By:  Sibley, Ellis                                     S.B. No. 450
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to authorized investment of the state and certain units of
    1-2  local government.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 2, Public Funds Investment Act of 1987
    1-5  (Article 842a-2, Vernon's Texas Civil Statutes), is amended by
    1-6  adding Subsection (e) to read as follows:
    1-7        (e)  In addition to investments authorized by other law, the
    1-8  state, a department, commission, board, office, or any other entity
    1-9  of state government or an entity listed in Subsection (a) of this
   1-10  section may invest in bonds issued, assumed, or guaranteed by the
   1-11  State of Israel.
   1-12        SECTION 2.  Subsection (a), Section 404.024, Government Code,
   1-13  is amended to read as follows:
   1-14        (a)  The board may determine and designate the amount of
   1-15  state funds to be deposited in state depositories, the amount of
   1-16  those deposits that shall be demand deposits and the amount that
   1-17  shall be time deposits, and the amount of state funds that shall be
   1-18  invested by the treasurer in:
   1-19              (1)  direct security repurchase agreements;
   1-20              (2)  reverse security repurchase agreements;
   1-21              (3)  direct obligations of or obligations the principal
   1-22  and interest of which are guaranteed by the United States;
   1-23              (4)  direct obligations of or obligations guaranteed by
   1-24  agencies or instrumentalities of the United States government;
    2-1              (5)  bankers' acceptances that:
    2-2                    (A)  are eligible for purchase by the Federal
    2-3  Reserve System;
    2-4                    (B)  do not exceed 270 days to maturity; and
    2-5                    (C)  are issued by a bank that has received the
    2-6  highest short-term credit rating by a nationally recognized
    2-7  investment rating firm;
    2-8              (6)  commercial paper that:
    2-9                    (A)  does not exceed 270 days to maturity; and
   2-10                    (B)  has received the highest short-term credit
   2-11  rating by a nationally recognized investment rating firm;
   2-12              (7)  contracts written by the treasury in which the
   2-13  treasury grants the purchaser the right to purchase securities in
   2-14  the treasury's marketable securities portfolio at a specified price
   2-15  over a specified period and for which the treasury is paid a fee
   2-16  and specifically prohibits naked-option or uncovered option
   2-17  trading; <and>
   2-18              (8)  direct obligations of or obligations guaranteed by
   2-19  the Inter-American Development Bank, the International Bank for
   2-20  Reconstruction and Development (the World Bank), the African
   2-21  Development Bank, the Asian Development Bank, and the International
   2-22  Finance Corporation that have received the highest credit rating by
   2-23  a nationally recognized investment rating firm; and
   2-24              (9)  bonds issued, assumed, or guaranteed by the State
   2-25  of Israel.
   2-26        SECTION 3.  Section 845.301, Government Code, is amended to
   2-27  read as follows:
    3-1        Sec. 845.301.  Investment of Assets.  The board of trustees
    3-2  shall invest and reinvest the assets of the retirement system
    3-3  without distinction as to their source in:
    3-4              (1)  interest-bearing bonds or other evidences of
    3-5  indebtedness of this state, a county, school district, city, or
    3-6  other municipal corporation of this state, the United States, or an
    3-7  authority or an agency of the United States;
    3-8              (2)  securities for which the United States or any
    3-9  authority or agency of the United States guarantees the payment of
   3-10  principal and interest;
   3-11              (3)  interest-bearing bonds, notes, or other evidences
   3-12  of indebtedness that are issued by a company:
   3-13                    (A)  incorporated in the United States and that
   3-14  are rated "A" or better by one or more nationally recognized rating
   3-15  agencies approved by the board; or
   3-16                    (B)  in whose stock the retirement system may
   3-17  invest as provided by Subdivision (4);
   3-18              (4)  common or preferred stocks of a company
   3-19  incorporated in the United States that has paid cash dividends on
   3-20  its common stock for 10 consecutive years immediately before the
   3-21  date of purchase and, unless the stocks are bank or insurance
   3-22  stocks, that is listed on an exchange registered with the
   3-23  Securities and Exchange Commission or its successor; <or>
   3-24              (5)  obligations issued, assumed, or guaranteed by the
   3-25  Inter-American Development Bank, the International Bank for
   3-26  Reconstruction and Development (the World Bank), the African
   3-27  Development Bank, the Asian Development Bank, and the International
    4-1  Finance Corporation; or
    4-2              (6)  bonds issued, assumed, or guaranteed by the State
    4-3  of Israel.
    4-4        SECTION 4.  Section 855.301, Government Code, is amended to
    4-5  read as follows:
    4-6        Sec. 855.301.  Investment of Assets.  The board of trustees
    4-7  shall invest and reinvest the assets of the retirement system
    4-8  without distinction as to their source in:
    4-9              (1)  interest-bearing bonds or other evidences of
   4-10  indebtedness of this state, a county, school district, city, or
   4-11  other municipal corporation of this state, the United States, or an
   4-12  authority or agency of the United States;
   4-13              (2)  securities on which the United States or any
   4-14  authority or agency of the United States guarantees the payment of
   4-15  principal and interest;
   4-16              (3)  corporate bonds or debentures that are issued by a
   4-17  company:
   4-18                    (A)  incorporated in the United States and that
   4-19  are rated "A" or better by one or more nationally recognized rating
   4-20  agencies approved by the board; or
   4-21                    (B)  in whose stock the retirement system may
   4-22  invest as provided by Subdivision (4);
   4-23              (4)  common or preferred stocks of a company
   4-24  incorporated in the United States that has paid cash dividends on
   4-25  its stock for 10 consecutive years immediately before the date of
   4-26  purchase and, unless the stocks are bank or insurance stocks, that
   4-27  is listed on an exchange registered with the Securities and
    5-1  Exchange Commission or its successor; <or>
    5-2              (5)  obligations issued, assumed, or guaranteed by the
    5-3  Inter-American Development Bank, the International Bank for
    5-4  Reconstruction and Development (the World Bank), the African
    5-5  Development Bank, the Asian Development Bank, and the International
    5-6  Finance Corporation; or
    5-7              (6)  bonds issued, assumed, or guaranteed by the State
    5-8  of Israel.
    5-9        SECTION 5.  The importance of this legislation and the
   5-10  crowded condition of the calendars in both houses create an
   5-11  emergency and an imperative public necessity that the
   5-12  constitutional rule requiring bills to be read on three several
   5-13  days in each house be suspended, and this rule is hereby suspended,
   5-14  and that this Act take effect and be in force from and after its
   5-15  passage, and it is so enacted.