By:  Sibley                                           S.B. No. 1156
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the investment of public funds in mutual funds; and
    1-2  declaring an emergency.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 2256.011, Government Code, is hereby
    1-5  amended by redesignating Subsection (b) as Subsection (c), amending
    1-6  Subsection (c),  and adding a new Subsection (b), to read as
    1-7  follows:
    1-8        (b)  In addition to a no-load money market mutual fund
    1-9  permitted as an authorized investment in Subsection (a) above, a
   1-10  no-load mutual fund is an authorized investment under this
   1-11  subchapter if the mutual fund:
   1-12              (1)  is registered with the Securities and Exchange
   1-13  Commission;
   1-14              (2)  has an average weighted maturity of less than two
   1-15  years;
   1-16              (3)  is invested exclusively in obligations described
   1-17  by (i) Subsections (1) and (4) of Section 2256.006 and (ii) Section
   1-18  2256.008; and
   1-19              (4)  is continuously rated as to investment quality by
   1-20  at least two nationally recognized investment rating firms of not
   1-21  less than AA or its equivalent.
   1-22        (c)  An entity is not authorized by this section to:
   1-23              (1)  invest in the aggregate more than 80 percent of
    2-1  its monthly average fund balance, excluding bond proceeds and
    2-2  reserves and other funds held for debt service in money market
    2-3  mutual funds described in Subsection (a) or mutual funds described
    2-4  in Subsection (b), either separately or collectively; or
    2-5              (2)  invest its funds or funds under its control,
    2-6  excluding bond proceeds and reserves and other funds held for debt
    2-7  service, in any one <money market> mutual fund (described in
    2-8  Subsection (a) or Subsection 9b) in an amount that exceeds 10
    2-9  percent of the total assets of the <money market> mutual fund.
   2-10        SECTION 2.  This Act shall take effect September 1, 1995.
   2-11        SECTION 3.  The importance of this legislation and the
   2-12  crowded condition of the calendars in both houses create an
   2-13  emergency and an imperative public necessity that the
   2-14  constitutional rule requiring bills to be read on three several
   2-15  days in each house be suspended, and this rule is hereby suspended.