AN ACT
 1-1     relating to the investment of debt service funds by school
 1-2     districts, junior college districts, and community college
 1-3     districts.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter E, Chapter 45, Education Code, is
 1-6     amended by adding Section 45.112 to read as follows:
 1-7           Sec. 45.112.  CONTRACTS FOR INVESTMENT OF DEBT SERVICE FUNDS.
 1-8     (a)  A school district, including a junior college district or
 1-9     community college district, may enter into a contract with a term
1-10     not to exceed seven years to purchase investments with the proceeds
1-11     of taxes levied or to be levied by the district for the purpose of
1-12     paying debt service on bonds issued by the district.
1-13           (b)  A contract under this section may provide for the
1-14     purchase of investments at a stated yield or yields.
1-15           (c)  Before entering a contract under this section, a school
1-16     district must solicit and receive bids from at least three separate
1-17     providers.  The district must accept the qualifying bid that
1-18     provides for the highest yield investments over the term of the
1-19     contract.
1-20           (d)  A contract under this section may provide only for the
1-21     purchase of an obligation described by Section 2256.009(a)(1),
1-22     Government Code, other than an obligation described by Section
1-23     2256.009(b) of that code.
1-24           SECTION 2.  The importance of this legislation and the
 2-1     crowded condition of the calendars in both houses create an
 2-2     emergency and an imperative public necessity that the
 2-3     constitutional rule requiring bills to be read on three several
 2-4     days in each house be suspended, and this rule is hereby suspended,
 2-5     and that this Act take effect and be in force from and after its
 2-6     passage, and it is so enacted.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1089 passed the Senate on
         April 29, 1999, by the following vote:  Yeas 29, Nays 0.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1089 passed the House on
         May 26, 1999, by the following vote:  Yeas 144, Nays 0, two present
         not voting.
                                             _______________________________
                                                 Chief Clerk of the House
         Approved:
         _______________________________
                     Date
         _______________________________
                   Governor