By: Ellis S.B. No. 1128
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the deposit, investment, safekeeping, and records and
1-2 reports of, and collateral requirements for the deposit of, funds
1-3 held by the state treasurer.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter C, Chapter 404, Government Code, is
1-6 amended by adding Section 404.0212 to read as follows:
1-7 Sec. 404.0212. DEPOSITORY RATING UNDER CERTAIN FEDERAL LAW.
1-8 (a) In this section, "regulated financial institution" has the
1-9 meaning assigned by 12 U.S.C. Section 2902.
1-10 (b) A regulated financial institution that accepts a deposit
1-11 from the treasurer shall report to the treasurer the rating
1-12 assigned to the financial institution under 12 U.S.C. Section 2906.
1-13 (c) A regulated financial institution shall make a report
1-14 required by this section:
1-15 (1) annually, not later than August 1 of each year;
1-16 and
1-17 (2) not later than the 30th day after the date the
1-18 financial institution is notified that the assigned rating has been
1-19 changed.
1-20 (d) The treasurer may not select as a depository a regulated
1-21 financial institution that has been assigned a rating below
1-22 "outstanding record of meeting community credit needs" or
1-23 "satisfactory record of meeting community credit needs" under 12
1-24 U.S.C. Section 2906.
2-1 (e) On receipt of notice that the rating of a financial
2-2 institution is changed to a rating below that required by this
2-3 section, the treasurer shall take immediate action to transfer all
2-4 state funds subject to the custody or control of the treasurer that
2-5 are on deposit with the institution to a qualified financial
2-6 institution.
2-7 (f) The depository contract between a regulated financial
2-8 institution and the treasurer must authorize the withdrawal without
2-9 penalty of the state funds subject to the custody or control of the
2-10 treasurer that are on deposit with the institution if the rating of
2-11 the institution is changed to a rating below that required by
2-12 Subsection (d).
2-13 SECTION 2. Section 404.022, Government Code, is amended by
2-14 adding Subsection (j) to read as follows:
2-15 (j) The board may execute a simplified version of a
2-16 depository agreement with an eligible institution desiring to hold
2-17 $98,000 or less in state deposits that are fully insured by the
2-18 Federal Deposit Insurance Corporation. The treasurer may give the
2-19 institution contingent approval as a depository until the board's
2-20 next scheduled meeting.
2-21 SECTION 3. Subchapter C, Chapter 404, Government Code, is
2-22 amended by adding Section 404.0221 to read as follows:
2-23 Sec. 404.0221. ELIGIBLE COLLATERAL. (a) In this section,
2-24 "public agency" means a board, authority, agency, department,
2-25 commission, political subdivision, municipal corporation, district,
2-26 public corporation, body politic, instrumentality of this state, or
2-27 any other type of political or governmental entity of this state.
3-1 (b) For the purposes of Section 404.022, collateral eligible
3-2 to be pledged with the treasurer to secure state deposits includes:
3-3 (1) direct obligations of or obligations the principal
3-4 and interest of which are guaranteed by the United States
3-5 government;
3-6 (2) direct obligations of or obligations guaranteed by
3-7 agencies or instrumentalities of the United States government; and
3-8 (3) a general or special obligation issued by a public
3-9 agency and approved by the attorney general that is payable from
3-10 taxes, revenues, or both.
3-11 (c) If pledged collateral consists of securities with a
3-12 declining principal balance, the market value of the collateral
3-13 pledged may not be less than 125 percent of the amount of the state
3-14 deposits to be secured.
3-15 (d) Eligible collateral includes only a security with fixed,
3-16 stated rates.
3-17 (e) A loss sustained by a depository that has secured its
3-18 deposits by collateral may be enforced against the collateral.
3-19 (f) The treasurer may reject at any time collateral tendered
3-20 by a state depository without assigning a reason for the rejection,
3-21 and the treasurer's action is final and not subject to review.
3-22 (g) Collateral is not required for deposits to the extent
3-23 that the deposits are insured by the Federal Deposit Insurance
3-24 Corporation.
3-25 SECTION 4. Section 404.024, Government Code, is amended to
3-26 read as follows:
3-27 Sec. 404.024. Authorized Investments. (a) The board may
4-1 determine and designate the amount of state funds to be deposited
4-2 in time deposits in state depositories. The treasurer shall
4-3 recommend to the board a maximum limit for state funds deposited by
4-4 the treasurer at approved state depositories. The percentage of
4-5 state funds to be deposited in state depositories shall be based on
4-6 the interest rates available in competing investments, the demand
4-7 for funds from Texas banks, and the state's liquidity requirements.
4-8 The treasurer shall provide periodic investment reports to the
4-9 board.
4-10 (b) State funds not deposited in state depositories shall be
4-11 invested by the treasurer in:
4-12 (1) direct security repurchase agreements;
4-13 (2) reverse security repurchase agreements;
4-14 (3) direct obligations of or obligations the principal
4-15 and interest of which are guaranteed by the United States;
4-16 (4) direct obligations of or obligations guaranteed by
4-17 agencies or instrumentalities of the United States government;
4-18 (5) bankers' acceptances that:
4-19 (A) are eligible for purchase by the Federal
4-20 Reserve System;
4-21 (B) do not exceed 270 days to maturity; and
4-22 (C) are issued by a bank that has received the
4-23 highest short-term credit rating by a nationally recognized
4-24 investment rating firm;
4-25 (6) commercial paper that:
4-26 (A) does not exceed 270 days to maturity; and
4-27 (B) except as provided by Subsection (i) <(j)>,
5-1 has received the highest short-term credit rating by a nationally
5-2 recognized investment rating firm;
5-3 (7) contracts written by the treasury in which the
5-4 treasury grants the purchaser the right to purchase securities in
5-5 the treasury's marketable securities portfolio at a specified price
5-6 over a specified period and for which the treasury is paid a fee
5-7 and specifically prohibits naked-option or uncovered option
5-8 trading; <and>
5-9 (8) direct obligations of or obligations guaranteed by
5-10 the Inter-American Development Bank, the International Bank for
5-11 Reconstruction and Development (the World Bank), the African
5-12 Development Bank, the Asian Development Bank, and the International
5-13 Finance Corporation that have received the highest credit rating by
5-14 a nationally recognized investment rating firm; <and>
5-15 (9) bonds issued, assumed, or guaranteed by the State
5-16 of Israel;
5-17 (10) obligations of a state or an agency, county,
5-18 city, or other political subdivision of a state; and
5-19 (11) mutual funds or other investment pools secured by
5-20 obligations that are described by Subdivisions (1) through (6).
5-21 (c) Investments in direct security repurchase agreements and
5-22 reverse security repurchase agreements may be made with state or
5-23 national banks doing business <domiciled> in this state or with
5-24 primary dealers as approved by the Federal Reserve System.
5-25 Notwithstanding any other law, the term of any reverse security
5-26 repurchase agreement may not exceed 90 days after the date the
5-27 reverse security repurchase agreement is delivered. Money received
6-1 under the terms of a reverse security repurchase agreement may be
6-2 used to acquire additional authorized investments, but the term of
6-3 the authorized investments acquired must mature not later than the
6-4 expiration date stated in the reverse security repurchase
6-5 agreement.
6-6 (d) The board may contract with a depository for the payment
6-7 of interest on time or demand deposits at a rate not to exceed a
6-8 rate that is lawful under an Act of Congress and rules and
6-9 regulations of the board of governors of the Federal Reserve
6-10 System, the board of directors of the Federal Deposit Insurance
6-11 Corporation, <the Federal Savings and Loan Insurance Corporation,>
6-12 and the Federal Home Loan Banking Board.
6-13 (e) The treasury may not purchase any of the following types
6-14 of investments:
6-15 (1) obligations the payment of which represents the
6-16 coupon payments on the outstanding principal balance of the
6-17 underlying mortgage-backed security collateral and pays no
6-18 principal;
6-19 (2) obligations the payment of which represents the
6-20 principal stream of cash flow from the underlying mortgage-backed
6-21 security collateral and bears no interest;
6-22 (3) collateralized mortgage obligations that have a
6-23 stated final maturity date of greater than 10 years; and
6-24 (4) collateralized mortgage obligations the interest
6-25 rate of which is determined by an index that adjusts opposite to
6-26 the changes in a market index. <Not more than 20 percent of the
6-27 aggregate funds on deposit in financial institutions at any time
7-1 may be in depository institutions other than banks.>
7-2 (f) The treasurer may contract with registered investment
7-3 advisors and other consultants to assist in investment management
7-4 and may pay fees directly from investment earnings <invest the
7-5 gross proceeds from obligations of this state or any agency of this
7-6 state in:>
7-7 <(1) obligations of a state or an agency, county,
7-8 city, or other political subdivision of a state; and>
7-9 <(2) mutual funds composed of obligations described by
7-10 Subdivision (1)>.
7-11 (g) To the extent practicable, the treasurer shall give
7-12 first consideration to Texas banks when investing in direct
7-13 security repurchase agreements.
7-14 (h) <The treasurer may not use state funds to invest in or
7-15 purchase obligations of a private corporation or other private
7-16 business entity doing business in the Republic of South Africa
7-17 unless the corporation or other entity:>
7-18 <(1) has:>
7-19 <(A) adopted the Statement of Principles for
7-20 South Africa as they existed in 1987, as described in the >þLReport on
7-21 the Signatory Companies to the Statement of Principles for South
7-22 Africaää< published by Arthur D. Little, Inc., Cambridge,
7-23 Massachusetts, and has obtained a performance rating in Category 1
7-24 or 2 of the Statement of Principles for South Africa rating system
7-25 as determined by Arthur D. Little, Inc.; or>
7-26 <(B) agreed to the Code of Conduct that is
7-27 enforced by the United States Department of State under Section
8-1 208, Comprehensive Anti-Apartheid Act of 1986 (Pub. L. No. 99-440)
8-2 and has received a rating of "Making Satisfactory Progress"; and>
8-3 <(2) does not supply strategic products or services
8-4 for use by the government, military, or police of the Republic of
8-5 South Africa.>
8-6 <(i) For the purposes of Subsection (h) of this section:>
8-7 <(1) "Doing business in the Republic of South Africa"
8-8 means conducting or performing manufacturing, assembly, or
8-9 warehousing operations within the Republic of South Africa or, if a
8-10 bank or other financial institution, lending money to the
8-11 government of the Republic of South Africa or any of its agencies
8-12 or instrumentalities.>
8-13 <(2) "Strategic products or services" means articles
8-14 designated as arms, ammunition, or implements of war as provided by
8-15 22 Code of Federal Regulations Part 121 or data processing
8-16 equipment or computers sold for military or police use or for use
8-17 in connection with restrictions on travel within the Republic of
8-18 South Africa by residents of that country.>
8-19 <(j)> The treasurer may not use state funds to invest in or
8-20 purchase obligations of a private corporation or other private
8-21 business entity doing business in Northern Ireland unless the
8-22 corporation or other entity:
8-23 (1) adheres to fair employment practices; and
8-24 (2) does not discriminate on the basis of race, color,
8-25 religion, sex, national origin, or disability.
8-26 (i) <(k)> Notwithstanding Subsection (b)(6)(B) <(a)(6)(B)>,
8-27 the treasurer may purchase commercial paper with a rating lower
9-1 than the rating required by that paragraph <subsection> to provide
9-2 liquidity for commercial paper issued by the treasurer or an agency
9-3 of the state.
9-4 SECTION 5. Subsection (c), Section 404.0245, Government
9-5 Code, is amended to read as follows:
9-6 (c) The principal amount of state funds invested and
9-7 outstanding in hedging transactions on any one day may not exceed
9-8 $500,000 with a maximum risk of loss of $5,000,000 in a biennium.
9-9 The total principal amount of state funds that may be invested by
9-10 the <state> treasurer in hedging transactions during any one
9-11 biennium may not exceed the amount of money credited to the
9-12 unclaimed money fund for that biennium and attributable to the
9-13 remittance of mineral proceeds under Chapter 75, Property Code.
9-14 Any premium incurred in connection with hedging transactions may be
9-15 paid only from funds appropriated for that purpose.
9-16 SECTION 6. The heading of Subchapter D, Chapter 404,
9-17 Government Code, is amended to read as follows:
9-18 SUBCHAPTER D. COLLATERAL, DEPOSITS, AND WITHDRAWALS <TREASURER AS
9-19 SECRETARY OF BOARD>
9-20 SECTION 7. The heading of Section 404.031, Government Code,
9-21 is amended to read as follows:
9-22 Sec. 404.031. COLLATERAL REQUIREMENTS.
9-23 SECTION 8. Subsections (b), (e), (g), and (j), Section
9-24 404.031, Government Code, are amended to read as follows:
9-25 (b) If the market value of the securities pledged by a
9-26 depository becomes less than the amount of funds on deposit in the
9-27 depository, the treasurer shall require that additional collateral
10-1 be pledged immediately or deposits reduced <security>. If the
10-2 collateral pledged by a state depository is in excess of the amount
10-3 required by this chapter, the treasurer may permit the release of
10-4 the excess collateral <security>. If the balance of state funds in
10-5 a state depository is increased, the depository shall increase the
10-6 collateral <security> for the deposits to the amount required by
10-7 this chapter.
10-8 (e) Instead of depositing pledged securities with the
10-9 treasurer, a depository may deposit them with a custodian. The
10-10 custodian may be the Texas Treasury Safekeeping Trust Company or a
10-11 state or national bank that has a capital stock and permanent
10-12 surplus of not less than $5 million, is <has been designated> a
10-13 state depository, and has been designated as a custodian by the
10-14 treasurer. The state depository and the custodian of securities
10-15 pledged by that state depository may not be the same bank or be
10-16 owned by the same bank holding company. The securities shall be
10-17 held in trust by the custodian to secure funds deposited by the
10-18 treasurer in the state depository pledging the securities. On
10-19 receipt of the securities, the custodian shall immediately, by book
10-20 entry or otherwise, identify on its books and records the pledge of
10-21 the securities and shall promptly issue and deliver to the
10-22 treasurer controlled trust receipts for the securities pledged.
10-23 The security evidenced by the trust receipts is subject to
10-24 inspection by the treasurer <board or its agents> at any time. The
10-25 depository pledging the securities shall pay the charges, if any,
10-26 of the custodian bank for accepting and holding the securities.
10-27 The <A> custodian <bank>, acting alone or through a permitted
11-1 institution, is for all purposes under state law and
11-2 notwithstanding Chapters 8 and 9, Business & Commerce Code, the
11-3 bailee or agent of the treasurer. The security interest arising
11-4 out of a pledge of securities to secure deposits of the state is
11-5 created, attaches, and is perfected for all purposes under state
11-6 law from the time the custodian identifies the pledge of the
11-7 securities on its books and records and issues the trust receipts.
11-8 The security interest remains perfected as of that time in the
11-9 hands of all subsequent custodians and permitted institutions.
11-10 (g) In this section, "permitted institution" means a Federal
11-11 Reserve Bank, a Federal Home Loan Bank, a "clearing corporation" as
11-12 defined by Section 8.102(c), Business & Commerce Code, the Texas
11-13 Treasury Safekeeping Trust Company, a state depository, and any
11-14 state or nationally chartered bank or trust company that is
11-15 controlled by a bank holding company that controls a state
11-16 depository. Neither the state depository that pledges the
11-17 securities nor any bank that is controlled by a bank holding
11-18 company that controls that state depository may be the permitted
11-19 institution with respect to the particular securities pledged by
11-20 that state depository. A custodian holding in trust securities of
11-21 a state depository under Subsections <Subsection> (e) and (f) may
11-22 deposit the pledged securities with a permitted institution if the
11-23 permitted institution is the third party to the transaction. The
11-24 securities shall be held by the permitted institution to secure
11-25 funds deposited by the treasurer in the state depository pledging
11-26 the securities. On receipt of the securities, the permitted
11-27 institution shall immediately issue to the custodian an advice of
12-1 transaction or other document evidencing the deposit of the
12-2 securities. When the pledged securities held by a custodian are
12-3 deposited, the permitted institution may apply book entry
12-4 procedures to the securities. The records of the permitted
12-5 institution shall at all times reflect the name of the custodian
12-6 depositing the pledged securities. The custodian shall immediately
12-7 issue and deliver to the treasurer controlled trust receipts for
12-8 the pledged securities. The trust receipts shall indicate that the
12-9 custodian has deposited with the permitted institution the pledged
12-10 securities held in trust for the state depository pledging the
12-11 securities. A legal action or proceeding brought by or against the
12-12 state, arising out of or in connection with the duties of the state
12-13 depository, the custodian, or other permitted institution under
12-14 this subchapter must be brought and maintained in state district
12-15 court in Travis County. In this section, "control" and "bank
12-16 holding company" have the meanings assigned by Article 2, Chapter
12-17 I, The Texas Banking Code (Article 342-102, Vernon's Texas Civil
12-18 Statutes).
12-19 (j) If a state depository fails to credit <pay> a deposit or
12-20 part of a deposit made by <on the check of> the treasurer, the
12-21 treasurer may immediately sell or otherwise convert the securities
12-22 to money <and disburse the money, according to law, on warrants
12-23 drawn by the comptroller on the funds which the securities
12-24 secured>.
12-25 SECTION 9. The heading of Section 404.032, Government Code,
12-26 is amended to read as follows:
12-27 Sec. 404.032. Deposits <and Investments>.
13-1 SECTION 10. Subsections (a) and (d), Section 404.032,
13-2 Government Code, are amended to read as follows:
13-3 (a) The treasurer shall deposit state funds in depositories
13-4 that satisfy the collateral <security> requirements of this chapter
13-5 <or invest the funds in investments authorized by Section 404.024>.
13-6 The treasurer may deposit funds designated as demand deposits only
13-7 in banks designated as <centrally located depositories and in
13-8 other> depositories <authorized> by the board.
13-9 (d) The treasurer shall keep sufficient money on deposit in
13-10 demand deposit accounts in banks <depositories> designated by the
13-11 board as clearing banks <institutions> to meet all current claims
13-12 on the state. Items received by the treasurer for collection shall
13-13 be deposited with a clearing bank <institution> to be credited to
13-14 the demand deposit account in the bank <depository>. Checks,
13-15 drafts, or warrants drawn by the treasurer for the payment of
13-16 obligations due by the state may be drawn on such an account in
13-17 such a depository or on the demand deposit account in another state
13-18 depository so that the checks, drafts, or warrants of the state may
13-19 at all times pass current as cash.
13-20 SECTION 11. Section 404.043, Government Code, is amended to
13-21 read as follows:
13-22 Sec. 404.043. Security Officers. The treasurer may <shall>
13-23 employ security officers to provide needed security services for
13-24 the treasury and may commission the officers as peace officers.
13-25 The security officers shall give bond in the same manner required
13-26 by this chapter for employees who handle money or other valuable
13-27 property as part of their duties.
14-1 SECTION 12. Section 404.047, Government Code, is amended to
14-2 read as follows:
14-3 Sec. 404.047. Accounts. The treasurer shall keep accounts
14-4 of the receipt and expenditure of the money in the treasury and
14-5 close the accounts on August 31 of each year. The treasurer shall
14-6 keep proper records <legal vouchers>, distinguishing between the
14-7 receipts and disbursements of each fiscal year.
14-8 SECTION 13. Section 404.048, Government Code, is amended to
14-9 read as follows:
14-10 Sec. 404.048. Report. In addition to the reports required
14-11 by the constitution, the treasurer shall, as required by <submit to
14-12 the governor on the first Monday in November of each year, and at
14-13 other times> the governor <requires>, submit <an exact statement of
14-14 the condition and situation of the treasury,> a statement of the
14-15 balance of money remaining in the treasury <to the credit of the
14-16 state,> and a summary of the receipts and disbursements recorded by
14-17 <of> the treasury <during the preceding year or for another period
14-18 of time that may be specially required>. The treasurer shall
14-19 exhibit all books, papers, and records <vouchers, and other matters
14-20 pertaining to the office for examination> on request by the
14-21 legislature or a branch or committee of the legislature.
14-22 SECTION 14. Subsections (b), (d), and (f), Section 404.052,
14-23 Government Code, are amended to read as follows:
14-24 (b) The <state> treasurer shall deposit money received by
14-25 the treasurer under this section and shall keep a separate account
14-26 for each municipality, district, or political subdivision. The
14-27 payment of interest and principal due on an obligation of the
15-1 municipality, district, or political subdivision must be on deposit
15-2 with the treasurer not later than five business days before the
15-3 date of maturity. Any charges incurred for late receipt of funds
15-4 shall be assessed to the municipality, district, or political
15-5 subdivision. <As payment of interest and principal becomes due on
15-6 an obligation, the treasurer of the municipality, district, or
15-7 political subdivision shall remit to the state treasurer, not later
15-8 than the 15th day before the date of maturity, the amounts due or
15-9 to become due on maturity.> On receipt of those amounts by the
15-10 <state> treasurer, the treasurer <of the municipality, district, or
15-11 political subdivision> shall request the comptroller to issue a
15-12 warrant <to the state treasurer> for the payment of amounts due<,
15-13 and the state treasurer shall pay the same at the office of the
15-14 state treasurer. The warrant shall state on its face:>
15-15 <(1) that the proceeds of the warrant are to be
15-16 applied by the state treasurer to the payment of certain specified
15-17 bonds or interest coupons described in the warrant;>
15-18 <(2) the name of the municipality, district, or
15-19 political subdivision that issued the obligations;>
15-20 <(3) the numbers, amounts, and dates of maturity of
15-21 the obligations and interest to be paid; and>
15-22 <(4) instructions to the state treasurer to return the
15-23 obligation to the treasurer of the municipality, district, or
15-24 political subdivision on receipt>.
15-25 (d) The <state> treasurer shall collect for the use of the
15-26 state from the municipality, district, or political subdivision a
15-27 fee in an amount established by rule of the <state> treasurer that
16-1 is sufficient to pay the <state> treasurer's cost of
16-2 administration. The treasurer of the municipality, district, or
16-3 political subdivision, at the time of the remittance for the
16-4 payment of the maturing obligation or interest, shall remit the fee
16-5 to the <state> treasurer as ex officio treasurer of the
16-6 municipality, district, or political subdivision. On receipt of
16-7 the fee, the <state> treasurer shall deposit <credit> it to the
16-8 appropriate fund <fees earned>. The amount of the fees earned, or
16-9 as much as necessary, is reserved to the <state> treasurer to be
16-10 used in the administration of this chapter. Any balance remaining
16-11 at the end of a fiscal year is available for use in the next fiscal
16-12 year.
16-13 (f) The <state> treasurer shall cancel and return to the
16-14 municipality, district, or political subdivision depositing funds
16-15 for the payment of interest coupons or the retirement of bonds the
16-16 coupons and bonds that have matured or been retired by purchase,
16-17 together with a statement of the account of the municipality,
16-18 district, or subdivision showing the amounts received and placed to
16-19 its credit, service charges, and amount of coupons or bonds
16-20 retired. At the request of the municipality, district, or
16-21 political subdivision, the <state> treasurer shall remit to the
16-22 municipality, district, or subdivision any balance remaining in
16-23 custody of the treasurer for more than two years for which bonds or
16-24 coupons have not been presented for payment. The municipality,
16-25 district, or political subdivision shall pay these coupons or bonds
16-26 when presented. A municipality, district, or political subdivision
16-27 is entitled at any reasonable time to a statement of its account
17-1 with the <state> treasurer.
17-2 SECTION 15. Section 404.055, Government Code, is amended to
17-3 read as follows:
17-4 Sec. 404.055. Time and Demand Deposits<; Records and Annual
17-5 Report>. <(a)> The treasurer shall maintain records of the daily
17-6 balances of and the interest income from funds deposited by the
17-7 treasurer <or the board> in time and demand deposit accounts in
17-8 each bank acting as a state depository. The treasurer shall
17-9 maintain and preserve those records according to the provisions of
17-10 Subchapter D, Chapter 441, <the Preservation of Essential Records
17-11 Act (Article 5441d, Vernon's Texas Civil Statutes)> and of the open
17-12 records law, Chapter 552 <424, Acts of the 63rd Legislature,
17-13 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
17-14 Statutes)>.
17-15 <(b) The treasurer annually shall make a complete report to
17-16 the legislature and to the governor of the amounts of interest
17-17 income earned on funds deposited by the treasurer or the board in
17-18 each state depository. The report must contain the following:>
17-19 <(1) the name of each institution serving as a state
17-20 depository during the fiscal year;>
17-21 <(2) for each institution, the balance at the
17-22 beginning of the fiscal year, the balance at the end of the fiscal
17-23 year, and the average daily balance in demand deposit accounts
17-24 placed by the treasurer or the board;>
17-25 <(3) for each institution, the balance at the
17-26 beginning of the fiscal year, the balance at the end of the fiscal
17-27 year, the average daily balance in time deposit accounts placed by
18-1 the treasurer or the board, and the amount of interest income
18-2 earned on those accounts; and>
18-3 <(4) the totals of those amounts aggregated for all
18-4 state depositories.>
18-5 SECTION 16. Section 404.060, Government Code, is amended to
18-6 read as follows:
18-7 Sec. 404.060. Priority of Warrants. Warrants on the
18-8 treasury shall be on an equal basis with each other, except that if
18-9 a question arises concerning the priority of payment of the
18-10 warrants the treasurer shall determine the priority of payment <and
18-11 necessity requires, they shall be paid in order of their serial
18-12 number within each account.>
18-13 <This section does not apply to:>
18-14 <(1) warrants drawn on the game, fish, and water
18-15 safety account or on funds collected for and appropriated to the
18-16 Texas Department of Transportation;>
18-17 <(2) a special fund created or provided for in the
18-18 constitution; or>
18-19 <(3) a special fund or account consisting of taxes set
18-20 aside and remitted or donated by the legislature to a county or
18-21 municipality>.
18-22 SECTION 17. Section 404.062, Government Code, is amended to
18-23 read as follows:
18-24 Sec. 404.062. UNDETERMINED REMITTANCES <Daily Statement>.
18-25 (a) <The head of each department shall send to the treasurer daily
18-26 a detailed list of persons remitting money the status of which is
18-27 undetermined or that is awaiting the time when it can be taken into
19-1 the treasury and the departments' remittances to the treasury. The
19-2 treasurer shall cash the remittances and place them in the treasury
19-3 vaults or in legally authorized depository banks if the necessity
19-4 arises.>
19-5 <(b) The report from the General Land Office shall include
19-6 all money for interest, principal, and leases of school,
19-7 university, asylum, and other lands.>
19-8 <(c)> This subsection applies to money the status of which
19-9 is undetermined or that is awaiting the time when it can be taken
19-10 into the treasury. The money shall be placed with the treasurer
19-11 and credited to the suspense account. The treasurer shall request
19-12 and maintain information about the deposit of funds into the
19-13 suspense account in accordance with Section 403.052.
19-14 (b) <(d)> When the status of money placed in the suspense
19-15 account is determined, the money shall be transferred from the
19-16 suspense account by placing the portion of it belonging to the
19-17 state in the appropriate fund in the treasury, and the part not
19-18 belonging to the state shall be refunded. The refund shall be made
19-19 either to the payor of the money or to the payor's estate,
19-20 assignee, devisee, or other successor-in-interest.
19-21 (c) <(e)> When a deposit is made, it and any refunds shall
19-22 be entered in the suspense cash book, and the balance shall
19-23 represent the aggregate of the items still in suspense. Warrants
19-24 shall be used for making refunds. The warrants shall be charged
19-25 against the suspense funds to which they apply.
19-26 SECTION 18. Section 404.064, Government Code, is amended to
19-27 read as follows:
20-1 Sec. 404.064. OFFICE FEES <FEE BOOK>. The treasurer shall
20-2 keep records of <an office fee book in which the treasurer shall
20-3 enter in detail> the fees earned by the treasury department. Those
20-4 fees shall be deposited to the appropriate fund in the treasury <at
20-5 the end of each month to the credit of the general revenue fund>.
20-6 SECTION 19. Section 404.065, Government Code, is amended to
20-7 read as follows:
20-8 Sec. 404.065. CASH BALANCING <BOOK>. The treasurer shall
20-9 keep records <a book, to be called the cash balancing book,> for
20-10 the purpose of arriving at the daily cash balance. The daily
20-11 totals of receipts and disbursements and the amount of cash on hand
20-12 and in depository banks shall be recorded <entered in the book. A
20-13 copy of the book entry for each day shall be furnished daily to the
20-14 comptroller>.
20-15 SECTION 20. Section 404.067, Government Code, is amended to
20-16 read as follows:
20-17 Sec. 404.067. SAFEKEEPING; INVESTMENT AGENCIES <BOND BOOK>.
20-18 (a) The treasurer shall keep custodial records that <a bond book
20-19 in which> shall reflect all deposits and releases of securities <be
20-20 entered warrants or authorizations to receive or relinquish bonds>
20-21 held by the treasurer and belonging to a state investment agency
20-22 <fund>.
20-23 (b) The treasurer shall keep appropriate ledger accounts
20-24 that include a short description <of the essential features> of
20-25 each security held in safekeeping for certain investment agencies
20-26 of the state<, of each bond or of each purchase of similar bonds or
20-27 other securities purchased by and belonging to the permanent school
21-1 fund and other funds of the state. Those accounts shall be charged
21-2 with the principal of the bond or purchase and with each separate
21-3 item of interest to accrue to the principal and shall be credited
21-4 with payments as made>.
21-5 (c) The treasurer shall keep controlling or total accounts
21-6 of <bonds or other> securities in the general ledger. Those
21-7 accounts shall be kept with respect to the total amount of bonds or
21-8 other securities belonging to each separate fund.
21-9 (d) <The treasurer shall keep controlling accounts for
21-10 interest to accrue on the bonds. The accounts shall be set up at
21-11 the beginning of the fiscal year for bonds or other securities
21-12 owned at that time and for subsequent purchases when the bonds or
21-13 securities are purchased.>
21-14 <(e)> Those controlling accounts shall be balanced monthly
21-15 with the sum of the individual accounts for <bonds or> securities,
21-16 which also shall be balanced monthly, and shall correspond to
21-17 similar accounts kept by the comptroller.
21-18 SECTION 21. Section 404.068, Government Code, is amended to
21-19 read as follows:
21-20 Sec. 404.068. STATE REGULATORY AGENCIES SAFEKEEPING AND
21-21 PLEDGED COLLATERAL <Securities Register>. (a) The treasurer shall
21-22 keep a suitable system <register> in which shall be entered all
21-23 <bonds, cash, and other> securities deposited with the treasurer by
21-24 <bond investment, surety, and insurance companies and> state
21-25 depositories <depository banks> and other state agencies <all other
21-26 bonds or securities deposited with the treasurer under a statute if
21-27 the registration of the bonds or securities is not otherwise
22-1 provided for by law>. The treasurer shall enter in the system
22-2 <register> the authorizations to deposit <receive> or release
22-3 <relinquish> the <bonds or> securities.
22-4 (b) The treasurer shall keep a securities ledger in which
22-5 appropriate accounts for each custodial agency are kept <all
22-6 matters for which those authorizations are issued shall be kept>.
22-7 That ledger shall be balanced monthly against control accounts kept
22-8 in the general ledger and against corresponding accounts kept by
22-9 the comptroller.
22-10 SECTION 22. Section 404.070, Government Code, is amended to
22-11 read as follows:
22-12 Sec. 404.070. Validity of VOIDED Warrants <Payable From a
22-13 Suspense or Trust Fund>. (a) A warrant issued by the comptroller
22-14 in payment of refunds from a <suspense or trust> fund in the
22-15 treasury becomes void unless presented to the treasurer for payment
22-16 before two years after the end of the fiscal year in which the
22-17 warrant was issued. The sum of money represented by a warrant
22-18 voided under this section shall be transferred by the comptroller
22-19 from the <suspense> fund from which the warrant was originally
22-20 issued to the general revenue fund. Claims for the payment of a
22-21 voided warrant may be presented to the legislature for
22-22 appropriation from which the warrant may be paid. This section
22-23 does not affect the laws regulating the payment of other warrants
22-24 issued by the comptroller.
22-25 (b) When a transfer of money under this section is made, the
22-26 treasurer shall prepare a list of the outstanding warrants
22-27 representing the transfer. The list must show <the name of the
23-1 payee,> the date of the original warrant, the departmental suspense
23-2 account against which the warrant was originally drawn, the
23-3 original warrant number, and the amount of the original warrant.
23-4 The list shall be maintained as a permanent record in the office of
23-5 the treasurer <and proper notation shall be made on each entry on
23-6 the list when the legislature makes appropriation for the refund of
23-7 the amount listed>.
23-8 SECTION 23. Subsection (e), Section 404.071, Government
23-9 Code, is amended to read as follows:
23-10 (e) The treasurer shall provide the comptroller information
23-11 necessary for <notify> the comptroller to compute <of> the amount
23-12 of interest to be paid from the general revenue fund as a result of
23-13 the federal Cash Management Improvement Act of 1990 (31 U.S.C.
23-14 Section 6501 et seq.). The treasurer shall provide the information
23-15 <notifications> in accordance with the comptroller's requirements
23-16 for frequency, method, and format.
23-17 SECTION 24. Section 404.095, Government Code, is amended to
23-18 read as follows:
23-19 Sec. 404.095. Electronic Transfer of Certain Payments.
23-20 (a) This section applies only to a state agency that during the
23-21 preceding state fiscal year collected or received more than $50
23-22 million in fees, fines, penalties, taxes, charges, gifts, grants,
23-23 donations, and other funds, excluding federal grants and interest
23-24 and dividend income.
23-25 (b) If during the preceding state fiscal year a person paid
23-26 a state agency a total of $500,000 or more in a category of
23-27 payments and the agency reasonably anticipates that during the
24-1 current state fiscal year the person will pay the agency $500,000
24-2 or more in a category of payments, the state agency shall require
24-3 the person to transfer payment amounts <of $25,000 or more> due to
24-4 the agency in that category, on or before the date the payment is
24-5 due, by one <or more> of the means of electronic funds transfer
24-6 approved by the treasurer. For the purposes of this section, each
24-7 of the following is a separate category of payments to a state
24-8 agency:
24-9 (1) fees;
24-10 (2) fines;
24-11 (3) civil penalties;
24-12 (4) taxes, with each type of tax specified by the
24-13 treasurer being considered a separate category; and
24-14 (5) other payments to the state agency, excluding
24-15 extraordinary payments such as gifts, grants, donations, interest
24-16 and dividend income, and one time surcharges.
24-17 (c) A state agency by rule may require a person other than a
24-18 person subject to Subsection (b) to transfer all payment amounts
24-19 <of $10,000 or more> due in a category of payments to the agency on
24-20 or before the date the payment is due by electronic funds transfer
24-21 <if the person paid the agency a total of $250,000 or more in that
24-22 category of payments>.
24-23 (d) A person's failure to transfer payment amounts by
24-24 electronic funds transfer may result in the assessment of a penalty
24-25 by the state agency in an amount equal to five percent of the
24-26 payment amount.
24-27 (e) The treasurer shall adopt rules specifying approved
25-1 means of electronic funds transfer and specifying the types of
25-2 taxes constituting separate categories. A person's failure to
25-3 comply with the rules may result in the assessment of a penalty by
25-4 the state agency in an amount equal to five percent of the payment
25-5 amount.
25-6 (f) <(e)> To the extent of any conflict between this section
25-7 and another law specifying the time or manner of making a payment
25-8 to the agency, this section controls. This section does not affect
25-9 a law specifying the time for the filing of a return or other
25-10 report related to the payment.
25-11 (g) <(f)> A state agency may not require payment by
25-12 electronic funds transfer of a protested tax payment.
25-13 SECTION 25. Section 404.105, Government Code, is amended to
25-14 read as follows:
25-15 Sec. 404.105. Capital or Reserve Requirements. The trust
25-16 company shall have capital stock or reserve balances in an amount
25-17 required by applicable regulatory bodies for eligibility for
25-18 federal reserve services, but the amount may not be more than $1
25-19 million. The stock of the trust company is an authorized
25-20 investment for state funds and<,> shall be held by the treasurer<,
25-21 and shall be acquired by the treasurer on an order of the state
25-22 depository board>.
25-23 SECTION 26. Section 404.106, Government Code, is amended by
25-24 adding Subsection (c) to read as follows:
25-25 (c) With respect to specific funds held by the trust company
25-26 for a particular participant, the trust company has the same
25-27 investment authority as that participant for those specific funds.
26-1 SECTION 27. Subsection (d), Section 404.123, Government
26-2 Code, is amended to read as follows:
26-3 (d) All notes must mature and be paid in full during the
26-4 fiscal biennium in which they were issued. The notes must be
26-5 signed by the governor. <The interest rate on the notes must be
26-6 set so that the amount equal to the total amount of interest to be
26-7 paid on the notes plus the costs of issuance of the notes does not
26-8 exceed the amount of interest that would be paid on the notes if
26-9 the interest rate on the notes were one percent less than one of
26-10 the following, as computed by the treasurer:>
26-11 <(1) the average interest yield being earned on funds
26-12 invested by the treasurer as of the date of the notes' issuance; or>
26-13 <(2) the projected average interest yield to be earned
26-14 on funds invested by the treasurer over the life of the note
26-15 issue.>
26-16 SECTION 28. The following provisions are repealed:
26-17 (1) Subsections (e) and (f), Section 404.0245, and
26-18 Sections 404.025 and 404.061, Government Code; and
26-19 (2) Section 2, Chapter 234, Acts of the 73rd
26-20 Legislature, 1993.
26-21 SECTION 29. (a) A regulated financial institution that is
26-22 acting as a depository of funds subject to Section 404.0212,
26-23 Government Code, as added by this Act, on the effective date of
26-24 this Act and that does not have an assigned rating under 12 U.S.C.
26-25 Section 2906 that satisfies the requirement of that section may
26-26 continue to hold the funds only for the period necessary to avoid
26-27 the imposition of a penalty on the state.
27-1 (b) Subsection (f), Section 404.0212, Government Code, as
27-2 added by this Act, applies only to depository contracts executed on
27-3 or after the effective date of this Act.
27-4 SECTION 30. This Act takes effect immediately, except that a
27-5 state depository approved before the effective date of this Act and
27-6 operating as a state depository on the effective date of this Act
27-7 is not required to meet a requirement of Chapter 404, Government
27-8 Code, as amended or added by this Act, until January 1, 1996.
27-9 SECTION 31. The importance of this legislation and the
27-10 crowded condition of the calendars in both houses create an
27-11 emergency and an imperative public necessity that the
27-12 constitutional rule requiring bills to be read on three several
27-13 days in each house be suspended, and this rule is hereby suspended,
27-14 and that this Act take effect and be in force from and after its
27-15 passage, and it is so enacted.