1-1 By: Lindsay S.B. No. 719
1-2 (In the Senate - Filed February 26, 1999; March 1, 1999, read
1-3 first time and referred to Committee on Finance; March 25, 1999,
1-4 reported favorably, as amended, by the following vote: Yeas 11,
1-5 Nays 0; March 25, 1999, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: West
1-7 Amend S.B. No. 719 as follows:
1-8 In SECTION 1, Subsection (d), Section 404.0212, Government
1-9 Code (Introduced Version page 1, line 26), after "2906." add the
1-10 following sentence:
1-11 However, the comptroller shall establish criteria to
1-12 determine whether a financial institution doing business in this
1-13 state and other states has a satisfactory record of meeting
1-14 community credit needs in this state.
1-15 A BILL TO BE ENTITLED
1-16 AN ACT
1-17 relating to the deposit and investment of funds by the comptroller
1-18 of public accounts.
1-19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-20 SECTION 1. Subsection (d), Section 404.0212, Government
1-21 Code, is amended to read as follows:
1-22 (d) The comptroller may not select as a depository a
1-23 regulated financial institution for which the entire institution
1-24 [that] has been assigned a rating below "outstanding record of
1-25 meeting community credit needs" or "satisfactory record of meeting
1-26 community credit needs" under 12 U.S.C. Section 2906.
1-27 SECTION 2. Section 404.022, Government Code, is amended to
1-28 read as follows:
1-29 Sec. 404.022. APPLICATIONS. (a) The comptroller, not later
1-30 than the first business day [on the second Tuesday] in June of each
1-31 odd-numbered year, shall mail to each eligible institution a letter
1-32 stating the conditions with which applicants for designation as a
1-33 state depository must comply. The comptroller shall keep on file
1-34 in the comptroller's office and make available for inspection by
1-35 any person a list of institutions to which letters have been sent.
1-36 (b) The application for designation as a state depository
1-37 must include a statement:
1-38 (1) of the amount of the applicant's paid capital
1-39 stock and permanent surplus, if any[, or if the applicant is a
1-40 private bank, the amount of net proprietorship];
1-41 (2) of the maximum amount of state time deposits
1-42 [funds] the applicant will accept;
1-43 (3) of the applicant's condition according to the most
1-44 recent financial statement on the date the application is
1-45 submitted; and
1-46 (4) that the books and accounts of the institution, if
1-47 it is designated as a state depository, will be open at all times
1-48 for inspection by the comptroller or a representative of the
1-49 comptroller.
1-50 (c) An application shall be mailed to the comptroller at
1-51 Austin and must be received before noon on [of] the first business
1-52 day of August of the year in which the letter is sent. An
1-53 application received after that time may be considered at the
1-54 option of the comptroller. The comptroller may [shall] charge a
1-55 processing fee of $25 for each application and shall deposit the
1-56 fees to the credit of the general revenue fund.
1-57 (d) On receipt of an application under this section, the
1-58 comptroller shall endorse on the application the date of its
1-59 receipt. The comptroller shall prepare a list of the names of the
1-60 applicants and the amount for which each has applied.
1-61 (e) The comptroller may approve those applicants that are
1-62 acceptable and may reject those whose management or condition, in
1-63 the opinion of the comptroller, does not warrant the placing of
2-1 state funds in their possession. [An application for state funds
2-2 may not be granted if the applicant's liabilities for borrowed
2-3 money are in excess of its capital stock, but the comptroller may
2-4 in its discretion waive this provision.]
2-5 (f) [The comptroller may designate an applicant as a state
2-6 depository if the applicant has complied with all of the conditions
2-7 set by the comptroller.] The designation as a state depository is
2-8 effective for a period of not more than two years.
2-9 (g) As soon as practicable after the comptroller has made
2-10 its designations, the comptroller shall inform [all] applicants
2-11 whether they have been designated as state depositories.
2-12 (h) [If more depositories are required at any time, the
2-13 comptroller may send to all eligible institutions notice that
2-14 further applications for designation as a state depository for the
2-15 unexpired term will be accepted.]
2-16 [(i)] The comptroller may execute a simplified version of a
2-17 depository agreement with an eligible institution desiring to hold
2-18 $98,000 or less in state deposits that are fully insured by the
2-19 Federal Deposit Insurance Corporation or the National Credit Union
2-20 Share Insurance Fund.
2-21 SECTION 3. Section 404.023, Government Code, is amended to
2-22 read as follows:
2-23 Sec. 404.023. DESIGNATION. The comptroller shall designate
2-24 one or more state depository banks with main offices or one or more
2-25 branches in centrally located cities to be used for clearing checks
2-26 and other obligations due the state.
2-27 SECTION 4. Section 404.024, Government Code, is amended by
2-28 amending Subsection (g) and adding Subsections (j) and (k) to read
2-29 as follows:
2-30 (g) To the extent practicable, the comptroller shall give
2-31 first consideration to [Texas] banks with main offices or one or
2-32 more branches located in Texas when investing in direct security
2-33 repurchase agreements.
2-34 (j) If the comptroller is required by law to invest funds
2-35 other than as provided by this section, and if other law does not
2-36 establish a conflicting standard governing that investment, the
2-37 comptroller shall invest those funds under the restrictions and
2-38 procedures for making the investments that persons of ordinary
2-39 prudence, discretion, and intelligence, exercising the judgment and
2-40 care under the prevailing circumstances, would follow in the
2-41 management of their own affairs, not in regard to speculation but
2-42 in regard to the permanent disposition of their funds, considering
2-43 the probable income as well as the probable safety of their
2-44 capital.
2-45 (k) The comptroller may contract with private professional
2-46 investment managers to assist the comptroller in investing funds
2-47 under the care, custody, and control of the comptroller.
2-48 SECTION 5. Subsections (a) and (f), Section 404.031,
2-49 Government Code, are amended to read as follows:
2-50 (a) The comptroller may deposit state funds with a
2-51 depository only if the depository has pledged with the comptroller
2-52 eligible investment securities acceptable to the comptroller in an
2-53 amount not less than the amount of deposits to be secured. The
2-54 comptroller shall determine the market value of securities pledged
2-55 to secure state funds for the purpose of determining the adequacy
2-56 of the amount of collateral. The comptroller's valuation of the
2-57 securities is final and not subject to review.
2-58 (f) Instead of depositing pledged securities with the
2-59 comptroller, a state depository may deposit pledged securities with
2-60 a federal reserve bank or a federal home loan bank [the Federal
2-61 Reserve Bank of Dallas or the Federal Home Loan Bank of Dallas].
2-62 The securities shall be held by the bank to secure funds deposited
2-63 by the comptroller in the state depository pledging the securities.
2-64 When the pledged securities are deposited, the bank may apply book
2-65 entry to the securities. The records of the bank shall at all
2-66 times reflect the name of the state depository depositing the
2-67 pledged securities, and the bank shall issue an advice of
2-68 transaction to the comptroller and the state depository pledging
2-69 the securities.
3-1 SECTION 6. This Act takes effect September 1, 1999.
3-2 SECTION 7. The importance of this legislation and the
3-3 crowded condition of the calendars in both houses create an
3-4 emergency and an imperative public necessity that the
3-5 constitutional rule requiring bills to be read on three several
3-6 days in each house be suspended, and this rule is hereby suspended.
3-7 * * * * *