SRC-DPW C.S.H.B. 1810 76(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 1810
76R13949 EBy: Averitt (Lindsay)
Finance
5/10/1999
Committee Report (Substituted)


DIGEST 

Each legislative session, the comptroller of public accounts (comptroller)
identifies certain functions of the agency that require statutory changes
to update references in the Government Code, clarify statutory intent for
application, update compliance with federal law, codify existing practices,
or simplify the administration of the agency.  This bill would update the
state's rating standards to conform with standard language used in
interstate branch banking and set forth guidelines for the deposit and
investment of funds by the comptroller. 

PURPOSE

As proposed, C.S.H.B. 1810 sets forth guidelines for the deposit and
investment of funds by the comptroller of public accounts. 

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 Section 404.0212(d), Government Code, to prohibit the
comptroller of public accounts (comptroller) from selecting as a depository
a regulated financial institution for which the entire institution, rather
than that, has been assigned a certain rating under 12 U.S.C. Section 2906.
Requires the comptroller to establish criteria to determine whether a
financial institution doing business in this state and other states has a
satisfactory record of meeting community credit needs in this state. 

SECTION 2. Amends Section 404.022, Government Code, to require the
comptroller to mail eligibility conditions to institutions not later than
the first business day in June, rather than on the second Tuesday. Requires
an application for designation as a state depository to include a statement
of the maximum amount of state time deposits, rather than funds, the
applicant will accept, and of the applicant's condition according to the
most recent financial statement.  Deletes text regarding a private bank.
Deletes a provision prohibiting an application from state funds from being
granted if the applicant's liabilities for borrowed money are in excess of
its capital stock.  Deletes a provision authorizing the comptroller to
designate an applicant as a state depository under certain conditions.
Deletes a provision authorizing the comptroller to send notice that further
applications for designation as a state depository will be accepted.  Makes
conforming changes.  

SECTION 3. Amends Section 404.023, Government Code, to require the
comptroller to designate depository banks that have main offices or
branches centrally located in this state to be used for obligations due the
state. 

SECTION 4. Amends Section 404.024, Government Code, by amending Subsection
(g) and adding Subsections (j) and (k), to require the comptroller to give
first consideration to banks that maintain main offices or branch offices
in this state, rather than Texas banks, when investing in direct security
repurchase agreements.  Requires the comptroller to invest funds in a
manner of a prudent person. Authorizes the comptroller to contract with
private professional investment managers to assist the comptroller in
investing funds under the care, custody, and control of the comptroller. 

SECTION 5. Amends Sections 404.031(a) and (f), Government Code, to
authorize the comptroller to deposit state funds with a depository only if
the depository has pledged eligible investment securities not less than an
amount of deposits to be secured.  Authorizes a state depository to deposit
pledged securities  with a federal reserve bank or a federal home loan
bank, rather than the Federal Reserve Bank of Dallas or the Federal Home
Loan Bank of Dallas. 

SECTION 6. Effective date: September 1, 1999.

SECTION 7. Emergency clause.



SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 404.0212(d), Government Code, to require the comptroller to
establish criteria to determine whether a financial institution doing
business in this state and other states has a satisfactory record of
meeting community credit needs in this state.