1-1 AN ACT
1-2 relating to the abolition of unnecessary governmental entities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1. ABOLITION OF UNIFORM STATEWIDE ACCOUNTING
1-5 PROJECT ADVISORY COMMITTEE
1-6 SECTION 1.01. The uniform statewide accounting project
1-7 advisory committee is abolished.
1-8 SECTION 1.02. Section 2101.031(b), Government Code, is
1-9 amended to read as follows:
1-10 (b) The project includes each component of the uniform
1-11 statewide accounting system as designed in accordance with Chapter
1-12 852, Acts of the 70th Legislature, Regular Session, 1987, and as
1-13 defined by Section 1, Chapter 781, Acts of the 71st Legislature,
1-14 Regular Session, 1989, [and as developed or revised by the project
1-15 advisory committee,] including:
1-16 (1) the uniform statewide accounting system (USAS) and
1-17 related subsystems;
1-18 (2) the uniform statewide payroll system (USPS);
1-19 (3) the human resource information system (HRIS);
1-20 (4) the budget execution and monitoring system
1-21 (BEAMS); and
1-22 (5) the statewide telecommunication network system.
1-23 SECTION 1.03. Section 2101.035(d), Government Code, is
1-24 amended to read as follows:
2-1 (d) The comptroller shall ensure that the system encompasses
2-2 each state agency. The comptroller may[, after consulting with the
2-3 project advisory committee,] exclude any state agency from the
2-4 centralized computation function of the statewide payroll component
2-5 of the system.
2-6 SECTION 1.04. Section 2101.038, Government Code, is amended
2-7 to read as follows:
2-8 Sec. 2101.038. DUTIES OF STATE AUDITOR. The state auditor,
2-9 when reviewing the operation of a state agency, shall audit for
2-10 compliance with the uniform statewide accounting system, the
2-11 comptroller's rules, and the Legislative Budget Board's performance
2-12 and workload measures. The state auditor shall notify [the project
2-13 advisory committee,] the comptroller, the governor, and the
2-14 Legislative Budget Board as soon as practicable when a state agency
2-15 is not in compliance.
2-16 SECTION 1.05. Section 2101.039, Government Code, is amended
2-17 to read as follows:
2-18 Sec. 2101.039. CONTRACTS; EXEMPTION. [(a)] Contracts made
2-19 under this subchapter are not subject to:
2-20 (1) Subtitle D [the State Purchasing and General
2-21 Services Act (Article 601b, Vernon's Texas Civil Statutes)];
2-22 (2) Chapter 2254; or
2-23 (3) Chapter 2054.
2-24 [(b) The project director must submit all proposed contracts
2-25 for professional or consulting services and all proposed purchases
2-26 of computer equipment or software to the project advisory committee
2-27 for review and recommendation before procurement.]
3-1 SECTION 1.06. (a) Section 2101.032, Government Code, is
3-2 repealed.
3-3 (b) Section 2101.035(b), Government Code, is repealed.
3-4 ARTICLE 2. ABOLITION OF RUNNELS COUNTY
3-5 WATER AUTHORITY
3-6 SECTION 2.01. The Runnels County Water Authority is
3-7 abolished.
3-8 SECTION 2.02. Chapter 376, Acts of the 54th Legislature,
3-9 Regular Session, 1955 (Article 8280-176, Vernon's Texas Civil
3-10 Statutes), is repealed.
3-11 ARTICLE 3. ABOLITION OF STATE DEPOSITORY BOARD
3-12 SECTION 3.01. The State Depository Board is abolished. All
3-13 powers, duties, rights, and obligations of the board are
3-14 transferred to the comptroller. All records, funds, contracts, or
3-15 other property of the board are transferred to the comptroller.
3-16 SECTION 3.02. Sections 44.007(f)-(i), Agriculture Code, are
3-17 amended to read as follows:
3-18 (f) After reviewing each linked deposit loan application,
3-19 the board shall recommend to the comptroller [state treasurer] the
3-20 acceptance or rejection of the application.
3-21 (g) After acceptance of the application, the comptroller
3-22 [state treasurer] shall place a linked deposit with the applicable
3-23 eligible lending institution for the period the comptroller
3-24 [treasurer] considers appropriate. The comptroller [state
3-25 treasurer] may not place a deposit for a period extending beyond
3-26 the state fiscal biennium in which it is placed. Subject to the
3-27 limitation described by Section 44.010 of this chapter, the
4-1 comptroller [treasurer] may place time deposits at an interest rate
4-2 described by Section 44.001(5)(A) of this chapter[,
4-3 notwithstanding any order of the State Depository Board to the
4-4 contrary].
4-5 (h) Before the placing of a linked deposit, the eligible
4-6 lending institution and the state, represented by the comptroller
4-7 [state treasurer] and the board, shall enter into a written deposit
4-8 agreement containing the conditions on which the linked deposit is
4-9 made.
4-10 (i) If a lending institution holding linked deposits ceases
4-11 to be a state depository, the comptroller [state treasurer] may
4-12 withdraw the linked deposits.
4-13 SECTION 3.03. Section 404.013, Government Code, is amended
4-14 to read as follows:
4-15 Sec. 404.013. RULES. The comptroller [board] may adopt and
4-16 enforce rules governing the establishment and conduct of state
4-17 depositories and the investment of state funds in the depositories
4-18 that the public interest requires and that are not inconsistent
4-19 with the law governing the depositories. [The rules must be entered
4-20 in the minutes of the board.]
4-21 SECTION 3.04. Sections 404.021(a)-(c), Government Code, are
4-22 amended to read as follows:
4-23 (a) Any state or national bank doing business in the state
4-24 may be designated by the comptroller [board] as a state depository.
4-25 Designation of a bank as a depository includes all of the bank's
4-26 branches within the state.
4-27 (b) Any savings and loan association doing business in the
5-1 state may be designated by the comptroller [board] as a state
5-2 depository.
5-3 (c) Any state or federal credit union doing business in the
5-4 state may be designated by the comptroller [board] as a state
5-5 depository.
5-6 SECTION 3.05. Sections 404.0212(b), (d), (e), and (f),
5-7 Government Code, are amended to read as follows:
5-8 (b) A regulated financial institution that accepts a deposit
5-9 from the comptroller [treasurer] shall report to the comptroller
5-10 [treasurer] the rating assigned to the financial institution under
5-11 12 U.S.C. Section 2906.
5-12 (d) The comptroller [board] may not select as a depository a
5-13 regulated financial institution that has been assigned a rating
5-14 below "outstanding record of meeting community credit needs" or
5-15 "satisfactory record of meeting community credit needs" under 12
5-16 U.S.C. Section 2906.
5-17 (e) On receipt of notice that the rating of a financial
5-18 institution is changed to a rating below that required by this
5-19 section, the comptroller [treasurer] shall take immediate action to
5-20 transfer all state funds subject to the custody or control of the
5-21 comptroller [treasurer] that are on deposit with the institution to
5-22 a qualified financial institution.
5-23 (f) The depository contract between a regulated financial
5-24 institution and the comptroller [board] must authorize the
5-25 withdrawal without penalty of the state funds subject to the
5-26 custody or control of the comptroller [treasurer] that are on
5-27 deposit with the institution if the rating of the institution is
6-1 changed to a rating below that required by Subsection (d).
6-2 SECTION 3.06. Section 404.022, Government Code, is amended
6-3 to read as follows:
6-4 Sec. 404.022. APPLICATIONS. (a) [The treasurer is the
6-5 secretary of the board.]
6-6 [(b)] The comptroller [board, through its secretary], on the
6-7 second Tuesday in June of each odd-numbered year, shall mail to
6-8 each eligible institution a letter stating the conditions with
6-9 which applicants for designation as a state depository must comply.
6-10 The comptroller [treasurer] shall keep on file in the comptroller's
6-11 [treasurer's] office and make available for inspection by any
6-12 person a list of institutions to which letters have been sent.
6-13 (b) [(c)] The application for designation as a state
6-14 depository must include a statement:
6-15 (1) of the amount of the applicant's paid capital
6-16 stock and permanent surplus, if any, or if the applicant is a
6-17 private bank, the amount of net proprietorship;
6-18 (2) of the maximum amount of state funds the applicant
6-19 will accept;
6-20 (3) of the applicant's condition on the date the
6-21 application is submitted; and
6-22 (4) that the books and accounts of the institution, if
6-23 it is designated as a state depository, will be open at all times
6-24 for inspection by the comptroller [board] or a [member or
6-25 accredited] representative of the comptroller [board].
6-26 (c) [(d)] An application shall be mailed to the comptroller
6-27 [treasurer] at Austin and must be received before noon of the
7-1 first day of August of the year in which the letter is sent. An
7-2 application received after that time may be considered at the
7-3 option of the comptroller [board]. The comptroller [board] shall
7-4 charge a processing fee of $25 for each application and shall
7-5 deposit the fees to the credit of the general revenue fund.
7-6 (d) [(e)] On receipt of an application under this section,
7-7 the comptroller [treasurer] shall endorse on the application the
7-8 date of its receipt. The comptroller [treasurer] shall prepare a
7-9 list of the names of the applicants and the amount for which each
7-10 has applied [and shall furnish a copy of the list to each board
7-11 member].
7-12 (e) [(f) The board shall meet on the first Monday in August
7-13 of each odd-numbered year and at other appropriate times to
7-14 consider applications.] The comptroller [board] may approve those
7-15 applicants that are acceptable and may reject those whose
7-16 management or condition, in the opinion of the comptroller
7-17 [board], does not warrant the placing of state funds in their
7-18 possession. An application for state funds may not be granted if
7-19 the applicant's liabilities for borrowed money are in excess of its
7-20 capital stock, but the comptroller [board] may in its discretion
7-21 waive this provision.
7-22 (f) [(g)] The comptroller [board] may designate an applicant
7-23 as a state depository if the applicant has complied with all of
7-24 the conditions set by the comptroller [board]. The designation as
7-25 a state depository is effective for a period of not more than two
7-26 years.
7-27 (g) [(h)] As soon as practicable after the comptroller
8-1 [board] has made its designations, the comptroller [treasurer]
8-2 shall inform all applicants whether they have been designated as
8-3 state depositories.
8-4 (h) [(i)] If more depositories are required at any time, the
8-5 comptroller [treasurer] may send to all eligible institutions
8-6 notice that further applications for designation as a state
8-7 depository for the unexpired term will be accepted.
8-8 (i) [(j)] The comptroller [board] may execute a simplified
8-9 version of a depository agreement with an eligible institution
8-10 desiring to hold $98,000 or less in state deposits that are fully
8-11 insured by the Federal Deposit Insurance Corporation or the
8-12 National Credit Union Share Insurance Fund. [The treasurer may give
8-13 the institution contingent approval as a depository until the
8-14 board's next scheduled meeting.]
8-15 SECTION 3.07. Section 404.023, Government Code, is amended
8-16 to read as follows:
8-17 Sec. 404.023. DESIGNATION. The comptroller [board] shall
8-18 designate one or more state depository banks in centrally located
8-19 cities to be used for clearing checks and other obligations due the
8-20 state.
8-21 SECTION 3.08. Sections 404.024(a), (b), (d), and (f)-(i),
8-22 Government Code, are amended to read as follows:
8-23 (a) The comptroller [board] may determine and designate the
8-24 amount of state funds to be deposited in time deposits in state
8-25 depositories. [The treasurer shall recommend to the board a
8-26 maximum limit for state funds deposited by the treasurer at
8-27 approved state depositories.] The percentage of state funds to be
9-1 deposited in state depositories shall be based on the interest
9-2 rates available in competing investments, the demand for funds from
9-3 Texas banks, and the state's liquidity requirements. [The
9-4 treasurer shall provide periodic investment reports to the board.]
9-5 (b) State funds not deposited in state depositories shall be
9-6 invested by the comptroller [treasurer] in:
9-7 (1) direct security repurchase agreements;
9-8 (2) reverse security repurchase agreements;
9-9 (3) direct obligations of or obligations the principal
9-10 and interest of which are guaranteed by the United States;
9-11 (4) direct obligations of or obligations guaranteed by
9-12 agencies or instrumentalities of the United States government;
9-13 (5) bankers' acceptances that:
9-14 (A) are eligible for purchase by the Federal
9-15 Reserve System;
9-16 (B) do not exceed 270 days to maturity; and
9-17 (C) are issued by a bank that has received the
9-18 highest short-term credit rating by a nationally recognized
9-19 investment rating firm;
9-20 (6) commercial paper that:
9-21 (A) does not exceed 270 days to maturity; and
9-22 (B) except as provided by Subsection (i), has
9-23 received the highest short-term credit rating by a nationally
9-24 recognized investment rating firm;
9-25 (7) contracts written by the treasury in which the
9-26 treasury grants the purchaser the right to purchase securities in
9-27 the treasury's marketable securities portfolio at a specified price
10-1 over a specified period and for which the treasury is paid a fee
10-2 and specifically prohibits naked-option or uncovered option
10-3 trading;
10-4 (8) direct obligations of or obligations guaranteed by
10-5 the Inter-American Development Bank, the International Bank for
10-6 Reconstruction and Development (the World Bank), the African
10-7 Development Bank, the Asian Development Bank, and the International
10-8 Finance Corporation that have received the highest credit rating by
10-9 a nationally recognized investment rating firm;
10-10 (9) bonds issued, assumed, or guaranteed by the State
10-11 of Israel;
10-12 (10) obligations of a state or an agency, county,
10-13 city, or other political subdivision of a state; and
10-14 (11) mutual funds secured by obligations that are
10-15 described by Subdivisions (1) through (6).
10-16 (d) The comptroller [board] may contract with a depository
10-17 for the payment of interest on time or demand deposits at a rate
10-18 not to exceed a rate that is lawful under an Act of Congress and
10-19 rules and regulations of the board of governors of the Federal
10-20 Reserve System, the board of directors of the Federal Deposit
10-21 Insurance Corporation, the National Credit Union Administration
10-22 Board, and the Federal Home Loan Banking Board.
10-23 (f) The comptroller [treasurer] by rule may define
10-24 derivative investments other than those described by Subsection
10-25 (e). The treasury may not purchase investments defined by rule
10-26 adopted under this subsection in an amount that at the time of
10-27 purchase will cause the aggregate value of the investments to
11-1 exceed five percent of the treasury's total investments.
11-2 (g) To the extent practicable, the comptroller [treasurer]
11-3 shall give first consideration to Texas banks when investing in
11-4 direct security repurchase agreements.
11-5 (h) The comptroller [treasurer] may not use state funds to
11-6 invest in or purchase obligations of a private corporation or other
11-7 private business entity doing business in Northern Ireland unless
11-8 the corporation or other entity:
11-9 (1) adheres to fair employment practices; and
11-10 (2) does not discriminate on the basis of race, color,
11-11 religion, sex, national origin, or disability.
11-12 (i) Notwithstanding Subsection (b)(6)(B), the comptroller
11-13 [treasurer] may purchase commercial paper with a rating lower than
11-14 the rating required by that paragraph to provide liquidity for
11-15 commercial paper issued by the comptroller [treasurer] or an agency
11-16 of the state.
11-17 SECTION 3.09. Sections 404.0245(b)-(d), Government Code, are
11-18 amended to read as follows:
11-19 (b) Subject to the limitations of Subsection (c), the
11-20 comptroller [board] may determine and designate the amount of state
11-21 funds that shall be invested by the comptroller [treasurer] in
11-22 hedging transactions in crude oil and natural gas futures contracts
11-23 and options on crude oil and natural gas futures contracts that are
11-24 traded on an established exchange regulated by the Securities and
11-25 Exchange Commission or the Commodity Futures Trading Commission.
11-26 (c) The principal amount of state funds invested and
11-27 outstanding in hedging transactions on any one day may not exceed
12-1 $500,000 with a maximum risk of loss of $5,000,000 in a biennium.
12-2 The total principal amount of state funds that may be invested by
12-3 the comptroller [treasurer] in hedging transactions during any one
12-4 biennium may not exceed the amount of money credited to the
12-5 unclaimed money fund for that biennium and attributable to the
12-6 remittance of mineral proceeds under Chapter 75, Property Code.
12-7 Any premium incurred in connection with hedging transactions may be
12-8 paid only from funds appropriated for that purpose.
12-9 (d) The comptroller [board by rule] shall invest [regulate
12-10 the investment of] state funds in crude oil and natural gas
12-11 futures contracts or options on crude oil and natural gas futures
12-12 contracts under the[. The rules shall provide] restrictions and
12-13 procedures for making [the] investments that persons of ordinary
12-14 prudence, discretion, and intelligence, exercising the judgment and
12-15 care under the circumstances then prevailing, would follow in the
12-16 management of their own affairs, not in regard to speculation but
12-17 in regard to the permanent disposition of their funds, considering
12-18 the probable income as well as the probable safety of their
12-19 capital. The investments may be made only for hedging purposes.
12-20 SECTION 3.10. Section 404.026, Government Code, is amended
12-21 to read as follows:
12-22 Sec. 404.026. ELEEMOSYNARY FUNDS. The comptroller [board]
12-23 may invest the permanent funds of the Texas School for the Blind
12-24 and Visually Impaired, Texas School for the Deaf, Austin State
12-25 Hospital, and Corsicana State Home and may invest other permanent
12-26 funds, the investment of which is not otherwise provided for, that
12-27 have $1,000 or more on deposit with the comptroller [treasurer]
13-1 that are not invested. The comptroller [board] shall invest the
13-2 funds in the same classes of bonds as are authorized for
13-3 investment of the permanent school fund.
13-4 SECTION 3.11. Section 404.032, Government Code, is amended
13-5 to read as follows:
13-6 Sec. 404.032. DEPOSITS. (a) The comptroller [treasurer]
13-7 shall deposit state funds in depositories that satisfy the
13-8 collateral requirements of this chapter. The comptroller
13-9 [treasurer] may deposit funds designated as demand deposits only in
13-10 institutions designated as depositories by the comptroller [board].
13-11 (b) The comptroller [treasurer] shall monitor the financial
13-12 stability of state depositories in which state deposits are held
13-13 and take appropriate action to protect state funds.
13-14 (c) A state depository shall collect all checks, drafts, and
13-15 demands for money deposited with it by the comptroller [treasurer].
13-16 If the depository uses due diligence, it is not liable for the
13-17 collections until the proceeds of the collections are duly received
13-18 by the depository bank. An expense incurred in collection that the
13-19 depository is not permitted to pay by reason of an Act of Congress
13-20 or a rule or regulation adopted under such an Act by the board of
13-21 governors of the Federal Reserve System or the board of directors
13-22 of the Federal Deposit Insurance Corporation shall be charged to
13-23 and paid by the comptroller [treasurer] out of money appropriated
13-24 by the legislature for that purpose.
13-25 (d) The comptroller [treasurer] shall keep sufficient money
13-26 on deposit in demand deposit accounts in depositories designated by
13-27 the comptroller [board] as clearing institutions to meet all
14-1 current claims on the state. Items received by the comptroller
14-2 [treasurer] for collection shall be deposited with a clearing
14-3 institution to be credited to the demand deposit account in the
14-4 depository. Checks, drafts, or warrants drawn by the comptroller
14-5 [treasurer] for the payment of obligations due by the state may be
14-6 drawn on such an account in such a depository or on the demand
14-7 deposit account in another state depository so that the checks,
14-8 drafts, or warrants of the state may at all times pass current as
14-9 cash.
14-10 SECTION 3.12. Section 404.033, Government Code, is amended
14-11 to read as follows:
14-12 Sec. 404.033. WITHDRAWALS AND REMITTANCES. (a) Funds on
14-13 deposit with a depository are subject to withdrawal at any time by
14-14 the comptroller [treasurer], except funds designated as time
14-15 deposits, which may be withdrawn in the manner agreed on in the
14-16 contract under which the funds were deposited. The depository
14-17 shall remit the withdrawal on demand and free of charge, except
14-18 charges that the depository is not permitted to pay by reason of an
14-19 Act of Congress or a rule or regulation adopted under such an Act
14-20 by the board of governors of the Federal Reserve System or the
14-21 board of directors of the Federal Deposit Insurance Corporation.
14-22 (b) A remittance to the comptroller [treasurer] by a state
14-23 depository or another person may be made by any method authorized
14-24 by the comptroller [treasurer], including cash, money order, or
14-25 bank draft. The liability of the depository or other person making
14-26 the remittance continues until the money is received by the
14-27 comptroller [treasurer]. A depository that refuses to make a
15-1 remittance required by this chapter forfeits its right to receive
15-2 further deposits, on order of the comptroller [board]. The
15-3 comptroller [board] may withdraw all funds from the depository,
15-4 which after the withdrawal ceases to be a state depository.
15-5 SECTION 3.13. Sections 481.193(f)-(i), Government Code, are
15-6 amended to read as follows:
15-7 (f) After reviewing each linked deposit loan application,
15-8 the executive director of the department shall recommend to the
15-9 comptroller [state treasurer] the acceptance or rejection of the
15-10 application.
15-11 (g) After the comptroller's [state treasurer's] acceptance
15-12 of the application and the lending institution originates a loan to
15-13 an eligible borrower, the comptroller [state treasurer] shall place
15-14 a linked deposit with the applicable eligible lending institution
15-15 for the period the comptroller [treasurer] considers appropriate.
15-16 The comptroller [state treasurer] may not place a deposit for a
15-17 period extending beyond the state fiscal biennium in which it is
15-18 placed. Subject to the limitation described by Section 481.197,
15-19 the comptroller [treasurer] may place time deposits at an interest
15-20 rate described by Section 481.192[, notwithstanding any order of
15-21 the State Depository Board to the contrary].
15-22 (h) Before the placing of a linked deposit, the eligible
15-23 lending institution and the state, represented by the comptroller
15-24 [state treasurer] and the department, shall enter into a written
15-25 deposit agreement containing the conditions on which the linked
15-26 deposit is made. The deposit agreement must provide that:
15-27 (1) the lending institution notify the comptroller
16-1 [state treasurer] if the borrower to which the deposit is linked
16-2 defaults on the loan; and
16-3 (2) in the event of a default the comptroller [state
16-4 treasurer] may withdraw the linked deposit.
16-5 (i) If a lending institution holding linked deposits ceases
16-6 to be a state depository, the comptroller [state treasurer] may
16-7 withdraw the linked deposits.
16-8 SECTION 3.14. Section 845.103(b), Government Code, is
16-9 amended to read as follows:
16-10 (b) In handling the funds of the retirement system, the
16-11 board of trustees has all powers and duties granted to the
16-12 comptroller that formerly were granted to the State Depository
16-13 Board.
16-14 SECTION 3.15. Section 855.103(b), Government Code, is
16-15 amended to read as follows:
16-16 (b) In handling the funds of the retirement system, the
16-17 board of trustees has all powers and duties granted to the
16-18 comptroller that formerly were granted to the State Depository
16-19 Board.
16-20 SECTION 3.16. Section 2257.025(b), Government Code, is
16-21 amended to read as follows:
16-22 (b) The comptroller [board] or the public entity may examine
16-23 and verify at any reasonable time a pledged investment security or
16-24 a record a depository maintains under this section.
16-25 SECTION 3.17. Section 2257.041(d), Government Code, is
16-26 amended to read as follows:
16-27 (d) A custodian must be approved by the public entity and
17-1 be:
17-2 (1) a state or national bank that:
17-3 (A) is designated by the comptroller [board] as
17-4 a state depository;
17-5 (B) is domiciled in this state; and
17-6 (C) has a capital stock and permanent surplus of
17-7 $5 million or more;
17-8 (2) the Texas Treasury Safekeeping Trust Company;
17-9 (3) a Federal Reserve Bank or a branch of a Federal
17-10 Reserve Bank; or
17-11 (4) a federal home loan bank.
17-12 SECTION 3.18. Sections 2257.046(b) and (c), Government Code,
17-13 are amended to read as follows:
17-14 (b) The comptroller [board] or the public entity may examine
17-15 and verify at any reasonable time a pledged investment security or
17-16 a record a custodian maintains under this section. The public
17-17 entity or its agent may inspect at any time an investment security
17-18 evidenced by a trust receipt.
17-19 (c) The public entity's custodian shall file a collateral
17-20 report with the comptroller [board] in the manner and on the dates
17-21 prescribed by the comptroller [board].
17-22 SECTION 3.19. Sections 2257.061, 2257.062, 2257.063, and
17-23 2257.064, Government Code, are amended to read as follows:
17-24 Sec. 2257.061. AUDITS AND EXAMINATIONS. As part of an audit
17-25 or regulatory examination of a public entity's depository or
17-26 custodian, the auditor or examiner shall:
17-27 (1) examine and verify pledged investment securities
18-1 and records maintained under Section 2257.025 or 2257.046; and
18-2 (2) report any significant or material noncompliance
18-3 with this chapter to the comptroller [board].
18-4 Sec. 2257.062. PENALTIES. (a) The comptroller [board] may
18-5 revoke a depository's designation as a state depository for one
18-6 year if, after notice and a hearing, the comptroller [board] makes
18-7 a written finding that the depository, while acting as either a
18-8 depository or a custodian:
18-9 (1) did not maintain reasonable compliance with this
18-10 chapter; and
18-11 (2) failed to remedy a violation of this chapter
18-12 within a reasonable time after receiving written notice of the
18-13 violation.
18-14 (b) The comptroller [board] may permanently revoke a
18-15 depository's designation as a state depository if the comptroller
18-16 [board] makes a written finding that the depository:
18-17 (1) has not maintained reasonable compliance with this
18-18 chapter; and
18-19 (2) has acted in bad faith by not remedying a
18-20 violation of this chapter.
18-21 Sec. 2257.063. MITIGATING CIRCUMSTANCES. (a) The
18-22 comptroller [board] shall consider the total circumstances relating
18-23 to the performance of a depository or custodian when the
18-24 comptroller [board] makes a finding required by Section 2257.062,
18-25 including the extent to which the noncompliance is minor, isolated,
18-26 temporary, or nonrecurrent.
18-27 (b) The comptroller [board] may not find that a depository
19-1 or custodian did not maintain reasonable compliance with this
19-2 chapter if the noncompliance results from the public entity's
19-3 failure to comply with Section 2257.026.
19-4 (c) This section does not relieve a depository or custodian
19-5 of the obligation to secure a deposit of public funds with eligible
19-6 security in the amount and manner required by this chapter within a
19-7 reasonable time after the public entity deposits the deposit of
19-8 public funds with the depository.
19-9 Sec. 2257.064. REINSTATEMENT. The comptroller [board] may
19-10 reinstate a depository's designation as a state depository if:
19-11 (1) the comptroller [board] determines that the
19-12 depository has remedied all violations of this chapter; and
19-13 (2) the depository assures the comptroller [board] to
19-14 the comptroller's [board's] satisfaction that the depository will
19-15 maintain reasonable compliance with this chapter.
19-16 SECTION 3.20. Section 154.051, Tax Code, is amended to read
19-17 as follows:
19-18 Sec. 154.051. CIGARETTE TAX RECOVERY TRUST FUND. (a) The
19-19 cigarette tax recovery trust fund is a private trust fund
19-20 established outside the state treasury and as provided by this
19-21 section secures the payment of cigarette taxes by distributors who
19-22 contribute to the fund. The fund is composed of the total amount
19-23 in the separate accounts maintained in trust for all contributing
19-24 distributors as provided by this section. The assets of the fund,
19-25 including interest earned by those assets, are to be held in trust
19-26 for the benefit and protection of the state treasury, and may not
19-27 be diverted, distributed, or appropriated for any purpose other
20-1 than as provided by this section. Interest earned by a
20-2 distributor's account but not yet refunded to the distributor
20-3 pursuant to Subsection (d) shall, on a monthly basis, be paid to
20-4 the comptroller [treasurer] as provided by Subsection (b) or
20-5 credited to the distributor's account.
20-6 (b) The comptroller [treasurer] is the trustee of the fund
20-7 as provided by Section 404.073, Government Code, and shall manage
20-8 the fund as provided by this section. In investing the assets of
20-9 the fund, the comptroller [treasurer] has the obligations, duties,
20-10 and powers provided for the investment of state funds by Sections
20-11 404.021 through 404.025, Government Code[, and by the orders of the
20-12 State Depository Board]. The comptroller [treasurer] shall receive
20-13 five percent of the interest earned on all assets of the fund as
20-14 compensation for serving as trustee of the fund.
20-15 (c) A distributor who orders stamps or requests a meter
20-16 setting from the comptroller [state treasurer] under this chapter
20-17 without advance payment shall contribute to an account maintained
20-18 in the distributor's name in the fund money in the amount of each
20-19 discount to which the distributor is entitled under Section 154.052
20-20 of this code. When the money in the distributor's account equals
20-21 20 percent of the designated amount of stamps and meter setting
20-22 requested by the distributor and approved by the comptroller
20-23 [treasurer] to be purchased in any one month, the distributor's
20-24 interest in the fund becomes vested.
20-25 (d) Except as provided by Subsection (g) of this section, on
20-26 the last day of each quarter after the quarter in which a
20-27 distributor's interest in the fund becomes vested, the comptroller
21-1 [treasurer] shall refund to the distributor all money contributed
21-2 to the fund by the distributor under Subsection (c) of this section
21-3 in the earliest preceding quarter for which a refund has not been
21-4 paid, plus interest earned on that amount, as long as the
21-5 distributor's interest in the fund remains vested.
21-6 (e) Until a distributor who orders stamps or requests a
21-7 meter setting without advance payment acquires a vested interest in
21-8 the fund, the comptroller [treasurer] may require the distributor
21-9 to post with the comptroller [treasurer] an irrevocable letter of
21-10 credit drawn in the form and amount specified by the comptroller
21-11 [treasurer] to secure the payment of cigarette taxes by that
21-12 distributor. The comptroller [treasurer] may not ship stamps to or
21-13 set a meter for a distributor not having a vested interest in the
21-14 fund without advance payment until the distributor posts the
21-15 required letter of credit.
21-16 (f) In addition to any other requirement under this section,
21-17 the comptroller [treasurer] as a condition for shipping stamps or
21-18 setting a meter without advance payment may:
21-19 (1) require a fiscal-year-end financial statement,
21-20 including a balance sheet and income statement verifiable as to its
21-21 accuracy or other financial information acceptable to the
21-22 comptroller [treasurer] and verifiable as to its accuracy;
21-23 (2) require indemnification from each officer,
21-24 director, and stockholder owning 10 percent or more of outstanding
21-25 stock, if the distributor is a corporation, from each partner, if
21-26 the distributor is a partnership, from each member or owner of a
21-27 joint venture or syndication, and from the owner of a sole
22-1 proprietorship;
22-2 (3) require the distributor to obtain and provide the
22-3 comptroller [treasurer] with a credit report from a credit
22-4 reporting agency acceptable to the comptroller [treasurer];
22-5 (4) require a distributor to increase the balance in
22-6 its account in the fund;
22-7 (5) require a distributor to post a letter of credit;
22-8 (6) reduce a distributor's credit time or amount; or
22-9 (7) take any other reasonable and necessary action to
22-10 protect the state treasury from loss due to the nonpayment of
22-11 cigarette taxes.
22-12 (g) If a distributor who has an account in the fund fails to
22-13 pay in full a tax imposed by this chapter by the due date, the
22-14 comptroller [treasurer], without prior notice to the distributor or
22-15 any other preliminary procedure, may seize any unaffixed stamps and
22-16 any stamped cigarette packages, up to and including the full amount
22-17 of unpaid tax. If the proceeds from the seizure do not satisfy the
22-18 total tax deficiency or the comptroller [treasurer] does not seize
22-19 any unaffixed stamps or stamped cigarette packages, the comptroller
22-20 [treasurer] may withdraw immediately from the fund an amount equal
22-21 to the amount of unpaid taxes due. The comptroller [treasurer]
22-22 shall first withdraw the amount from the account of the defaulting
22-23 distributor. The comptroller [treasurer] shall use the
22-24 comptroller's [treasurer's] best efforts to collect the tax due
22-25 from the defaulting distributor before withdrawing money from the
22-26 other accounts in the fund to satisfy the tax liability. If that
22-27 distributor's account does not contain sufficient money to satisfy
23-1 the tax liability in full, the comptroller [treasurer] shall
23-2 withdraw the additional amount necessary to satisfy that liability
23-3 from the other accounts in the fund in proportion to the balance of
23-4 each account, except that the withdrawal from any other
23-5 distributor's account in the fund is limited to an amount not
23-6 greater than 50 percent of the designated amount of stamps and
23-7 meter settings requested by the distributor under Subsection (c) or
23-8 of the amount required by the comptroller [treasurer] under
23-9 Subsection (f)(4). Not later than the fifth day after the date of
23-10 a withdrawal, the comptroller [treasurer] shall notify each
23-11 distributor of the withdrawal from its account and the amount
23-12 withdrawn. If as a result of a withdrawal made under this
23-13 subsection a distributor's balance in its account is reduced to an
23-14 amount less than the minimum required under this section, the
23-15 distributor's interest in the fund is no longer vested, and the
23-16 comptroller [treasurer] may discontinue refunds to the distributor
23-17 under Subsection (d) until the distributor again acquires a vested
23-18 interest in the fund. The comptroller [treasurer] may require a
23-19 distributor whose interest in the fund is no longer vested to post
23-20 an irrevocable letter of credit with the comptroller [treasurer] to
23-21 secure the payment of cigarette taxes by the distributor. To
23-22 protect the fund, each distributor having an account in the fund
23-23 must indemnify the fund against any amount withdrawn from the fund
23-24 under this subsection because of the failure of the distributor to
23-25 pay in full a tax imposed by this chapter by the due date.
23-26 (h) If distributor accounts, other than a defaulting
23-27 distributor account, are drawn pursuant to Subsection (g) of this
24-1 section, each affected, nondefaulting distributor shall have a
24-2 claim against the defaulting distributor for the amount so drawn.
24-3 The comptroller [treasurer] is hereby appointed trustee, agent, and
24-4 assignee of each affected, nondefaulting distributor for purposes
24-5 of seeking recovery of the amount so drawn. The comptroller
24-6 [treasurer] shall have the sole judgment and discretion in deciding
24-7 whether or not to pursue such a claim and shall have discretion to
24-8 handle any such claim on any basis that in the opinion of the
24-9 comptroller [treasurer] is in the best interest of the fund. The
24-10 comptroller [treasurer] is released from any liability related to
24-11 the handling of the claims described in this section except for
24-12 intentional or wilful misconduct.
24-13 (i) A distributor or person authorized to act on behalf of a
24-14 distributor may notify the comptroller [treasurer] in writing that
24-15 the distributor no longer desires to have stamps shipped or a meter
24-16 set without advance payment, and may request that the money in the
24-17 distributor's account in the fund be paid to the distributor or the
24-18 distributor's heirs or assigns. The comptroller [treasurer] shall
24-19 pay the money in the distributor's account as requested at the end
24-20 of the next quarter after all outstanding taxes owed to the state
24-21 by the distributor have been paid.
24-22 (j) Under no circumstances shall the comptroller [treasurer]
24-23 return to any distributor an amount greater than the balance in the
24-24 distributor's account within the cigarette tax recovery trust fund
24-25 less any sums drawn pursuant to Subsection (g) of this section.
24-26 The State of Texas' liability to any distributor pursuant to this
24-27 section is expressly limited to the sums on deposit in the
25-1 distributor's account at the time the request for return of funds
25-2 is made.
25-3 (k) The comptroller [treasurer] may adopt and enforce rules
25-4 necessary to carry out this section.
25-5 (l) For purposes of this section, "quarter" refers to a
25-6 quarter of the state's fiscal year.
25-7 (m) Information provided under Subsection (f) is
25-8 confidential and not subject to Chapter 552, Government Code.
25-9 (n) The comptroller [treasurer] shall regularly distribute
25-10 financial information regarding the performance of the fund to
25-11 participating distributors on a regular basis. On the written
25-12 request of a participating distributor, the comptroller [treasurer]
25-13 shall provide the distributor with the name and address of each
25-14 distributor participating in the fund, the percentage of the total
25-15 fund represented by each distributor's account, and the total
25-16 amount of money in the fund.
25-17 (o) In lieu of participation in the cigarette tax recovery
25-18 trust fund to secure payment for stamps or meter settings and in
25-19 lieu of advance payment for stamps or meter settings, a distributor
25-20 may pledge to the comptroller [treasurer] sufficient collateral to
25-21 secure payment for stamps or meter settings. Such pledge shall be
25-22 evidenced by a pledge agreement in a form promulgated by the
25-23 comptroller [treasurer], and such collateral shall consist of
25-24 certificates of deposit, treasury notes, treasury bills, or other
25-25 similar types of collateral acceptable to the comptroller
25-26 [treasurer] and held in a separate trust fund established in the
25-27 Texas Treasury Safekeeping Trust Company. All interest earned on
26-1 such collateral shall belong to the distributor. The comptroller
26-2 [treasurer] may require the pledge of additional collateral in the
26-3 event the comptroller [treasurer] determines that the fair market
26-4 value of the pledged collateral is less than the amount due the
26-5 comptroller [treasurer] for stamps or meter settings. On the
26-6 written request of the distributor, the comptroller [treasurer]
26-7 shall release collateral from the pledge agreement or allow the
26-8 substitution of collateral subject to the pledge agreement if after
26-9 such release or substitution the fair market value of the
26-10 collateral subject to the pledge will be equal to or greater than
26-11 the amount due the comptroller [treasurer] for stamps or meter
26-12 settings. If a distributor fails to pay tax in full when due, the
26-13 comptroller [treasurer] may, if the distributor does not pay such
26-14 past due tax and any penalty related thereto within three days
26-15 after receipt of written notice of such failure from the
26-16 comptroller [treasurer], sell or dispose of the collateral and
26-17 apply the proceeds to the payment of taxes, interest, penalties,
26-18 and costs due to the comptroller [treasurer] by the distributor,
26-19 with any remaining proceeds being refunded to the distributor.
26-20 SECTION 3.21. Section 20.002(2), Water Code, is amended to
26-21 read as follows:
26-22 (2) "Authorized investments" means:
26-23 (A) direct obligations of or obligations the
26-24 principal of and interest on which are guaranteed by the United
26-25 States;
26-26 (B) direct obligations of or participation
26-27 certificates guaranteed by the Federal Intermediate Credit Bank,
27-1 Federal Land Banks, Federal National Mortgage Association, Federal
27-2 Home Loan Banks, and Banks for Cooperatives;
27-3 (C) direct obligations of or obligations the
27-4 principal of and interest on which are guaranteed by the State of
27-5 Texas;
27-6 (D) bonds of cities, counties, and other
27-7 political subdivisions of this state, other than bonds issued by a
27-8 political subdivision to finance a project covered by this chapter;
27-9 (E) certificates of deposit of state and
27-10 national banks that satisfy the requirements of Section 2.015,
27-11 Chapter 240, Acts of the 69th Legislature, Regular Session, 1985
27-12 (Article 4393-1, Vernon's Texas Civil Statutes), and the rules of
27-13 the comptroller [State Depository Board] and if the authority or a
27-14 financial institution acting solely as agent for the authority
27-15 possesses the collateral securing those deposits; and
27-16 (F) direct security repurchase agreements made
27-17 only with state or national banks domiciled in the state under
27-18 which the authority buys, holds in its possession or the possession
27-19 of a financial institution acting solely as agent for the authority
27-20 for a specified time, and then sells back any of the following
27-21 securities, obligations, or participation certificates:
27-22 (i) United States government securities;
27-23 (ii) direct obligations of or obligations
27-24 the principal of and interest on which are guaranteed by the United
27-25 States; and
27-26 (iii) direct obligations of or
27-27 participation certificates guaranteed by the Federal Intermediate
28-1 Credit Bank, Federal Land Banks, Federal National Mortgage
28-2 Association, Federal Home Loan Banks, and Banks for Cooperatives.
28-3 SECTION 3.22. The following laws are repealed:
28-4 (1) Sections 404.011 and 404.012, Government Code;
28-5 (2) Section 404.001(1), Government Code;
28-6 (3) Section 404.031(k), Government Code; and
28-7 (4) Section 2257.002(2), Government Code.
28-8 ARTICLE 4. ABOLITION OF EGG MARKETING ADVISORY BOARD
28-9 SECTION 4.01. The Egg Marketing Advisory Board is abolished.
28-10 SECTION 4.02. Section 132.007, Agriculture Code, is
28-11 repealed.
28-12 ARTICLE 5. ABOLITION OF ELECTRONIC DATA BASE ADVISORY COMMITTEE
28-13 SECTION 5.01. The electronic data base advisory committee is
28-14 abolished.
28-15 SECTION 5.02. Section 481.060, Government Code, is amended
28-16 to read as follows:
28-17 Sec. 481.060. ELECTRONIC DATA BASE. (a) In cooperation
28-18 with other state agencies, the international trade division of the
28-19 department shall develop an electronic data base to compile
28-20 international trade information, including information on economic,
28-21 educational, and other opportunities in the public and private
28-22 sectors. The division shall connect that data base with
28-23 appropriate state, federal, and international communication
28-24 networks.
28-25 (b) [The electronic data base advisory committee is composed
28-26 of:]
28-27 [(1) a representative from the center for border
29-1 economic and enterprise development at The University of Texas at
29-2 El Paso, appointed by the president of the university;]
29-3 [(2) a representative from the University of North
29-4 Texas Institute for Regional Industrialization and Manufacturing
29-5 Technology, appointed by the president of the university;]
29-6 [(3) a representative from the Bureau of Business
29-7 Research at The University of Texas at Austin, appointed by the
29-8 president of the university;]
29-9 [(4) a representative from the Texas Agriculture
29-10 Market and Research Center, appointed by the president of Texas A&M
29-11 University;]
29-12 [(5) a representative from The University of Texas at
29-13 San Antonio, College of Business, division of management and
29-14 marketing, appointed by the president of the university;]
29-15 [(6) a representative from The University of Texas-Pan
29-16 American, appointed by the president of the university;]
29-17 [(7) a representative from Texas A&M International
29-18 University, appointed by the president of the university;]
29-19 [(8) a representative from Texas Tech University,
29-20 appointed by the president of the university;]
29-21 [(9) a representative from the University of Houston,
29-22 appointed by the president of the university;]
29-23 [(10) a representative from Lamar University,
29-24 appointed by the president of the university;]
29-25 [(11) a representative from Sul Ross State University,
29-26 appointed by the president of the university; and]
29-27 [(12) persons appointed by the governor or the
30-1 executive director of the department.]
30-2 [(c) If a member of the advisory committee who represents a
30-3 university ceases to be employed by the university, the member's
30-4 position on the advisory committee becomes vacant on the day
30-5 employment ceases. A vacancy shall be filled by the president of
30-6 the university that the member represents.]
30-7 [(d) The advisory committee shall recommend to the
30-8 department procedures for the dissemination of the data base.]
30-9 [(e)] The department may accept gifts, grants, and donations
30-10 from any source for the operation of the data base.
30-11 ARTICLE 6. ABOLITION OF ENERGY ADVISORY COMMITTEE
30-12 SECTION 6.01. The energy advisory committee is abolished.
30-13 SECTION 6.02. Section 761.006, Government Code, is repealed.
30-14 ARTICLE 7. ABOLITION OF RIO GRANDE VALLEY
30-15 MUNICIPAL WATER AUTHORITY
30-16 SECTION 7.01. The Rio Grande Valley Municipal Water
30-17 Authority is abolished.
30-18 SECTION 7.02. Chapter 623, Acts of the 61st Legislature,
30-19 Regular Session, 1969 (Article 8280-455, Vernon's Texas Civil
30-20 Statutes), is repealed.
30-21 ARTICLE 8. ABOLITION OF RIO GRANDE VALLEY
30-22 POLLUTION CONTROL AUTHORITY
30-23 SECTION 8.01. The Rio Grande Valley Pollution Control
30-24 Authority is abolished.
30-25 SECTION 8.02. Chapter 648, Acts of the 60th Legislature,
30-26 Regular Session, 1967 (Article 8280-389, Vernon's Texas Civil
30-27 Statutes), is repealed.
31-1 ARTICLE 9. TRANSITION; EFFECTIVE DATE; EMERGENCY
31-2 SECTION 9.01. (a) If an entity that is abolished by this
31-3 Act has property, records, or other assets and the article of this
31-4 Act that abolishes the entity does not provide for their
31-5 disposition, the General Services Commission shall take custody of
31-6 the property, records, or other assets of the entity unless the
31-7 governor designates another appropriate governmental entity to take
31-8 custody of the property, records, or other assets.
31-9 (b) If an entity that is abolished by this Act has a
31-10 continuing valid and enforceable obligation, including bonded
31-11 indebtedness, Section 325.017(f), Government Code, applies in
31-12 relation to the continuing obligation of the abolished entity. If
31-13 the abolished entity is not a state agency, the governor may
31-14 designate an appropriate state agency or another appropriate
31-15 governmental entity created under the laws of this state to perform
31-16 the functions assigned under Section 325.017(f), Government Code.
31-17 SECTION 9.02. This Act takes effect September 1, 1997.
31-18 SECTION 9.03. The importance of this legislation and the
31-19 crowded condition of the calendars in both houses create an
31-20 emergency and an imperative public necessity that the
31-21 constitutional rule requiring bills to be read on three several
31-22 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2380 was passed by the House on May
16, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 2380 on May 24, 1997, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2380 was passed by the Senate, with
amendments, on May 21, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor