74R13228 GCH-F
By Ellis S.B. No. 1128
Substitute the following for S.B. No. 1128:
By Marchant C.S.S.B. No. 1128
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the deposit, investment, safekeeping, and records and
1-3 reports of, and collateral requirements for the deposit of, funds
1-4 held by the state treasurer.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 404.021, Government Code, is amended to
1-7 read as follows:
1-8 Sec. 404.021. Eligible Institutions. (a) Any state or
1-9 national bank doing business in the state may be designated by the
1-10 board as a state depository. Designation of a bank as a depository
1-11 includes all of the bank's branches within the state.
1-12 (b) Any savings and loan association doing business
1-13 <domiciled> in the state may be designated by the board as a state
1-14 depository.
1-15 (c) Any state or federal credit union doing business in the
1-16 state may be designated by the board as a state depository.
1-17 (d) Deposits of eligible institutions designated as state
1-18 depositories must be covered by the Federal Deposit Insurance
1-19 Corporation or the National Credit Union Share Insurance Fund. <Any
1-20 institution in the state whose accounts or deposits are insured
1-21 according to the laws of the United States may be designated by the
1-22 board as a state depository and may accept state funds to the
1-23 extent of that insurance, regardless of the amount of its paid-up
1-24 capital stock and permanent surplus.>
2-1 SECTION 2. Subchapter C, Chapter 404, Government Code, is
2-2 amended by adding Section 404.0212 to read as follows:
2-3 Sec. 404.0212. DEPOSITORY RATING UNDER CERTAIN FEDERAL LAW.
2-4 (a) In this section, "regulated financial institution" has the
2-5 meaning assigned by 12 U.S.C. Section 2902.
2-6 (b) A regulated financial institution that accepts a deposit
2-7 from the treasurer shall report to the treasurer the rating
2-8 assigned to the financial institution under 12 U.S.C. Section 2906.
2-9 (c) A regulated financial institution shall make a report
2-10 required by this section:
2-11 (1) annually, not later than August 1 of each year;
2-12 and
2-13 (2) not later than the 30th day after the date the
2-14 financial institution is notified that the assigned rating has been
2-15 changed.
2-16 (d) The board may not select as a depository a regulated
2-17 financial institution that has been assigned a rating below
2-18 "outstanding record of meeting community credit needs" or
2-19 "satisfactory record of meeting community credit needs" under 12
2-20 U.S.C. Section 2906.
2-21 (e) On receipt of notice that the rating of a financial
2-22 institution is changed to a rating below that required by this
2-23 section, the treasurer shall take immediate action to transfer all
2-24 state funds subject to the custody or control of the treasurer that
2-25 are on deposit with the institution to a qualified financial
2-26 institution.
2-27 (f) The depository contract between a regulated financial
3-1 institution and the board must authorize the withdrawal without
3-2 penalty of the state funds subject to the custody or control of the
3-3 treasurer that are on deposit with the institution if the rating of
3-4 the institution is changed to a rating below that required by
3-5 Subsection (d).
3-6 SECTION 3. Section 404.022, Government Code, is amended by
3-7 adding Subsection (j) to read as follows:
3-8 (j) The board may execute a simplified version of a
3-9 depository agreement with an eligible institution desiring to hold
3-10 $98,000 or less in state deposits that are fully insured by the
3-11 Federal Deposit Insurance Corporation or the National Credit Union
3-12 Share Insurance Fund. The treasurer may give the institution
3-13 contingent approval as a depository until the board's next
3-14 scheduled meeting.
3-15 SECTION 4. Subchapter C, Chapter 404, Government Code, is
3-16 amended by adding Section 404.0221 to read as follows:
3-17 Sec. 404.0221. ELIGIBLE COLLATERAL. (a) In this section,
3-18 "public agency" means a board, authority, agency, department,
3-19 commission, political subdivision, municipal corporation, district,
3-20 public corporation, body politic, instrumentality of this state, or
3-21 any other type of political or governmental entity of this state.
3-22 (b) For the purposes of Section 404.022, collateral eligible
3-23 to be pledged with the treasurer to secure state deposits includes:
3-24 (1) direct obligations of or obligations the principal
3-25 and interest of which are guaranteed by the United States
3-26 government;
3-27 (2) direct obligations of or obligations guaranteed by
4-1 agencies or instrumentalities of the United States government; and
4-2 (3) a general or special obligation issued by a public
4-3 agency and approved by the attorney general that is payable from
4-4 taxes, revenues, or both.
4-5 (c) If pledged collateral consists of securities with a
4-6 declining principal balance, the market value of the collateral
4-7 pledged may not be less than 125 percent of the amount of the state
4-8 deposits to be secured.
4-9 (d) Eligible collateral includes only a security with fixed,
4-10 stated rates.
4-11 (e) A loss sustained by a depository that has secured its
4-12 deposits by collateral may be enforced against the collateral.
4-13 (f) The treasurer may reject at any time collateral tendered
4-14 by a state depository without assigning a reason for the rejection,
4-15 and the treasurer's action is final and not subject to review.
4-16 (g) Collateral is not required for deposits to the extent
4-17 that the deposits are insured by the Federal Deposit Insurance
4-18 Corporation or the National Credit Union Share Insurance Fund.
4-19 SECTION 5. Section 404.024, Government Code, is amended to
4-20 read as follows:
4-21 Sec. 404.024. Authorized Investments. (a) The board may
4-22 determine and designate the amount of state funds to be deposited
4-23 in time deposits in state depositories. The treasurer shall
4-24 recommend to the board a maximum limit for state funds deposited by
4-25 the treasurer at approved state depositories. The percentage of
4-26 state funds to be deposited in state depositories shall be based on
4-27 the interest rates available in competing investments, the demand
5-1 for funds from Texas banks, and the state's liquidity requirements.
5-2 The treasurer shall provide periodic investment reports to the
5-3 board.
5-4 (b) State funds not deposited in state depositories shall be
5-5 invested by the treasurer in:
5-6 (1) direct security repurchase agreements;
5-7 (2) reverse security repurchase agreements;
5-8 (3) direct obligations of or obligations the principal
5-9 and interest of which are guaranteed by the United States;
5-10 (4) direct obligations of or obligations guaranteed by
5-11 agencies or instrumentalities of the United States government;
5-12 (5) bankers' acceptances that:
5-13 (A) are eligible for purchase by the Federal
5-14 Reserve System;
5-15 (B) do not exceed 270 days to maturity; and
5-16 (C) are issued by a bank that has received the
5-17 highest short-term credit rating by a nationally recognized
5-18 investment rating firm;
5-19 (6) commercial paper that:
5-20 (A) does not exceed 270 days to maturity; and
5-21 (B) except as provided by Subsection (i) <(j)>,
5-22 has received the highest short-term credit rating by a nationally
5-23 recognized investment rating firm;
5-24 (7) contracts written by the treasury in which the
5-25 treasury grants the purchaser the right to purchase securities in
5-26 the treasury's marketable securities portfolio at a specified price
5-27 over a specified period and for which the treasury is paid a fee
6-1 and specifically prohibits naked-option or uncovered option
6-2 trading; <and>
6-3 (8) direct obligations of or obligations guaranteed by
6-4 the Inter-American Development Bank, the International Bank for
6-5 Reconstruction and Development (the World Bank), the African
6-6 Development Bank, the Asian Development Bank, and the International
6-7 Finance Corporation that have received the highest credit rating by
6-8 a nationally recognized investment rating firm; <and>
6-9 (9) bonds issued, assumed, or guaranteed by the State
6-10 of Israel;
6-11 (10) obligations of a state or an agency, county,
6-12 city, or other political subdivision of a state; and
6-13 (11) mutual funds secured by obligations that are
6-14 described by Subdivisions (1) through (6).
6-15 (c) Investments in direct security repurchase agreements and
6-16 reverse security repurchase agreements may be made with state or
6-17 national banks doing business <domiciled> in this state or with
6-18 primary dealers as approved by the Federal Reserve System.
6-19 Notwithstanding any other law, the term of any reverse security
6-20 repurchase agreement may not exceed 90 days after the date the
6-21 reverse security repurchase agreement is delivered. Money received
6-22 under the terms of a reverse security repurchase agreement may be
6-23 used to acquire additional authorized investments, but the term of
6-24 the authorized investments acquired must mature not later than the
6-25 expiration date stated in the reverse security repurchase
6-26 agreement.
6-27 (d) The board may contract with a depository for the payment
7-1 of interest on time or demand deposits at a rate not to exceed a
7-2 rate that is lawful under an Act of Congress and rules and
7-3 regulations of the board of governors of the Federal Reserve
7-4 System, the board of directors of the Federal Deposit Insurance
7-5 Corporation, the National Credit Union Administration Board, <the
7-6 Federal Savings and Loan Insurance Corporation,> and the Federal
7-7 Home Loan Banking Board.
7-8 (e) The treasury may not purchase any of the following types
7-9 of investments:
7-10 (1) obligations the payment of which represents the
7-11 coupon payments on the outstanding principal balance of the
7-12 underlying mortgage-backed security collateral and pays no
7-13 principal;
7-14 (2) obligations the payment of which represents the
7-15 principal stream of cash flow from the underlying mortgage-backed
7-16 security collateral and bears no interest;
7-17 (3) collateralized mortgage obligations that have a
7-18 stated final maturity date of greater than 10 years; and
7-19 (4) collateralized mortgage obligations the interest
7-20 rate of which is determined by an index that adjusts opposite to
7-21 the changes in a market index. <Not more than 20 percent of the
7-22 aggregate funds on deposit in financial institutions at any time
7-23 may be in depository institutions other than banks.>
7-24 (f) The treasurer by rule may define derivative investments
7-25 other than those described by Subsection (e). The treasury may not
7-26 purchase investments defined by rule adopted under this subsection
7-27 in an amount that at the time of purchase will cause the aggregate
8-1 value of the investments to exceed five percent of the treasury's
8-2 total investments <The treasurer may invest the gross proceeds from
8-3 obligations of this state or any agency of this state in:>
8-4 <(1) obligations of a state or an agency, county,
8-5 city, or other political subdivision of a state; and>
8-6 <(2) mutual funds composed of obligations described by
8-7 Subdivision (1)>.
8-8 (g) To the extent practicable, the treasurer shall give
8-9 first consideration to Texas banks when investing in direct
8-10 security repurchase agreements.
8-11 (h) <The treasurer may not use state funds to invest in or
8-12 purchase obligations of a private corporation or other private
8-13 business entity doing business in the Republic of South Africa
8-14 unless the corporation or other entity:>
8-15 <(1) has:>
8-16 <(A) adopted the Statement of Principles for
8-17 South Africa as they existed in 1987, as described in the >þLReport on
8-18 the Signatory Companies to the Statement of Principles for South
8-19 Africaää< published by Arthur D. Little, Inc., Cambridge,
8-20 Massachusetts, and has obtained a performance rating in Category 1
8-21 or 2 of the Statement of Principles for South Africa rating system
8-22 as determined by Arthur D. Little, Inc.; or>
8-23 <(B) agreed to the Code of Conduct that is
8-24 enforced by the United States Department of State under Section
8-25 208, Comprehensive Anti-Apartheid Act of 1986 (Pub. L. No. 99-440)
8-26 and has received a rating of "Making Satisfactory Progress"; and>
8-27 <(2) does not supply strategic products or services
9-1 for use by the government, military, or police of the Republic of
9-2 South Africa.>
9-3 <(i) For the purposes of Subsection (h) of this section:>
9-4 <(1) "Doing business in the Republic of South Africa"
9-5 means conducting or performing manufacturing, assembly, or
9-6 warehousing operations within the Republic of South Africa or, if a
9-7 bank or other financial institution, lending money to the
9-8 government of the Republic of South Africa or any of its agencies
9-9 or instrumentalities.>
9-10 <(2) "Strategic products or services" means articles
9-11 designated as arms, ammunition, or implements of war as provided by
9-12 22 Code of Federal Regulations Part 121 or data processing
9-13 equipment or computers sold for military or police use or for use
9-14 in connection with restrictions on travel within the Republic of
9-15 South Africa by residents of that country.>
9-16 <(j)> The treasurer may not use state funds to invest in or
9-17 purchase obligations of a private corporation or other private
9-18 business entity doing business in Northern Ireland unless the
9-19 corporation or other entity:
9-20 (1) adheres to fair employment practices; and
9-21 (2) does not discriminate on the basis of race, color,
9-22 religion, sex, national origin, or disability.
9-23 (i) <(k)> Notwithstanding Subsection (b)(6)(B) <(a)(6)(B)>,
9-24 the treasurer may purchase commercial paper with a rating lower
9-25 than the rating required by that paragraph <subsection> to provide
9-26 liquidity for commercial paper issued by the treasurer or an agency
9-27 of the state.
10-1 SECTION 6. Subsection (c), Section 404.0245, Government
10-2 Code, is amended to read as follows:
10-3 (c) The principal amount of state funds invested and
10-4 outstanding in hedging transactions on any one day may not exceed
10-5 $500,000 with a maximum risk of loss of $5,000,000 in a biennium.
10-6 The total principal amount of state funds that may be invested by
10-7 the <state> treasurer in hedging transactions during any one
10-8 biennium may not exceed the amount of money credited to the
10-9 unclaimed money fund for that biennium and attributable to the
10-10 remittance of mineral proceeds under Chapter 75, Property Code.
10-11 Any premium incurred in connection with hedging transactions may be
10-12 paid only from funds appropriated for that purpose.
10-13 SECTION 7. The heading of Subchapter D, Chapter 404,
10-14 Government Code, is amended to read as follows:
10-15 SUBCHAPTER D. COLLATERAL, DEPOSITS, AND WITHDRAWALS <TREASURER AS
10-16 SECRETARY OF BOARD>
10-17 SECTION 8. The heading of Section 404.031, Government Code,
10-18 is amended to read as follows:
10-19 Sec. 404.031. COLLATERAL REQUIREMENTS.
10-20 SECTION 9. Subsections (b), (e), (g), and (j), Section
10-21 404.031, Government Code, are amended to read as follows:
10-22 (b) If the market value of the securities pledged by a
10-23 depository becomes less than the amount of funds on deposit in the
10-24 depository, the treasurer shall require that additional collateral
10-25 be pledged immediately or deposits reduced <security>. If the
10-26 collateral pledged by a state depository is in excess of the amount
10-27 required by this chapter, the treasurer may permit the release of
11-1 the excess collateral <security>. If the balance of state funds in
11-2 a state depository is increased, the depository shall increase the
11-3 collateral <security> for the deposits to the amount required by
11-4 this chapter.
11-5 (e) Instead of depositing pledged securities with the
11-6 treasurer, a depository may deposit them with a custodian. The
11-7 custodian may be the Texas Treasury Safekeeping Trust Company or a
11-8 state or national bank that has a capital stock and permanent
11-9 surplus of not less than $5 million, is <has been designated> a
11-10 state depository, and has been designated as a custodian by the
11-11 treasurer. The state depository and the custodian of securities
11-12 pledged by that state depository may not be the same bank or be
11-13 owned by the same bank holding company. The securities shall be
11-14 held in trust by the custodian to secure funds deposited by the
11-15 treasurer in the state depository pledging the securities. On
11-16 receipt of the securities, the custodian shall immediately, by book
11-17 entry or otherwise, identify on its books and records the pledge of
11-18 the securities and shall promptly issue and deliver to the
11-19 treasurer controlled trust receipts for the securities pledged.
11-20 The security evidenced by the trust receipts is subject to
11-21 inspection by the treasurer <board or its agents> at any time. The
11-22 depository pledging the securities shall pay the charges, if any,
11-23 of the custodian bank for accepting and holding the securities.
11-24 The <A> custodian <bank>, acting alone or through a permitted
11-25 institution, is for all purposes under state law and
11-26 notwithstanding Chapters 8 and 9, Business & Commerce Code, the
11-27 bailee or agent of the treasurer. The security interest arising
12-1 out of a pledge of securities to secure deposits of the state is
12-2 created, attaches, and is perfected for all purposes under state
12-3 law from the time the custodian identifies the pledge of the
12-4 securities on its books and records and issues the trust receipts.
12-5 The security interest remains perfected as of that time in the
12-6 hands of all subsequent custodians and permitted institutions.
12-7 (g) In this section, "permitted institution" means a Federal
12-8 Reserve Bank, a Federal Home Loan Bank, a "clearing corporation" as
12-9 defined by Section 8.102(c), Business & Commerce Code, the Texas
12-10 Treasury Safekeeping Trust Company, a state depository, and any
12-11 state or nationally chartered bank or trust company that is
12-12 controlled by a bank holding company that controls a state
12-13 depository. Neither the state depository that pledges the
12-14 securities nor any bank that is controlled by a bank holding
12-15 company that controls that state depository may be the permitted
12-16 institution with respect to the particular securities pledged by
12-17 that state depository. A custodian holding in trust securities of
12-18 a state depository under Subsections <Subsection> (e) and (f) may
12-19 deposit the pledged securities with a permitted institution if the
12-20 permitted institution is the third party to the transaction. The
12-21 securities shall be held by the permitted institution to secure
12-22 funds deposited by the treasurer in the state depository pledging
12-23 the securities. On receipt of the securities, the permitted
12-24 institution shall immediately issue to the custodian an advice of
12-25 transaction or other document evidencing the deposit of the
12-26 securities. When the pledged securities held by a custodian are
12-27 deposited, the permitted institution may apply book entry
13-1 procedures to the securities. The records of the permitted
13-2 institution shall at all times reflect the name of the custodian
13-3 depositing the pledged securities. The custodian shall immediately
13-4 issue and deliver to the treasurer controlled trust receipts for
13-5 the pledged securities. The trust receipts shall indicate that the
13-6 custodian has deposited with the permitted institution the pledged
13-7 securities held in trust for the state depository pledging the
13-8 securities. A legal action or proceeding brought by or against the
13-9 state, arising out of or in connection with the duties of the state
13-10 depository, the custodian, or other permitted institution under
13-11 this subchapter must be brought and maintained in state district
13-12 court in Travis County. In this section, "control" and "bank
13-13 holding company" have the meanings assigned by Article 2, Chapter
13-14 I, The Texas Banking Code (Article 342-102, Vernon's Texas Civil
13-15 Statutes).
13-16 (j) If a state depository fails to credit <pay> a deposit or
13-17 part of a deposit made by <on the check of> the treasurer, the
13-18 treasurer may immediately sell or otherwise convert the securities
13-19 to money <and disburse the money, according to law, on warrants
13-20 drawn by the comptroller on the funds which the securities
13-21 secured>.
13-22 SECTION 10. The heading of Section 404.032, Government Code,
13-23 is amended to read as follows:
13-24 Sec. 404.032. Deposits <and Investments>.
13-25 SECTION 11. Subsection (a), Section 404.032, Government
13-26 Code, is amended to read as follows:
13-27 (a) The treasurer shall deposit state funds in depositories
14-1 that satisfy the collateral <security> requirements of this chapter
14-2 <or invest the funds in investments authorized by Section 404.024>.
14-3 The treasurer may deposit funds designated as demand deposits only
14-4 in institutions <banks> designated as <centrally located
14-5 depositories and in other> depositories <authorized> by the board.
14-6 SECTION 12. Section 404.043, Government Code, is amended to
14-7 read as follows:
14-8 Sec. 404.043. Security Officers. The treasurer may <shall>
14-9 employ security officers to provide needed security services for
14-10 the treasury and may commission the officers as peace officers.
14-11 The security officers shall give bond in the same manner required
14-12 by this chapter for employees who handle money or other valuable
14-13 property as part of their duties.
14-14 SECTION 13. Section 404.047, Government Code, is amended to
14-15 read as follows:
14-16 Sec. 404.047. Accounts. The treasurer shall keep accounts
14-17 of the receipt and expenditure of the money in the treasury and
14-18 close the accounts on August 31 of each year. The treasurer shall
14-19 keep proper records <legal vouchers>, distinguishing between the
14-20 receipts and disbursements of each fiscal year.
14-21 SECTION 14. Section 404.048, Government Code, is amended to
14-22 read as follows:
14-23 Sec. 404.048. Report. In addition to the reports required
14-24 by the constitution, the treasurer shall, as required by <submit to
14-25 the governor on the first Monday in November of each year, and at
14-26 other times> the governor <requires>, submit <an exact statement of
14-27 the condition and situation of the treasury,> a statement of the
15-1 balance of money remaining in the treasury <to the credit of the
15-2 state,> and a summary of the receipts and disbursements recorded by
15-3 <of> the treasury <during the preceding year or for another period
15-4 of time that may be specially required>. The treasurer shall
15-5 exhibit all books, papers, and records <vouchers, and other matters
15-6 pertaining to the office for examination> on request by the
15-7 legislature or a branch or committee of the legislature.
15-8 SECTION 15. Subsections (b), (d), and (f), Section 404.052,
15-9 Government Code, are amended to read as follows:
15-10 (b) The <state> treasurer shall deposit money received by
15-11 the treasurer under this section and shall keep a separate account
15-12 for each municipality, district, or political subdivision. The
15-13 payment of interest and principal due on an obligation of the
15-14 municipality, district, or political subdivision must be on deposit
15-15 with the treasurer not later than five business days before the
15-16 date of maturity. Any charges incurred for late receipt of funds
15-17 shall be assessed to the municipality, district, or political
15-18 subdivision. <As payment of interest and principal becomes due on
15-19 an obligation, the treasurer of the municipality, district, or
15-20 political subdivision shall remit to the state treasurer, not later
15-21 than the 15th day before the date of maturity, the amounts due or
15-22 to become due on maturity.> On receipt of those amounts by the
15-23 <state> treasurer, the treasurer <of the municipality, district, or
15-24 political subdivision> shall request the comptroller to issue a
15-25 warrant <to the state treasurer> for the payment of amounts due<,
15-26 and the state treasurer shall pay the same at the office of the
15-27 state treasurer. The warrant shall state on its face:>
16-1 <(1) that the proceeds of the warrant are to be
16-2 applied by the state treasurer to the payment of certain specified
16-3 bonds or interest coupons described in the warrant;>
16-4 <(2) the name of the municipality, district, or
16-5 political subdivision that issued the obligations;>
16-6 <(3) the numbers, amounts, and dates of maturity of
16-7 the obligations and interest to be paid; and>
16-8 <(4) instructions to the state treasurer to return the
16-9 obligation to the treasurer of the municipality, district, or
16-10 political subdivision on receipt>.
16-11 (d) The <state> treasurer shall collect for the use of the
16-12 state from the municipality, district, or political subdivision a
16-13 fee in an amount established by rule of the <state> treasurer that
16-14 is sufficient to pay the <state> treasurer's cost of
16-15 administration. The treasurer of the municipality, district, or
16-16 political subdivision, at the time of the remittance for the
16-17 payment of the maturing obligation or interest, shall remit the fee
16-18 to the <state> treasurer as ex officio treasurer of the
16-19 municipality, district, or political subdivision. On receipt of
16-20 the fee, the <state> treasurer shall deposit <credit> it to the
16-21 appropriate fund <fees earned>. The amount of the fees earned, or
16-22 as much as necessary, is reserved to the <state> treasurer to be
16-23 used in the administration of this chapter. Any balance remaining
16-24 at the end of a fiscal year is available for use in the next fiscal
16-25 year.
16-26 (f) The <state> treasurer shall cancel and return to the
16-27 municipality, district, or political subdivision depositing funds
17-1 for the payment of interest coupons or the retirement of bonds the
17-2 coupons and bonds that have matured or been retired by purchase,
17-3 together with a statement of the account of the municipality,
17-4 district, or subdivision showing the amounts received and placed to
17-5 its credit, service charges, and amount of coupons or bonds
17-6 retired. At the request of the municipality, district, or
17-7 political subdivision, the <state> treasurer shall remit to the
17-8 municipality, district, or subdivision any balance remaining in
17-9 custody of the treasurer for more than two years for which bonds or
17-10 coupons have not been presented for payment. The municipality,
17-11 district, or political subdivision shall pay these coupons or bonds
17-12 when presented. A municipality, district, or political subdivision
17-13 is entitled at any reasonable time to a statement of its account
17-14 with the <state> treasurer.
17-15 SECTION 16. Section 404.055, Government Code, is amended to
17-16 read as follows:
17-17 Sec. 404.055. Time and Demand Deposits<; Records and Annual
17-18 Report>. <(a)> The treasurer shall maintain records of the daily
17-19 balances of and the interest income from funds deposited by the
17-20 treasurer <or the board> in time and demand deposit accounts in
17-21 each bank acting as a state depository. The treasurer shall
17-22 maintain and preserve those records according to the provisions of
17-23 Subchapter D, Chapter 441, <the Preservation of Essential Records
17-24 Act (Article 5441d, Vernon's Texas Civil Statutes)> and of the open
17-25 records law, Chapter 552 <424, Acts of the 63rd Legislature,
17-26 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
17-27 Statutes)>.
18-1 <(b) The treasurer annually shall make a complete report to
18-2 the legislature and to the governor of the amounts of interest
18-3 income earned on funds deposited by the treasurer or the board in
18-4 each state depository. The report must contain the following:>
18-5 <(1) the name of each institution serving as a state
18-6 depository during the fiscal year;>
18-7 <(2) for each institution, the balance at the
18-8 beginning of the fiscal year, the balance at the end of the fiscal
18-9 year, and the average daily balance in demand deposit accounts
18-10 placed by the treasurer or the board;>
18-11 <(3) for each institution, the balance at the
18-12 beginning of the fiscal year, the balance at the end of the fiscal
18-13 year, the average daily balance in time deposit accounts placed by
18-14 the treasurer or the board, and the amount of interest income
18-15 earned on those accounts; and>
18-16 <(4) the totals of those amounts aggregated for all
18-17 state depositories.>
18-18 SECTION 17. Section 404.060, Government Code, is amended to
18-19 read as follows:
18-20 Sec. 404.060. Priority of Warrants. Warrants on the
18-21 treasury shall be on an equal basis with each other, except that if
18-22 a question arises concerning the priority of payment of the
18-23 warrants the treasurer shall determine the priority of payment <and
18-24 necessity requires, they shall be paid in order of their serial
18-25 number within each account.>
18-26 <This section does not apply to:>
18-27 <(1) warrants drawn on the game, fish, and water
19-1 safety account or on funds collected for and appropriated to the
19-2 Texas Department of Transportation;>
19-3 <(2) a special fund created or provided for in the
19-4 constitution; or>
19-5 <(3) a special fund or account consisting of taxes set
19-6 aside and remitted or donated by the legislature to a county or
19-7 municipality>.
19-8 SECTION 18. Section 404.062, Government Code, is amended to
19-9 read as follows:
19-10 Sec. 404.062. UNDETERMINED REMITTANCES <Daily Statement>.
19-11 (a) <The head of each department shall send to the treasurer daily
19-12 a detailed list of persons remitting money the status of which is
19-13 undetermined or that is awaiting the time when it can be taken into
19-14 the treasury and the departments' remittances to the treasury. The
19-15 treasurer shall cash the remittances and place them in the treasury
19-16 vaults or in legally authorized depository banks if the necessity
19-17 arises.>
19-18 <(b) The report from the General Land Office shall include
19-19 all money for interest, principal, and leases of school,
19-20 university, asylum, and other lands.>
19-21 <(c)> This subsection applies to money the status of which
19-22 is undetermined or that is awaiting the time when it can be taken
19-23 into the treasury. The money shall be placed with the treasurer
19-24 and credited to the suspense account. The treasurer shall request
19-25 and maintain information about the deposit of funds into the
19-26 suspense account in accordance with Section 403.052.
19-27 (b) <(d)> When the status of money placed in the suspense
20-1 account is determined, the money shall be transferred from the
20-2 suspense account by placing the portion of it belonging to the
20-3 state in the appropriate fund in the treasury, and the part not
20-4 belonging to the state shall be refunded. The refund shall be made
20-5 either to the payor of the money or to the payor's estate,
20-6 assignee, devisee, or other successor-in-interest.
20-7 (c) <(e)> When a deposit is made, it and any refunds shall
20-8 be entered in the suspense cash book, and the balance shall
20-9 represent the aggregate of the items still in suspense. Warrants
20-10 shall be used for making refunds. The warrants shall be charged
20-11 against the suspense funds to which they apply.
20-12 SECTION 19. Section 404.064, Government Code, is amended to
20-13 read as follows:
20-14 Sec. 404.064. OFFICE FEES <FEE BOOK>. The treasurer shall
20-15 keep records of <an office fee book in which the treasurer shall
20-16 enter in detail> the fees earned by the treasury department. Those
20-17 fees shall be deposited to the appropriate fund in the treasury <at
20-18 the end of each month to the credit of the general revenue fund>.
20-19 SECTION 20. Section 404.065, Government Code, is amended to
20-20 read as follows:
20-21 Sec. 404.065. CASH BALANCING <BOOK>. The treasurer shall
20-22 keep records <a book, to be called the cash balancing book,> for
20-23 the purpose of arriving at the daily cash balance. The daily
20-24 totals of receipts and disbursements and the amount of cash on hand
20-25 and in depository banks shall be recorded <entered in the book. A
20-26 copy of the book entry for each day shall be furnished daily to the
20-27 comptroller>.
21-1 SECTION 21. Section 404.067, Government Code, is amended to
21-2 read as follows:
21-3 Sec. 404.067. SAFEKEEPING; INVESTMENT AGENCIES <BOND BOOK>.
21-4 (a) The treasurer shall keep custodial records that <a bond book
21-5 in which> shall reflect all deposits and releases of securities <be
21-6 entered warrants or authorizations to receive or relinquish bonds>
21-7 held by the treasurer and belonging to a state investment agency
21-8 <fund>.
21-9 (b) The treasurer shall keep appropriate ledger accounts
21-10 that include a short description <of the essential features> of
21-11 each security held in safekeeping for certain investment agencies
21-12 of the state<, of each bond or of each purchase of similar bonds or
21-13 other securities purchased by and belonging to the permanent school
21-14 fund and other funds of the state. Those accounts shall be charged
21-15 with the principal of the bond or purchase and with each separate
21-16 item of interest to accrue to the principal and shall be credited
21-17 with payments as made>.
21-18 (c) The treasurer shall keep controlling or total accounts
21-19 of <bonds or other> securities in the general ledger. Those
21-20 accounts shall be kept with respect to the total amount of bonds or
21-21 other securities belonging to each separate fund.
21-22 (d) <The treasurer shall keep controlling accounts for
21-23 interest to accrue on the bonds. The accounts shall be set up at
21-24 the beginning of the fiscal year for bonds or other securities
21-25 owned at that time and for subsequent purchases when the bonds or
21-26 securities are purchased.>
21-27 <(e)> Those controlling accounts shall be balanced monthly
22-1 with the sum of the individual accounts for <bonds or> securities,
22-2 which also shall be balanced monthly, and shall correspond to
22-3 similar accounts kept by the comptroller.
22-4 SECTION 22. Section 404.068, Government Code, is amended to
22-5 read as follows:
22-6 Sec. 404.068. STATE REGULATORY AGENCIES SAFEKEEPING AND
22-7 PLEDGED COLLATERAL <Securities Register>. (a) The treasurer shall
22-8 keep a suitable system <register> in which shall be entered all
22-9 <bonds, cash, and other> securities deposited with the treasurer by
22-10 <bond investment, surety, and insurance companies and> state
22-11 depositories <depository banks> and other state agencies <all other
22-12 bonds or securities deposited with the treasurer under a statute if
22-13 the registration of the bonds or securities is not otherwise
22-14 provided for by law>. The treasurer shall enter in the system
22-15 <register> the authorizations to deposit <receive> or release
22-16 <relinquish> the <bonds or> securities.
22-17 (b) The treasurer shall keep a securities ledger in which
22-18 appropriate accounts for each custodial agency are kept <all
22-19 matters for which those authorizations are issued shall be kept>.
22-20 That ledger shall be balanced monthly against control accounts kept
22-21 in the general ledger and against corresponding accounts kept by
22-22 the comptroller.
22-23 SECTION 23. Section 404.070, Government Code, is amended to
22-24 read as follows:
22-25 Sec. 404.070. Validity of VOIDED Warrants <Payable From a
22-26 Suspense or Trust Fund>. (a) A warrant issued by the comptroller
22-27 in payment of refunds from a <suspense or trust> fund in the
23-1 treasury becomes void unless presented to the treasurer for payment
23-2 before two years after the end of the fiscal year in which the
23-3 warrant was issued. The sum of money represented by a warrant
23-4 voided under this section shall be transferred by the comptroller
23-5 from the <suspense> fund from which the warrant was originally
23-6 issued to the general revenue fund. Claims for the payment of a
23-7 voided warrant may be presented to the legislature for
23-8 appropriation from which the warrant may be paid. This section
23-9 does not affect the laws regulating the payment of other warrants
23-10 issued by the comptroller.
23-11 (b) When a transfer of money under this section is made, the
23-12 treasurer shall prepare a list of the outstanding warrants
23-13 representing the transfer. The list must show <the name of the
23-14 payee,> the date of the original warrant, the departmental suspense
23-15 account against which the warrant was originally drawn, the
23-16 original warrant number, and the amount of the original warrant.
23-17 The list shall be maintained as a permanent record in the office of
23-18 the treasurer <and proper notation shall be made on each entry on
23-19 the list when the legislature makes appropriation for the refund of
23-20 the amount listed>.
23-21 SECTION 24. Subsection (e), Section 404.071, Government
23-22 Code, is amended to read as follows:
23-23 (e) The treasurer shall provide the comptroller information
23-24 necessary for <notify> the comptroller to compute <of> the amount
23-25 of interest to be paid from the general revenue fund as a result of
23-26 the federal Cash Management Improvement Act of 1990 (31 U.S.C.
23-27 Section 6501 et seq.). The treasurer shall provide the information
24-1 <notifications> in accordance with the comptroller's requirements
24-2 for frequency, method, and format.
24-3 SECTION 25. Section 404.095, Government Code, is amended to
24-4 read as follows:
24-5 Sec. 404.095. Electronic Transfer of Certain Payments.
24-6 (a) This section applies only to a state agency that during the
24-7 preceding state fiscal year collected or received more than $50
24-8 million in fees, fines, penalties, taxes, charges, gifts, grants,
24-9 donations, and other funds, excluding federal grants and interest
24-10 and dividend income.
24-11 (b) If during the preceding state fiscal year a person paid
24-12 a state agency a total of $500,000 or more in a category of
24-13 payments and the agency reasonably anticipates that during the
24-14 current state fiscal year the person will pay the agency $500,000
24-15 or more in a category of payments, the state agency shall require
24-16 the person to transfer payment amounts <of $25,000 or more> due to
24-17 the agency in that category, on or before the date the payment is
24-18 due, by one <or more> of the means of electronic funds transfer
24-19 approved by the treasurer. For the purposes of this section, each
24-20 of the following is a separate category of payments to a state
24-21 agency:
24-22 (1) fees;
24-23 (2) fines;
24-24 (3) civil penalties;
24-25 (4) taxes, with each type of tax specified by the
24-26 treasurer being considered a separate category; and
24-27 (5) other payments to the state agency, excluding
25-1 extraordinary payments such as gifts, grants, donations, interest
25-2 and dividend income, and one time surcharges.
25-3 (c) A state agency by rule may require a person other than a
25-4 person subject to Subsection (b) to transfer all payment amounts
25-5 <of $10,000 or more> due in a category of payments to the agency on
25-6 or before the date the payment is due by electronic funds transfer
25-7 <if the person paid the agency a total of $250,000 or more in that
25-8 category of payments>.
25-9 (d) A person's failure to transfer payment amounts by
25-10 electronic funds transfer may result in the assessment of a penalty
25-11 by the state agency in an amount equal to five percent of the
25-12 payment amount.
25-13 (e) The treasurer shall adopt rules specifying approved
25-14 means of electronic funds transfer and specifying the types of
25-15 taxes constituting separate categories. A person's failure to
25-16 comply with the rules may result in the assessment of a penalty by
25-17 the state agency in an amount equal to five percent of the payment
25-18 amount.
25-19 (f) <(e)> To the extent of any conflict between this section
25-20 and another law specifying the time or manner of making a payment
25-21 to the agency, this section controls. This section does not affect
25-22 a law specifying the time for the filing of a return or other
25-23 report related to the payment.
25-24 (g) <(f)> A state agency may not require payment by
25-25 electronic funds transfer of a protested tax payment.
25-26 SECTION 26. Section 404.105, Government Code, is amended to
25-27 read as follows:
26-1 Sec. 404.105. Capital or Reserve Requirements. The trust
26-2 company shall have capital stock or reserve balances in an amount
26-3 required by applicable regulatory bodies for eligibility for
26-4 federal reserve services, but the amount may not be more than $1
26-5 million. The stock of the trust company is an authorized
26-6 investment for state funds and<,> shall be held by the treasurer<,
26-7 and shall be acquired by the treasurer on an order of the state
26-8 depository board>.
26-9 SECTION 27. Section 404.106, Government Code, is amended by
26-10 adding Subsection (c) to read as follows:
26-11 (c) With respect to specific funds held by the trust company
26-12 for a particular participant, the trust company has the same
26-13 investment authority as that participant for those specific funds.
26-14 SECTION 28. Section 404.121, Government Code, is amended to
26-15 read as follows:
26-16 Sec. 404.121. Definitions. In this subchapter:
26-17 (1) "Cash flow deficit" for any period means the
26-18 excess, if any, of expenditures paid and transfers made from the
26-19 general revenue fund in the period, including payments provided by
26-20 Section 16.260, Education Code, over taxes and other revenues
26-21 deposited to the fund in the period, other than revenues deposited
26-22 pursuant to Section 403.092, that are legally available for the
26-23 expenditures and transfers.
26-24 (2) "Committee" means the cash management committee.
26-25 (3) <(2)> "Credit agreement" means a loan agreement,
26-26 revolving credit agreement, agreement establishing a line of
26-27 credit, letter of credit, reimbursement agreement, insurance
27-1 contract, commitment to purchase tax and revenue anticipation
27-2 notes, purchase or sale agreement, forward payment conversion
27-3 agreement, contract providing for payments based on levels of or
27-4 changes in interest rates or currency exchange rates, or commitment
27-5 or other contract or agreement approved by the treasurer in
27-6 connection with the authorization, issuance, security, exchange,
27-7 payment, purchase, or redemption of an obligation, interest on an
27-8 obligation, or both.
27-9 (4) <(3)> "Tax and revenue anticipation notes" and
27-10 "notes" mean notes issued under this section, including any
27-11 obligations under credit agreements entered into by the treasurer
27-12 in connection with the issuance of the notes.
27-13 (5) <(4)> "Temporary cash shortfall" during any period
27-14 means the greater of:
27-15 (A) the <cumulative> cash flow deficit forecast
27-16 by the treasurer for the <at any time during a> period; or
27-17 (B) <within a fiscal year in which> the cash
27-18 balance of taxes and other revenues in the general revenue fund at
27-19 the beginning of the period that are legally available for
27-20 expenditures and transfers included in the cash flow deficit, other
27-21 than transfers deposited pursuant to Section 403.092, less the cash
27-22 flow deficit for the period and less<, as projected by the
27-23 treasurer, is insufficient to honor the authorized expenditures
27-24 from that fund during that period and to establish> an amount
27-25 determined by the treasurer that is reasonably required as a cash
27-26 balance in the general revenue fund, but the reasonable account
27-27 balance may not exceed 10 percent of expenditures and transfers
28-1 made from the general revenue fund in the fiscal year before the
28-2 year in which the determination is made.
28-3 SECTION 29. Subsection (d), Section 404.123, Government
28-4 Code, is amended to read as follows:
28-5 (d) All notes must mature and be paid in full during the
28-6 fiscal biennium in which they were issued. The notes must be
28-7 signed by the governor. <The interest rate on the notes must be
28-8 set so that the amount equal to the total amount of interest to be
28-9 paid on the notes plus the costs of issuance of the notes does not
28-10 exceed the amount of interest that would be paid on the notes if
28-11 the interest rate on the notes were one percent less than one of
28-12 the following, as computed by the treasurer:>
28-13 <(1) the average interest yield being earned on funds
28-14 invested by the treasurer as of the date of the notes' issuance; or>
28-15 <(2) the projected average interest yield to be earned
28-16 on funds invested by the treasurer over the life of the note
28-17 issue.>
28-18 SECTION 30. Subsections (b) and (c), Section 404.124,
28-19 Government Code, are amended to read as follows:
28-20 (b) Based on the forecast the committee may approve the
28-21 issuance of notes and the maximum outstanding balance of notes in
28-22 any fiscal year. The outstanding balance may not exceed the
28-23 maximum temporary cash shortfall forecast by the treasurer for any
28-24 period in the fiscal year. The treasurer may not issue notes in
28-25 excess of the amount approved <the amount of notes that may be
28-26 issued and determine whether the notes shall be sold on a
28-27 negotiated or competitive bid basis. If the committee determines
29-1 that competitive bids are appropriate, the underwriter of any notes
29-2 issued under this section shall be selected by the solicitation of
29-3 sealed bids and an appropriate bid notice shall be published at
29-4 least one time in one or more recognized financial publications of
29-5 general circulation published within the state and one or more
29-6 recognized financial publications of general circulation published
29-7 outside the state. Unless all bids are rejected, the underwriter
29-8 shall be selected from the bids received>.
29-9 (c) The committee may determine whether the notes will be
29-10 sold on a negotiated or competitive bid basis. If the committee
29-11 determines that competitive bids are appropriate, the underwriter
29-12 of any notes issued under this section shall be selected by the
29-13 solicitation of sealed bids and an appropriate bid notice shall be
29-14 published at least one time in one or more recognized financial
29-15 publications of general circulation published within the state and
29-16 one or more recognized financial publications of general
29-17 circulation published outside the state. Unless all bids are
29-18 rejected, the underwriter shall be selected from the bids received.
29-19 The treasurer may not sell the notes in a manner not approved. <The
29-20 committee may not approve the issuance of notes in excess of the
29-21 amount reasonably necessary to meet the temporary cash shortfall.
29-22 The treasurer may not issue notes in excess of the amount approved
29-23 or sell the notes in a manner not approved.>
29-24 SECTION 31. The following provisions are repealed:
29-25 (1) Subsections (e) and (f), Section 404.0245, and
29-26 Sections 404.025 and 404.061, Government Code; and
29-27 (2) Section 2, Chapter 234, Acts of the 73rd
30-1 Legislature, 1993.
30-2 SECTION 32. (a) A regulated financial institution that is
30-3 acting as a depository of funds subject to Section 404.0212,
30-4 Government Code, as added by this Act, on the effective date of
30-5 this Act and that does not have an assigned rating under 12 U.S.C.
30-6 Section 2906 that satisfies the requirement of that section may
30-7 continue to hold the funds only for the period necessary to avoid
30-8 the imposition of a penalty on the state.
30-9 (b) Subsection (f), Section 404.0212, Government Code, as
30-10 added by this Act, applies only to depository contracts executed on
30-11 or after the effective date of this Act.
30-12 SECTION 33. This Act takes effect immediately, except that a
30-13 state depository approved before the effective date of this Act and
30-14 operating as a state depository on the effective date of this Act
30-15 is not required to meet a requirement of Chapter 404, Government
30-16 Code, as amended or added by this Act, and a state or federal
30-17 credit union may not be designated as a state depository, until
30-18 January 1, 1996.
30-19 SECTION 34. The importance of this legislation and the
30-20 crowded condition of the calendars in both houses create an
30-21 emergency and an imperative public necessity that the
30-22 constitutional rule requiring bills to be read on three several
30-23 days in each house be suspended, and this rule is hereby suspended,
30-24 and that this Act take effect and be in force from and after its
30-25 passage, and it is so enacted.