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.