BILL ANALYSIS


                                                         H.B. 731
                                               By: Allen (Harris)State Affairs
                                                          4-10-95
                              Senate Committee Report (Unamended)
BACKGROUND

The Public Investment Act authorizes entities of local government
and institutions of higher education to make certain designated
investments.  Those authorized investments currently include
certificates of deposit, government bonds, and mutual funds, among
others.

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.

PURPOSE

As proposed, H.B. 731 authorizes the funds of a local government or
an institution of higher education to be invested in a share
certificate guaranteed or insured by the National Credit Union
Share Insurance Fund.

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, Government Code, as follows:

     Sec. 2256.007.  New heading:  AUTHORIZED INVESTMENTS: 
     CERTIFICATES OF DEPOSIT AND SHARE CERTIFICATES.  Provides that
     a share certificate is an authorized investment if it is
     issued by a state or national bank domiciled in this state, a
     savings and loan association domiciled in this state, or a
     state or federal credit union domiciled in this state, and is
     guaranteed or insured by the National Credit Union Share
     Insurance Fund or its successor, among other requirements.
SECTION 2. Emergency clause.
           Effective date: upon passage.