By Ellis S.B. No. 251
76R3810 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to deposit of certain public funds in certain financial
1-3 institutions.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle F, Title 10, Government Code, is amended
1-6 by adding Chapter 2259 to read as follows:
1-7 CHAPTER 2259. DEPOSITORY INSTITUTIONS ELIGIBLE FOR DEPOSIT
1-8 OF PUBLIC FUNDS
1-9 Sec. 2259.001. DEFINITIONS. In this chapter:
1-10 (1) "Political subdivision" means any political
1-11 subdivision of this state, including a county, municipality,
1-12 special purpose district, or authority.
1-13 (2) "Public agency" means a state agency, political
1-14 subdivision, or publicly owned utility.
1-15 (3) "Regulated financial institution" has the meaning
1-16 assigned by 12 U.S.C. Section 2902.
1-17 (4) "State agency" means any institution, agency, or
1-18 organ of state government established by the constitution or laws
1-19 of this state, including any department, bureau, board, commission,
1-20 office, or council of this state.
1-21 Sec. 2259.002. SCOPE OF CHAPTER. (a) Except as provided by
1-22 Subsection (b), this chapter applies to funds deposited in a
1-23 regulated financial institution by a public agency, including funds
1-24 deposited under Chapter 116, Local Government Code, or any other
2-1 law.
2-2 (b) This chapter does not apply to funds deposited by the
2-3 comptroller under Chapter 404.
2-4 Sec. 2259.003. COMPTROLLER DUTIES. (a) The comptroller
2-5 shall publish and make available for public inspection a report
2-6 that shows the rating assigned under 12 U.S.C. Section 2906 to each
2-7 regulated financial institution in this state.
2-8 (b) The comptroller shall make the report required by this
2-9 section not later than August 1 of each year.
2-10 (c) If the comptroller determines that, after the effective
2-11 date of this chapter, the federal law defining "regulated financial
2-12 institution" is amended, the comptroller may by rule extend the
2-13 application of this chapter to institutions covered by the amended
2-14 definition if the comptroller determines that application to those
2-15 institutions is consistent with the purposes of this chapter.
2-16 Sec. 2259.004. PROHIBITED DEPOSITS. (a) A public agency
2-17 may not select as a depository a regulated financial institution
2-18 that has been assigned two consecutive ratings below "outstanding
2-19 record of meeting community credit needs" or "satisfactory record
2-20 of meeting community credit needs" under 12 U.S.C. Section 2906.
2-21 (b) If the rating of a financial institution is changed to a
2-22 rating below that required by this section, a public agency shall
2-23 take immediate action to transfer all public funds on deposit with
2-24 the institution to a qualified financial institution.
2-25 Sec. 2259.005. WITHDRAWAL WITHOUT PENALTY. The depository
2-26 contract between a regulated financial institution and a public
2-27 agency must authorize the withdrawal without penalty of the public
3-1 funds on deposit in the event that the rating of the institution is
3-2 changed to a rating below that required by Section 2259.004.
3-3 SECTION 2. Section 404.0212, Government Code, is amended by
3-4 adding Subsection (g) to read as follows:
3-5 (g) The comptroller shall publish and make available for
3-6 public inspection a report that shows the rating assigned under 12
3-7 U.S.C. Section 2906 to each regulated financial institution in this
3-8 state. The comptroller shall make the report required by this
3-9 section not later than August 1 of each year.
3-10 SECTION 3. (a) Except as provided by Subsection (b) of this
3-11 section, the state and each state agency, political subdivision,
3-12 and publicly owned utility to which Chapter 2259, Government Code,
3-13 as added by this Act, applies shall ensure that funds deposited by
3-14 the entity are deposited in compliance with Chapter 2259 not later
3-15 than January 1, 2000.
3-16 (b) A regulated financial institution that is acting as a
3-17 depository of funds subject to Chapter 2259, Government Code, as
3-18 added by this Act, on the effective date of this Act and that does
3-19 not have an assigned rating under 12 U.S.C. Section 2906 that
3-20 satisfies the requirement of Section 2259.004, Government Code, as
3-21 added by this Act, may continue to hold the funds only for the
3-22 period necessary to avoid the imposition of a penalty on the
3-23 depositing entity.
3-24 (c) Section 2259.005, Government Code, as added by this Act,
3-25 applies only to depository contracts executed on or after the
3-26 effective date of this Act.
3-27 SECTION 4. The importance of this legislation and the
4-1 crowded condition of the calendars in both houses create an
4-2 emergency and an imperative public necessity that the
4-3 constitutional rule requiring bills to be read on three several
4-4 days in each house be suspended, and this rule is hereby suspended,
4-5 and that this Act take effect and be in force from and after its
4-6 passage, and it is so enacted.