BILL ANALYSIS



H.B. 731
By: Allen
March 6, 1995
Committee Report (Unamended)


BACKGROUND

Section 2256, Subchapter A of the Government Code, the "Public
Funds Investment Act", authorizes entities of local government and
institutions of higher education to invest in certain designated
investments.  Those authorized investments include certificates of
deposit, government bonds, and mutual funds, among other types of
investments.

Under the bill, the scope of authorized investments would be
expanded to include "share certificates" of Texas or federal credit
unions.

Share certificates are the equivalent of certificates of deposits
in commercial banks, except that certificates of deposit are
insured by the federal government, whereas share certificates are
insured by private entities.  In the bill, only share certificates
insured by the National Credit Union Share Insurance Fund would
become authorized investments.

PURPOSE

The bill would permit the investment funds of public entities to
invest in share certificates of credit unions.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

     SECTION 1.  Amends Section 2256.007, of the Government Code to
     include share certificates of credit unions as authorized
     investments.

     SECTION 2.  Emergency clause.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance to the rules and a public
hearing was held on 2/20/95.  
The bill was referred to a subcommittee consisting of the following
members:  Haggerty, Johnson & Averitt.  On 3/1/95 the subcommittee
met in a formal meeting and voted to report the measure without
amendments.  

On 3/6/95, the full committee voted to report HB 731 to the House
without amendments with the recommendation that it do pass by a
record vote of 5 ayes, 0 nays, 0 pnv & 4 absent.

The following persons offered testimony for the bill:
     Rep. Ray Allen - bill author
     Jeff Huffman representing the Texas Credit Union League