BILL ANALYSIS


                                                        H.B. 1907
                                               By: Carona (Lucio)
                                      Intergovernmental Relations
                                                          4-18-95
                              Senate Committee Report (Unamended)
BACKGROUND

Under current law, the county commissioners court is required to
contract with one or more banks in the county for the deposit of
the county's public funds and the trust funds held by the county
and district clerks.  The deadline for the renegotiation is
February, immediately following the general election for state and
county officers.  Since newly elected county commissioners take
office on January 1, it is difficult for the new commissioners to
become sufficiently knowledgeable about the complex depository
process before the February renegotiation date.

In addition, the commissioners court must renegotiate these
depository contracts every two years.  For many counties, this
process has become a costly and time-consuming process.

PURPOSE

As proposed, H.B. 1907 amends provisions relating to depositories
for county public funds, trust funds, and court registry funds.

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 116.021, Local Government Code, as
follows:

     Sec. 116.021.  DEPOSITORY AND SUBDEPOSITORY CONTRACTS.  (a) 
     Requires the commissioners court of a county at its May,
     rather than February, regular term immediately following each
     general election for state and county officers to contract
     with one or more banks in the county for the deposit of the
     county's public funds.  Requires the county to contract with
     a bank under this section for a two-year or four-year contract
     term.
     
     (b)  Requires the contract to allow the bank to establish,
       on the basis of negotiations with the county, new interest
       rates and financial terms of the contract that will take
       effect during the final two years of a four-year contract
       under certain conditions.  Deletes text regarding a February
       regular term.
       
       (c)  Authorizes a commissioners court to select, by the
       process described by Section 116.024 or by negotiated bid,
       one or more depositories in the same manner as at the
       regular time, if for any reason a county depository is not
       selected under Subsection (a).
       
       SECTION 2.   Amends Section 116.022(a), Local Government Code, to
require the county judge to place over the judge's name, in a
newspaper published once each week for at least 20 days before the
May, rather than February, regular term in the county, a notice
that the commissioners court intends to make the contract. 
SECTION 3. Amends Section 117.021, Local Government Code, as
follows:

     Sec.  117.021.  APPLICATIONS.  (a)  Requires the commissioners
     court of a county at its May, rather than February, regular
     term after a general election for state and county officers to
     receive an application from any bank in the county to be the
     depository for trust funds held by the county and district
     clerks.  Requires the county to contract with a back for a
     two-year or four-year contract term.
     
     (b)  Requires a four-year term contract to allow the bank to
       establish new interest rates and financial terms of the
       contract that will take effect during the final two years of
       the four-year contract if certain conditions exist.
       
       (c)  Created from existing text.
       
       (d)  Authorizes the commissioners court to select at any
       subsequent time after 20 days' notice, one or more
       depositories in the same manner as at the regular term if
       for any reason a county depository is not selected under
       Subsection (a).
SECTION 4. Emergency clause.
           Effective date: upon passage.