By: Sibley S.B. No. 450
73R2776 RJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to authorized investment of the state and certain units of
1-3 local government.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Public Funds Investment Act of 1987
1-6 (Article 842a-2, Vernon's Texas Civil Statutes), is amended by
1-7 adding Subsection (e) to read as follows:
1-8 (e) In addition to investments authorized by other law, the
1-9 state, a department, commission, board, office, or any other entity
1-10 of state government or an entity listed in Subsection (a) of this
1-11 section may invest in bonds issued, assumed, or guaranteed by the
1-12 State of Israel.
1-13 SECTION 2. Section 404.024(a), Government Code, is amended
1-14 to read as follows:
1-15 (a) The board may determine and designate the amount of
1-16 state funds to be deposited in state depositories, the amount of
1-17 those deposits that shall be demand deposits and the amount that
1-18 shall be time deposits, and the amount of state funds that shall be
1-19 invested by the treasurer in:
1-20 (1) direct security repurchase agreements;
1-21 (2) reverse security repurchase agreements;
1-22 (3) direct obligations of or obligations the principal
1-23 and interest of which are guaranteed by the United States;
1-24 (4) direct obligations of or obligations guaranteed by
2-1 agencies or instrumentalities of the United States government;
2-2 (5) bankers' acceptances that:
2-3 (A) are eligible for purchase by the Federal
2-4 Reserve System;
2-5 (B) do not exceed 270 days to maturity; and
2-6 (C) are issued by a bank that has received the
2-7 highest short-term credit rating by a nationally recognized
2-8 investment rating firm;
2-9 (6) commercial paper that:
2-10 (A) does not exceed 270 days to maturity; and
2-11 (B) has received the highest short-term credit
2-12 rating by a nationally recognized investment rating firm;
2-13 (7) contracts written by the treasury in which the
2-14 treasury grants the purchaser the right to purchase securities in
2-15 the treasury's marketable securities portfolio at a specified price
2-16 over a specified period and for which the treasury is paid a fee
2-17 and specifically prohibits naked-option or uncovered option
2-18 trading; <and>
2-19 (8) direct obligations of or obligations guaranteed by
2-20 the Inter-American Development Bank, the International Bank for
2-21 Reconstruction and Development (the World Bank), the African
2-22 Development Bank, the Asian Development Bank, and the International
2-23 Finance Corporation that have received the highest credit rating by
2-24 a nationally recognized investment rating firm; and
2-25 (9) bonds issued, assumed, or guaranteed by the State
2-26 of Israel.
2-27 SECTION 3. Section 845.301, Government Code, is amended to
3-1 read as follows:
3-2 Sec. 845.301. Investment of Assets. The board of trustees
3-3 shall invest and reinvest the assets of the retirement system
3-4 without distinction as to their source in:
3-5 (1) interest-bearing bonds or other evidences of
3-6 indebtedness of this state, a county, school district, city, or
3-7 other municipal corporation of this state, the United States, or an
3-8 authority or an agency of the United States;
3-9 (2) securities for which the United States or any
3-10 authority or agency of the United States guarantees the payment of
3-11 principal and interest;
3-12 (3) interest-bearing bonds, notes, or other evidences
3-13 of indebtedness that are issued by a company:
3-14 (A) incorporated in the United States and that
3-15 are rated "A" or better by one or more nationally recognized rating
3-16 agencies approved by the board; or
3-17 (B) in whose stock the retirement system may
3-18 invest as provided by Subdivision (4);
3-19 (4) common or preferred stocks of a company
3-20 incorporated in the United States that has paid cash dividends on
3-21 its common stock for 10 consecutive years immediately before the
3-22 date of purchase and, unless the stocks are bank or insurance
3-23 stocks, that is listed on an exchange registered with the
3-24 Securities and Exchange Commission or its successor; <or>
3-25 (5) obligations issued, assumed, or guaranteed by the
3-26 Inter-American Development Bank, the International Bank for
3-27 Reconstruction and Development (the World Bank), the African
4-1 Development Bank, the Asian Development Bank, and the International
4-2 Finance Corporation; or
4-3 (6) bonds issued, assumed, or guaranteed by the State
4-4 of Israel.
4-5 SECTION 4. Section 855.301, Government Code, is amended to
4-6 read as follows:
4-7 Sec. 855.301. Investment of Assets. The board of trustees
4-8 shall invest and reinvest the assets of the retirement system
4-9 without distinction as to their source in:
4-10 (1) interest-bearing bonds or other evidences of
4-11 indebtedness of this state, a county, school district, city, or
4-12 other municipal corporation of this state, the United States, or an
4-13 authority or agency of the United States;
4-14 (2) securities on which the United States or any
4-15 authority or agency of the United States guarantees the payment of
4-16 principal and interest;
4-17 (3) corporate bonds or debentures that are issued by a
4-18 company:
4-19 (A) incorporated in the United States and that
4-20 are rated "A" or better by one or more nationally recognized rating
4-21 agencies approved by the board; or
4-22 (B) in whose stock the retirement system may
4-23 invest as provided by Subdivision (4);
4-24 (4) common or preferred stocks of a company
4-25 incorporated in the United States that has paid cash dividends on
4-26 its stock for 10 consecutive years immediately before the date of
4-27 purchase and, unless the stocks are bank or insurance stocks, that
5-1 is listed on an exchange registered with the Securities and
5-2 Exchange Commission or its successor; <or>
5-3 (5) obligations issued, assumed, or guaranteed by the
5-4 Inter-American Development Bank, the International Bank for
5-5 Reconstruction and Development (the World Bank), the African
5-6 Development Bank, the Asian Development Bank, and the International
5-7 Finance Corporation; or
5-8 (6) bonds issued, assumed, or guaranteed by the State
5-9 of Israel.
5-10 SECTION 5. The importance of this legislation and the
5-11 crowded condition of the calendars in both houses create an
5-12 emergency and an imperative public necessity that the
5-13 constitutional rule requiring bills to be read on three several
5-14 days in each house be suspended, and this rule is hereby suspended,
5-15 and that this Act take effect and be in force from and after its
5-16 passage, and it is so enacted.