By Averitt H.B. No. 1810
76R9904 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the deposit and investment of funds by the comptroller
1-3 of public accounts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 404.0212(d), Government Code, is amended
1-6 to read as follows:
1-7 (d) The comptroller may not select as a depository a
1-8 regulated financial institution for which the entire institution
1-9 [that] has been assigned a rating below "outstanding record of
1-10 meeting community credit needs" or "satisfactory record of meeting
1-11 community credit needs" under 12 U.S.C. Section 2906.
1-12 SECTION 2. Section 404.022, Government Code, is amended to
1-13 read as follows:
1-14 Sec. 404.022. APPLICATIONS. (a) The comptroller, not later
1-15 than the first business day [on the second Tuesday] in June of each
1-16 odd-numbered year, shall mail to each eligible institution a letter
1-17 stating the conditions with which applicants for designation as a
1-18 state depository must comply. The comptroller shall keep on file
1-19 in the comptroller's office and make available for inspection by
1-20 any person a list of institutions to which letters have been sent.
1-21 (b) The application for designation as a state depository
1-22 must include a statement:
1-23 (1) of the amount of the applicant's paid capital
1-24 stock and permanent surplus, if any[, or if the applicant is a
2-1 private bank, the amount of net proprietorship];
2-2 (2) of the maximum amount of state time deposits
2-3 [funds] the applicant will accept;
2-4 (3) of the applicant's condition according to the most
2-5 recent financial statement on the date the application is
2-6 submitted; and
2-7 (4) that the books and accounts of the institution, if
2-8 it is designated as a state depository, will be open at all times
2-9 for inspection by the comptroller or a representative of the
2-10 comptroller.
2-11 (c) An application shall be mailed to the comptroller at
2-12 Austin and must be received before noon on [of] the first business
2-13 day of August of the year in which the letter is sent. An
2-14 application received after that time may be considered at the
2-15 option of the comptroller. The comptroller may [shall] charge a
2-16 processing fee of $25 for each application and shall deposit the
2-17 fees to the credit of the general revenue fund.
2-18 (d) On receipt of an application under this section, the
2-19 comptroller shall endorse on the application the date of its
2-20 receipt. The comptroller shall prepare a list of the names of the
2-21 applicants and the amount for which each has applied.
2-22 (e) The comptroller may approve those applicants that are
2-23 acceptable and may reject those whose management or condition, in
2-24 the opinion of the comptroller, does not warrant the placing of
2-25 state funds in their possession. [An application for state funds
2-26 may not be granted if the applicant's liabilities for borrowed
2-27 money are in excess of its capital stock, but the comptroller may
3-1 in its discretion waive this provision.]
3-2 (f) [The comptroller may designate an applicant as a state
3-3 depository if the applicant has complied with all of the conditions
3-4 set by the comptroller.] The designation as a state depository is
3-5 effective for a period of not more than two years.
3-6 (g) As soon as practicable after the comptroller has made
3-7 its designations, the comptroller shall inform [all] applicants
3-8 whether they have been designated as state depositories.
3-9 (h) [If more depositories are required at any time, the
3-10 comptroller may send to all eligible institutions notice that
3-11 further applications for designation as a state depository for the
3-12 unexpired term will be accepted.]
3-13 [(i)] The comptroller may execute a simplified version of a
3-14 depository agreement with an eligible institution desiring to hold
3-15 $98,000 or less in state deposits that are fully insured by the
3-16 Federal Deposit Insurance Corporation or the National Credit Union
3-17 Share Insurance Fund.
3-18 SECTION 3. Section 404.023, Government Code, is amended to
3-19 read as follows:
3-20 Sec. 404.023. DESIGNATION. The comptroller shall designate
3-21 one or more state depository banks that have main offices or
3-22 branches in centrally located cities in this state to be used for
3-23 clearing checks and other obligations due the state.
3-24 SECTION 4. Section 404.024, Government Code, is amended by
3-25 amending Subsection (g) and adding Subsections (j) and (k) to read
3-26 as follows:
3-27 (g) To the extent practicable, the comptroller shall give
4-1 first consideration to [Texas] banks that maintain main offices or
4-2 branch offices in this state when investing in direct security
4-3 repurchase agreements.
4-4 (j) If the comptroller is required by law to invest funds
4-5 other than as provided by this section, and if other law does not
4-6 establish a conflicting standard governing that investment, the
4-7 comptroller shall invest those funds under the restrictions and
4-8 procedures for making the investments that persons of ordinary
4-9 prudence, discretion, and intelligence, exercising the judgment and
4-10 care under the prevailing circumstances, would follow in the
4-11 management of their own affairs, not in regard to speculation but
4-12 in regard to the permanent disposition of their funds, considering
4-13 the probable income as well as the probable safety of their
4-14 capital.
4-15 (k) The comptroller may contract with private professional
4-16 investment managers to assist the comptroller in investing funds
4-17 under the care, custody, and control of the comptroller.
4-18 SECTION 5. Sections 404.031(a) and (f), Government Code, are
4-19 amended to read as follows:
4-20 (a) The comptroller may deposit state funds with a
4-21 depository only if the depository has pledged with the comptroller
4-22 eligible investment securities acceptable to the comptroller in an
4-23 amount not less than the amount of deposits to be secured. The
4-24 comptroller shall determine the market value of securities pledged
4-25 to secure state funds for the purpose of determining the adequacy
4-26 of the amount of collateral. The comptroller's valuation of the
4-27 securities is final and not subject to review.
5-1 (f) Instead of depositing pledged securities with the
5-2 comptroller, a state depository may deposit pledged securities with
5-3 a federal reserve bank or a federal home loan bank [the Federal
5-4 Reserve Bank of Dallas or the Federal Home Loan Bank of Dallas].
5-5 The securities shall be held by the bank to secure funds deposited
5-6 by the comptroller in the state depository pledging the securities.
5-7 When the pledged securities are deposited, the bank may apply book
5-8 entry to the securities. The records of the bank shall at all
5-9 times reflect the name of the state depository depositing the
5-10 pledged securities, and the bank shall issue an advice of
5-11 transaction to the comptroller and the state depository pledging
5-12 the securities.
5-13 SECTION 6. This Act takes effect September 1, 1999.
5-14 SECTION 7. The importance of this legislation and the
5-15 crowded condition of the calendars in both houses create an
5-16 emergency and an imperative public necessity that the
5-17 constitutional rule requiring bills to be read on three several
5-18 days in each house be suspended, and this rule is hereby suspended.