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.