize the designated officer to
5-14 execute on the municipality's behalf one or more depository
5-15 services contracts <After considering the applications, the
5-16 governing body of the municipality shall select as municipal
5-17 depositories one or more banks that offer the most favorable terms
5-18 and conditions for the handling of the municipal funds>.
5-19 (b) The governing body may reject any of the applications
5-20 and readvertise if all <for> applications are rejected.
5-21 (c) The conflict of interest provisions of Chapter 179, Acts
5-22 of the 60th Legislature, Regular Session, 1967 (Article 2529c,
5-23 Vernon's Texas Civil Statutes), apply to the selection of the
5-24 depositories.
5-25 Sec. 105.016 <105.015>. Designation of Depository. (a) The
5-26 <When security is provided in accordance with Subchapter C and is
5-27 approved by the governing body of the municipality, the> governing
6-1 body shall designate, by an order recorded in its minutes, the bank
6-2 or savings association to serve as a depository for the
6-3 municipality's funds.
6-4 (b) If a bank or savings association selected as a municipal
6-5 depository does not provide security by the deadline prescribed by
6-6 Section 105.031, the selection of the bank or savings association
6-7 <of the bank> as a depository is void, and the governing body may
6-8 consider the depository services application it considers the next
6-9 most advantageous <shall publish notice, receive applications, and
6-10 select another depository in the regular manner>.
6-11 Sec. 105.017. Term of Depository Contract. A municipality
6-12 may approve, execute, and deliver any depository services contract
6-13 the term of which does not exceed five years. The depository
6-14 services contract may contain only terms and conditions approved by
6-15 the governing body of the municipality.
6-16 Sec. 105.018. Additional Services. In addition to
6-17 depository services, a municipality may contract with financial
6-18 institutions, including banks and savings associations, for
6-19 additional financial services under a separate contract if the
6-20 governing body of the municipality determines that additional
6-21 financial services are necessary in the administration, collection,
6-22 investment, and transfer of municipal funds.
6-23 (Sections 105.019 <105.016> to 105.030 reserved for expansion)
6-24 SUBCHAPTER C. SECURITY FOR FUNDS HELD BY DEPOSITORY
6-25 Sec. 105.031. Qualification as Depository. (a) The bank or
6-26 savings association, to qualify as a municipal depository, must,
6-27 not later than five days before the date of commencement of the
7-1 term of the depository services contract, provide security for the
7-2 municipal funds to be deposited in accordance with the depository
7-3 services contract <Within five days after the date a bank is
7-4 selected as a municipal depository, the bank must qualify as a
7-5 depository by providing security for the municipal funds to be
7-6 deposited with the bank>.
7-7 (b) The Public Funds Collateral Act (Article 2529d, Vernon's
7-8 Texas Civil Statutes) governs the type, level, substitution,
7-9 possession, release, and method of valuation of the security
7-10 necessary to secure the deposit of municipal funds.
7-11 (c) The bank or savings association may use personal bonds,
7-12 surety bonds, or any combination to secure municipal funds only if
7-13 each personal bond and surety bond is specifically approved by the
7-14 governing body of the municipality or its designated officer <The
7-15 bank may secure the municipal funds, at the option of the governing
7-16 body of the municipality, by:>
7-17 <(1) personal bond; surety bond; bonds, notes, or
7-18 other securities; or a combination of these methods, as provided by
7-19 this subchapter; or>
7-20 <(2) investment securities or interests in them as
7-21 provided by Chapter 726, Acts of the 67th Legislature, Regular
7-22 Session, 1981 (Article 2529b-1, Vernon's Texas Civil Statutes)>.
7-23 Sec. 105.032. Personal Bond. (a) One or more personal
7-24 bonds executed and filed with the governing body of the
7-25 municipality or its designated officer, payable to the
7-26 municipality, qualify as security under this subchapter if:
7-27 (1) the bonds are signed by at least five solvent
8-1 sureties who:
8-2 (A) own unencumbered real property in the state
8-3 that has a value at least equal to the amount of the bonds and that
8-4 is not exempt from execution under the constitution and other laws
8-5 of this state; or
8-6 (B) have an aggregate net worth at least equal
8-7 to the amount of the bonds; and
8-8 (2) the bonds are approved by the governing body or
8-9 its designated officer.
8-10 (b) When a bond is filed for approval under Subsection
8-11 (a)(1)(A), the sureties shall also file with the governing body a
8-12 statement containing:
8-13 (1) a description of the unencumbered and nonexempt
8-14 real property sufficient to identify the secured property <it on
8-15 the ground>; and
8-16 (2) a fair estimate of the value of each tract of real
8-17 property listed, including the value of any improvements on the
8-18 property.
8-19 (c) When a bond is filed for approval under Subsection
8-20 (a)(1)(B), the sureties shall also file with the governing body or
8-21 designated officer of the municipality an itemized and verified
8-22 financial statement showing that the aggregate net worth of the
8-23 sureties is at least equal to the amount of the bonds.
8-24 (d) After the governing body approves a personal bond, it
8-25 shall be filed with the secretary and the designated officer of the
8-26 municipality. The statement required by Subsection (c) shall be
8-27 attached to the bond.
9-1 Sec. 105.033. Surety Bond. (a) One or more bonds issued
9-2 and executed by one or more solvent surety companies authorized to
9-3 do business in this state, payable to the municipality and filed
9-4 with the secretary and the designated officer <governing body> of
9-5 the municipality, qualify as security under this subchapter if the
9-6 bonds are approved by the governing body.
9-7 (b) After the governing body approves a surety bond, it
9-8 shall be filed with the secretary and the designated officer of the
9-9 municipality.
9-10 Sec. 105.034. Conditions to Acting as Depository <Bonds,
9-11 Notes, and Other Securities>. (a) The depository shall:
9-12 (1) keep the municipal funds covered by the depository
9-13 services contract;
9-14 (2) perform all duties and obligations imposed on the
9-15 depository by law and under the depository services contract;
9-16 (3) pay on presentation all checks drawn on a demand
9-17 deposit account with the depository that are properly payable on
9-18 demand;
9-19 (4) pay all transfers properly payable as directed by
9-20 a designated officer;
9-21 (5) provide and maintain security at the level
9-22 required by the Public Funds Collateral Act (Article 2529d,
9-23 Vernon's Texas Civil Statutes); and
9-24 (6) account for the municipal funds as required by
9-25 law.
9-26 (b) Any suit brought in connection with a depository
9-27 services contract must be tried in the county in which the city
10-1 hall of the municipality is located. <If approved by the governing
10-2 body as to kind and value, a municipal depository may pledge with
10-3 the governing body of the municipality as security under this
10-4 subchapter:>
10-5 <(1) a bond, certificate of indebtedness, or treasury
10-6 note of the United States, or other evidence of indebtedness of the
10-7 United States that is guaranteed as to principal and interest by
10-8 the United States;>
10-9 <(2) a bond of this state or of a county,
10-10 municipality, independent school district, common school district,
10-11 or other school district in this state;>
10-12 <(3) a bond issued under the federal farm loan acts;>
10-13 <(4) a road district bond;>
10-14 <(5) a bond, pledge, or other evidence of indebtedness
10-15 issued by the board of regents of The University of Texas System;>
10-16 <(6) a note or bond secured by mortgages insured and
10-17 debentures issued by the Federal Housing Administration;>
10-18 <(7) shares or share accounts of a savings and loan
10-19 association organized under the laws of this state or of a federal
10-20 savings and loan association domiciled in this state if the payment
10-21 of the share or share accounts is insured by the Federal Savings
10-22 and Loan Insurance Corporation;>
10-23 <(8) bank acceptances of banks that have a capital
10-24 stock of at least $500,000; or>
10-25 <(9) a bond issued by a municipal corporation in this
10-26 state.>
10-27 <Sec. 105.035. ><Condition of Personal Bond or Contract for
11-1 Securities><. (a) A personal bond or surety bond provided, or a
11-2 contract for the pledge of securities under this subchapter, must
11-3 be conditioned that the depository will:>
11-4 <(1) faithfully keep the municipal funds and
11-5 faithfully perform the duties and obligations imposed by law on the
11-6 depository;>
11-7 <(2) pay on presentation all checks drawn on a demand
11-8 deposit account with the depository;>
11-9 <(3) pay all checks drawn on a time deposit account on
11-10 presentation by the treasurer of the municipality after the
11-11 required period of notice; and>
11-12 <(4) account for the municipal funds as required by
11-13 law.>
11-14 <(b) A suit on a personal bond, surety bond, or contract for
11-15 securities provided or pledged under this subchapter must be tried
11-16 in the county in which the municipality is located.>
11-17 <Sec. 105.036. ><Amount of Security Required><. (a) Personal
11-18 or surety bonds that secure municipal funds in a depository must be
11-19 in an amount at least equal to the total amount of the revenue of
11-20 the municipality for the year preceding the year for which the
11-21 bonds are made.>
11-22 <(b) Securities pledged to secure municipal funds on deposit
11-23 in a depository must be in an amount equal to the amount of those
11-24 funds. The value of the securities is determined by the governing
11-25 body of the municipality, and that determination is final and is
11-26 binding on the depository.>
11-27 <Sec. 105.037. ><Security Not Required For Federally Insured
12-1 Deposits><. A depository is not required to provide security for the
12-2 deposit of municipal funds to the extent the deposits are insured
12-3 under 12 U.S.C.A. Sections 1811-1832.>
12-4 (Sections 105.035 <105.038> to 105.050 reserved for expansion)
12-5 SUBCHAPTER D. MAINTENANCE AND MODIFICATION OF SECURITY
12-6 Sec. 105.051. Maintenance of <New> Security. (a) A
12-7 depository services contract shall contain terms and conditions
12-8 relating to the possession, substitution, or release of security,
12-9 including:
12-10 (1) requiring the depository to execute a new bond or
12-11 pledge additional securities for the deposit of municipal funds;
12-12 (2) substituting one security for another;
12-13 (3) releasing securities pledged by a depository in
12-14 excess of the amount required by this chapter;
12-15 (4) the period in which the addition, substitution, or
12-16 release of security by a depository may occur; and
12-17 (5) other matters relating to the possession,
12-18 substitution, or release of security the municipality considers
12-19 necessary for its protection <The governing body of the
12-20 municipality may by written order require a depository to execute a
12-21 new bond or pledge additional or other securities at any time the
12-22 governing body considers it advisable or considers it necessary for
12-23 the protection of the municipality>.
12-24 (b) If a depository fails for any reason to comply with the
12-25 requirements governing the possession, substitution, or release of
12-26 security <file the required new bond or pledge the required
12-27 securities within five days after the date the depository is served
13-1 with a copy of the order>, the governing body may select a new
13-2 depository in the <regular> manner provided in this chapter.
13-3 Sec. 105.052. <Substitution of Securities><. (a) A
13-4 depository is entitled to substitute one type of security for
13-5 another if the substituting security meets the requirements of law
13-6 and is approved by the governing body of the municipality.>
13-7 <(b) The governing body may direct the manner in which
13-8 securities pledged in place of personal or surety bonds are to be
13-9 deposited.>
13-10 <Sec. 105.053. ><Release of Excess Security><. If the
13-11 securities pledged by a depository to secure municipal funds exceed
13-12 the amount required by this chapter, the governing body of the
13-13 municipality shall permit the release of the excess.>
13-14 <Sec. 105.054. ><Inadequate Security><. If for any reason the
13-15 municipal funds on deposit with a depository exceed the amount of
13-16 security pledged, the depository shall immediately pledge
13-17 additional securities with the governing body of the municipality.>
13-18 <Sec. 105.055.> Solvency of Personal Surety. (a) At least
13-19 twice each year while a personal bond securing municipal deposits
13-20 is in effect, the designated officer <governing body> of the
13-21 municipality shall investigate the solvency of each surety on the
13-22 bond. The governing body of the municipality or its designated
13-23 officer may require a surety to make an itemized and verified
13-24 financial statement accurately showing the surety's financial
13-25 position and, if the bond requires the surety to own real property,
13-26 identifying each tract of real property owned by the surety and
13-27 stating its value.
14-1 (b) The governing body of the municipality shall require a
14-2 depository to provide a new bond meeting the requirements of this
14-3 chapter if a financial statement provided under Subsection (a)
14-4 indicates that:
14-5 (1) a surety is insolvent;
14-6 (2) a surety's net worth is less than the amount
14-7 required by this chapter;
14-8 (3) the assets listed are depreciated or their value
14-9 is in any way impaired; or
14-10 (4) real property required by the bond has been
14-11 disposed of or encumbered and the value of the remaining
14-12 unencumbered and nonexempt real property is insufficient to meet
14-13 the requirements of this chapter.
14-14 Sec. 105.053 <105.056>. Solvency of Surety Company and
14-15 Adequacy of Securities. At any time the governing body of the
14-16 municipality considers it necessary for the protection of the
14-17 municipality, the governing body may direct the designated officer
14-18 to investigate the solvency of a surety company that issues a bond
14-19 on behalf of a municipal depository or investigate the value of
14-20 securities pledged by a depository to secure municipal funds.
14-21 Sec. 105.054 <105.057>. Surrender of Interest on Securities.
14-22 Except as provided for by the collateral policies of the
14-23 municipality adopted in accordance with the Public Funds Collateral
14-24 Act (Article 2529d, Vernon's Texas Civil Statutes), on <On> request
14-25 of a municipal depository, the <governing body of the> municipality
14-26 shall surrender, when due, interest coupons or other evidence of
14-27 interest on securities deposited by the depository with the
15-1 governing body if the securities remaining pledged by the
15-2 depository are adequate to meet the requirements of this chapter
15-3 and of the governing body.
15-4 (Sections 105.055 <105.058> to 105.070 reserved for expansion)
15-5 SUBCHAPTER E. DEPOSITORY ACCOUNTS
15-6 Sec. 105.071. Character and Amount of Deposits. (a) The
15-7 governing body of the municipality may determine and designate in
15-8 the depository services contract the character and amount of
15-9 municipal funds that will be demand deposits. However, the
15-10 municipality has the right to maintain other investments of
15-11 municipal funds in accordance with the investment policy adopted by
15-12 the municipality <and that will be time deposits>.
15-13 (b) The designated officer <governing body> may contract
15-14 with a depository for interest on time deposits, including
15-15 certificates of deposit, at any legal rate under federal law, <or
15-16 under a> rule, or regulation <adopted by the board of governors of
15-17 the Federal Reserve System or by the board of directors of the
15-18 Federal Deposit Insurance Corporation>.
15-19 Sec. 105.072. Investments <in United States Securities>.
15-20 Chapter 810, Acts of the 66th Legislature, Regular Session, 1979
15-21 (Article 4413(34c), Vernon's Texas Civil Statutes), and the Public
15-22 Funds Investment Act of 1987 (Article 842a-2, Vernon's Texas Civil
15-23 Statutes) govern the investment of municipal funds <The governing
15-24 body of the municipality may direct the treasurer of the
15-25 municipality to withdraw any municipal funds deposited in a
15-26 depository that are not immediately required to pay obligations of
15-27 the municipality and invest those funds in direct debt securities
16-1 of the United States unless such an investment or withdrawal is
16-2 expressly prohibited by law or the withdrawal is contrary to the
16-3 terms of the depository contract>.
16-4 Sec. 105.073. Deposit of Funds. Not later than the 60th day
16-5 after the date <Immediately after> the governing body of the
16-6 municipality designates a <municipal> depository in accordance with
16-7 Section 105.016, the designated officer <treasurer> of the
16-8 municipality shall transfer to the depository all the municipal
16-9 funds covered by the depository services contract under the
16-10 <treasurer's> control of the designated officer. The designated
16-11 officer <treasurer> shall as soon as practicable also <immediately>
16-12 deposit in the depository to the credit of the municipality any
16-13 money covered by the depository services contract received after
16-14 the depository is designated.
16-15 Sec. 105.074. Payment of Funds <Drawing of Checks and
16-16 Warrants>. (a) The funds of the municipality may be paid out of a
16-17 depository only at <on> the direction of a designated officer
16-18 <checks of the treasurer of the municipality>.
16-19 (b) Except as provided by Subsection (g) <in a municipality
16-20 that operates under a municipal charter provision that provides for
16-21 the drawing of checks or warrants on the depository or municipal
16-22 funds in a manner different from that prescribed by this section>,
16-23 a designated officer <treasurer> may draw a check on a depository
16-24 only on a warrant signed by the mayor and attested by the secretary
16-25 of the municipality.
16-26 (c) If there is sufficient money in a fund in a depository
16-27 against which the proper authority has drawn a warrant, the
17-1 designated officer <treasurer> on presentation of the warrant shall
17-2 draw a check on the depository in favor of the legal holder of the
17-3 warrant, retain the warrant, and charge the warrant against the
17-4 fund on which it is drawn. The designated officer <treasurer> may
17-5 not draw a warrant on a fund in a depository unless the fund has
17-6 sufficient money to pay the warrant.
17-7 (d) A designated officer <treasurer> may not draw a check on
17-8 any funds designated in the depository services contract as time
17-9 deposits until notice has been given and the notice period has
17-10 expired under the terms of the contract with the depository.
17-11 (e) The mayor and secretary of the municipality may not draw
17-12 a warrant on a special fund in a depository or under the control of
17-13 the designated officer <treasurer> that was created to pay the
17-14 bonded indebtedness of the municipality other than to pay the
17-15 principal of or interest on the indebtedness or to invest the fund
17-16 as provided by law.
17-17 (f) The designated officer <treasurer> may not pay or draw a
17-18 check to pay money out of a special fund that was created to pay
17-19 the bonded indebtedness of the municipality other than to pay the
17-20 principal of or interest on the indebtedness or to invest the fund
17-21 as provided by law.
17-22 (g) Notwithstanding Subsections (b) through (f), the
17-23 governing body of a municipality may adopt procedures:
17-24 (1) governing the method by which the designated
17-25 officer is authorized to direct payments from the funds of the
17-26 municipality on deposit with a depository;
17-27 (2) governing the method of payment of obligations of
18-1 the municipality, including payment by check, draft, wire transfer,
18-2 or other method of payment mutually acceptable to the municipality
18-3 and the depository; and
18-4 (3) the governing body determines are necessary to
18-5 ensure the safety and integrity of the payment process.
18-6 (h) If a municipality adopts procedures in accordance with
18-7 Subsection (g), a copy of the adopted procedures shall be filed
18-8 with the depository. The designated officer and the depository
18-9 shall agree upon record-keeping safeguards and other measures
18-10 necessary to ensure the safety and integrity of the payment
18-11 process. The safeguards must be approved by the governing body of
18-12 the municipality if the governing body finds that the safeguards
18-13 are consistent with and do not contravene the procedures adopted
18-14 under Subsection (g).
18-15 Sec. 105.075. <CHECKS PAYABLE AT DEPOSITORY. Checks drawn
18-16 by the treasurer of the municipality against municipal funds on
18-17 deposit are payable by the depository at its place of business in
18-18 the municipality.>
18-19 <Sec. 105.076.> Debts Payable Other Than at Municipal
18-20 Treasury. The governing body of the municipality may direct the
18-21 designated officer <treasurer of the municipality> to withdraw from
18-22 a depository and deposit money sufficient to pay a bond, coupon, or
18-23 other indebtedness of the municipality at a place other than at the
18-24 municipal treasury if by its terms the indebtedness is payable on
18-25 maturity or upon redemption before maturity at the other location.
18-26 (Sections 105.076 <105.077> to 105.090 reserved for expansion)
18-27 SUBCHAPTER F. LIABILITY AND REPORT OF DESIGNATED OFFICER
19-1 <TREASURER>
19-2 Sec. 105.091. Liability of Designated Officer <Treasurer>.
19-3 The designated officer <treasurer of the municipality> is not
19-4 responsible for any loss of municipal funds through the negligence,
19-5 failure, or wrongful act of a depository. This section does not
19-6 release the designated officer <treasurer> from responsibility for
19-7 a loss resulting from the official misconduct of the designated
19-8 officer <treasurer>, including a misappropriation of the funds, or
19-9 from responsibility for the funds until a depository is selected
19-10 and the funds are deposited.
19-11 Sec. 105.092. REPORT BY DESIGNATED OFFICER <TREASURER>. In
19-12 conjunction with the publication of the annual financial statement
19-13 of the municipality <On or before the first regular meeting of the
19-14 governing body of the municipality in July of each year>, the
19-15 designated officer <treasurer of the municipality> shall prepare a
19-16 report which shall describe in summary form <to the governing
19-17 body>:
19-18 (1) the amount of receipts and expenditures of the
19-19 municipal treasury;
19-20 (2) the amount of money on hand in each fund;
19-21 (3) the amount of bonds becoming due for redemption
19-22 that require action;
19-23 (4) the amount of interest to be paid during the next
19-24 fiscal year; and
19-25 (5) any other information required by law to be
19-26 reported by the designated officer <treasurer>.
19-27 SECTION 2. Section 2(6), Public Funds Collateral Act
20-1 (Article 2529d, Vernon's Texas Civil Statutes), is amended to read
20-2 as follows:
20-3 (6) "Investment security" means:
20-4 (A) a direct obligation of the United States;
20-5 (B) an obligation that in the opinion of the
20-6 Attorney General of the United States is a general obligation of
20-7 the United States and backed by its full faith and credit;
20-8 (C) an obligation, the principal of and interest
20-9 on which are unconditionally guaranteed by the United States;
20-10 (D) an obligation of an agency or
20-11 instrumentality of the United States, including a mortgage-backed
20-12 security of the agency or instrumentality;
20-13 (E) a general or special obligation issued by a
20-14 public agency, payable from taxes, revenues, or a combination of
20-15 taxes and revenues <that has been rated as to investment quality by
20-16 a nationally recognized rating agency and that has a current rating
20-17 of not less than A or its equivalent>; and
20-18 (F) any security in which a public entity may
20-19 invest under the Public Funds Investment Act of 1987 (Article
20-20 842a-2, Vernon's Texas Civil Statutes).
20-21 SECTION 3. Section 131.901(b), Local Government Code, is
20-22 amended to read as follows:
20-23 (b) An institution selected as a paying agent or trustee for
20-24 specific bonds or obligations or an institution selected by the
20-25 governing body to provide safekeeping services is not considered a
20-26 depository for purposes of this section.
20-27 SECTION 4. This Act takes effect September 1, 1993.
21-1 SECTION 5. The importance of this legislation and the
21-2 crowded condition of the calendars in both houses create an
21-3 emergency and an imperative public necessity that the
21-4 constitutional rule requiring bills to be read on three several
21-5 days in each house be suspended, and this rule is hereby suspended.