SRC-HRD S.B. 701 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 701
By: Armbrister
Finance
2-27-97
As Filed


DIGEST 

On September 1, 1996, the office of the state treasurer was abolished and
all powers, duties, obligations, rights and contracts transferred to the
Comptroller of Public Accounts (comptroller).   
In addition, the comptroller became the sole office, director, and
shareholder of the Texas Treasury Safekeeping Trust Company (trust
company).  This bill would change some references to "treasurer" to
"comptroller."  

The comptroller's responsibilities include providing management,
safekeeping, and investment opportunities, through the trust company, to
agencies and political subdivisions of the state.  This bill would
authorize the comptroller to invest in foreign currency for the purpose of
facilitating investments by state agencies that have the authority to
invest in foreign securities.  In addition, this bill would allow the
trust company to take full advantage of the services offered by the
Depository Trust Company.  The trust company became a member of the
Depository Trust Company in 1995. S.B. 701 also transfers the
responsibility of approval of the investment policies of the Workers'
Compensation Insurance Fund and the Workers' Compensation Insurance
Facility to the State Board of Insurance.  

PURPOSE

As proposed, S.B. 701 changes some references to "treasurer" to
"comptroller." This bill also authorizes the comptroller to make foreign
investments in foreign currency for the sole purpose of facilitating
investments by state agencies that have the authority to invest in foreign
securities.  In addition, S.B. 701  transfers the responsibility of
approval of the Workers' Compensation Insurance Fund and the Workers'
Compensation Insurance Facility to the State Board of Insurance.  Finally,
this bill authorizes the Texas Treasury Safekeeping Trust Company to enter
into certain contracts and agreements with the Depository Trust Company. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 404.024(b), (f), (g), (h), and (i), Government
Code, to require state funds not deposited in state depositories to be
invested by the comptroller, rather than the treasurer, in certain
securities; and, among others, foreign currency for the sole purpose of
facilitating investments by state agencies that have the authority to
invest in foreign securities.  Makes conforming changes. 

SECTION 2. Amends Chapter G, Section 404.103(b), Government Code, to
authorize the  Texas Treasury Safekeeping Trust Company (trust company),
rather than trust company, to enter into contracts and trust agreements or
other fiduciary instruments with the treasurer, the Federal Reserve
System, the Depository Trust Company, and other third parties.  Requires
the trust company's obligations to be guaranteed by the state to the
extent permitted by the Texas Constitution and the contracts, trust
agreements, or other fiduciary instruments between the trust company, the
Federal Reserve System, and the Depository Trust Company. 

SECTION 3. Amends Article 5.76-2, Section 2.07(b), Insurance Code, to
require the governing  committee of the Texas Workers' Compensation
Insurance Facility to develop an investment policy and submit the policy
to the State Board of Insurance, rather than to the state treasurer, for
review and approval.   

SECTION 4. Amends Article 5.76-3, Section 13(d), Insurance Code, to
require money in the fund to be invested, subject to a policy developed by
the board and approved by the State Board of Insurance, rather than by the
state treasurer, in types of investments authorized by law for an insurer
authorized to write workers' compensation insurance coverage in this
state. 

SECTION 5. Effective date: September 1, 1997.

SECTION 6. Emergency clause.