Amend HB 2914 as follows:
(1) Insert the following appropriately numbered SECTIONS to
take effect September 1, 2001:
"SECTION _____. Section 404.101, Government Code, is amended
to read as follows:
Sec. 404.101. DEFINITIONS. In this subchapter:
(1) "Advisory board" means the Texas treasury
safekeeping trust company investment advisory board.
(2) "Participant" means the state, agencies and local
political subdivisions of the state, and nonprofit corporations,
foundations, and other charitable organizations created on behalf
of the state or an agency or local political subdivision of the
state authorized to deposit money and securities with the trust
company.
(3) "The state and its agencies" includes the
Employees Retirement System of Texas and the Teacher Retirement
System of Texas.
(4) <(2)> "Trust company" means the Texas Treasury
Safekeeping Trust Company.
SECTION _____. Section 404.103, Government Code, is amended
by amending Subsection (b) and adding Subsections (e), (f), and (g)
to read as follows:
(b) The trust company may enter into contracts, <and> trust
agreements, or other fiduciary instruments with the comptroller,
the Federal Reserve System, a depository trust company, and other
third parties. The trust company shall be liable under those
contracts in accordance with the terms contained in the contracts.
Notwithstanding any other statute to the contrary, to the extent
permitted by the Texas Constitution and the contracts, trust
agreements, or other fiduciary instruments between the trust
company, the Federal Reserve System, and a depository trust
company, the trust company's obligations shall be guaranteed by the
state, and the state expressly waives all defenses of governmental
immunity by and on behalf of the trust company, the comptroller,
and the state and expressly consents to sue and be sued in federal
court or in any court of competent jurisdiction. However, this
provision does not alter or affect the immunity accorded to state
officials and employees under state law. The trust company may
enter into contracts with the comptroller and the Federal Reserve
System to provide any services that the Federal Reserve System
makes available, including:
(1) safekeeping book-entry United States Treasury and
agency securities owned by the state and its agencies;
(2) using the federal reserve wire transfer system to
transfer money and book-entry securities and to settle securities
transactions involving book-entry United States Treasury and agency
securities owned by the state and its agencies;
(3) collecting, through the Federal Reserve System,
checks deposited with the treasury;
(4) receiving payments from and making payments to the
federal government on behalf of the state and its agencies;
(5) originating automated clearinghouse transactions
or other electronic transfers to make payments on behalf of the
state and its agencies, collecting revenues due the state and its
agencies, and transferring money between state depositories;
(6) paying warrants drawn on the treasury and
presented through the Federal Reserve System for payment; and
(7) safekeeping collateral pledged to secure deposits
of public funds.
(e) The trust company may hire employees and may fix their
compensation and prescribe their duties or may contract with the
comptroller's office for staff support.
(f) The trust company shall develop a fee schedule in the
amount necessary to recover costs of service and to retain adequate
reserves to support the operations of the trust company.
(g) The trust company is exempt from other state laws
regulating or limiting state purchasing or a purchasing decision if
the trust company determines that the purchase or decision relates
to the fiduciary duties of the trust company. The trust company
shall make all purchases of goods and services using purchasing
methods that ensure the best value to the trust company and its
participants. In determining best value, the trust company may
consider the best value standards applicable to state agencies as
enumerated in Section 2155.074. The trust company shall develop a
plan of operation that includes procedures and standards for the
purchases of goods and services using best value methods.
SECTION _____. Subsection (c), Section 404.104, Government
Code, is amended to read as follows:
(c) The comptroller shall submit to the Legislative Budget
Board an audited report regarding the operations of the trust
company. The trust company may contract with a certified public
accountant or the state auditor to <shall> conduct an independent
audit of the operations of the trust company. This subsection does
not affect the state auditor's authority to conduct an audit of the
trust company in accordance with Chapter 321.
SECTION _____. Section 404.105, Government Code, is amended
to read as follows:
Sec. 404.105. CAPITAL OR RESERVE <REQUIREMENTS>. The trust
company shall hold <have> capital stock and <or> reserve balances
outside the treasury in an amount required by applicable regulatory
bodies for eligibility for federal reserve services, for
participation in a depository trust company, and as necessary to
achieve its purposes under Section 404.103<, but the amount may not
be more than $1 million>. The stock of the trust company is an
authorized investment for state funds and shall be held by the
comptroller, but the amount may not be more than $1 million.
SECTION _____. Section 404.106, Government Code, is amended
by amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) Any net earnings of the trust company attributable to
capital stock or investments of capital stock shall be credited
annually to the account of the treasury and shall be allocated
annually to the funds held and managed by the comptroller in
accordance with Section 404.071(a).
(d) The trust company may hold reserve balances or
securities as required by the Federal Reserve System or as required
for participation in a depository trust company.
SECTION _____. Section 404.107, Government Code, is amended
to read as follows:
Sec. 404.107. FEES. (a) Any fees or assessments imposed by
state law for the incorporation, regulation, or operation of trust
companies do not apply to the Texas Treasury Safekeeping Trust
Company.
(b) Agencies and local political subdivisions of the state
and nonprofit corporations, foundations, and other charitable
organizations created on behalf of the state or an agency or local
political subdivision of the state that are authorized or required
to deposit money and securities with the trust company shall pay
the fees established on the trust company's fee schedule.
SECTION _____. Subchapter G, Chapter 404, Government Code,
is amended by adding Sections 404.108 through 404.116 to read as
follows:
Sec. 404.108. TRUST COMPANY INVESTMENT ADVISORY BOARD.
(a) The comptroller may appoint an investment advisory board to
advise the comptroller with respect to managing the assets held by
the trust company. The advisory board shall provide the
comptroller guidance on the investment philosophy that should be
pursued in managing the assets under the trust company's control.
The advisory board serves in an advisory capacity only and is not a
fiduciary with respect to the assets held by the trust company.
(b) The advisory board is composed of seven members
appointed by the comptroller with the advice of the governor,
lieutenant governor, and speaker of the house of representatives.
(c) The members of the advisory board must have knowledge of
or experience in finance, including the management of funds or
business operations.
(d) Appointments to the advisory board shall be made without
regard to the race, color, disability, sex, religion, age, or
national origin of appointees.
(e) Each member of the advisory board must be a resident of
this state.
(f) The creation, size, composition, and duration of the
advisory board is governed exclusively by this subchapter. Chapter
2110 does not apply to the size, composition, or duration of the
advisory board.
Sec. 404.109. RESTRICTIONS ON ADVISORY BOARD APPOINTMENT,
MEMBERSHIP, AND EMPLOYMENT. A person is not eligible for
appointment to the advisory board if the person or the person's
spouse:
(1) is employed by or participates in the management
of a business entity or other organization receiving funds from the
trust company;
(2) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization receiving funds from the trust company; or
(3) receives money from the business entity or other
organization receiving funds from the trust company that exceeds
five percent of the person's gross income for the preceding
calendar year.
Sec. 404.110. REMOVAL OF ADVISORY BOARD MEMBERS. The
comptroller may remove from the advisory board an advisory board
member at will or for any of the following causes:
(1) at the time of the member's appointment, the
member did not have the qualifications prescribed by Section
404.108 or was ineligible under Section 404.109;
(2) while serving on the advisory board, the member
does not maintain the qualifications prescribed by Section 404.108
or becomes ineligible for appointment under Section 404.109;
(3) for a substantial portion of the member's term,
the member is unable to discharge the member's duties because of
illness or disability; or
(4) without being excused by a majority vote of the
advisory board, the member is absent from more than one-third of
the regularly scheduled board meetings that the members is eligible
to attend during calendar year.
Sec. 404.111. ADVISORY BOARD MEMBER TRAINING. (a) Before a
member of the advisory board may assume the member's duties, the
member must complete at least one course of the training program
established under this section.
(b) A training program established under this section shall
provide information regarding:
(1) the role and functions of the trust company;
(2) the assets managed by and programs operated by the
trust company; and
(3) the statutes applicable to the trust company,
including Chapters 551, 552, and 2001.
Sec. 404.112. COMPENSATION; EXPENSES. Members of the
advisory board serve without compensation but are entitled to
reimbursement for actual and necessary expenses in attending
meetings of the advisory board or performing other official duties
authorized by the comptroller.
Sec. 404.113. MEETINGS. (a) The advisory board may meet as
often as necessary, but shall meet at least twice each year.
(b) Advisory board meetings are subject to Chapter 551.
Sec. 404.114. INVESTMENT MANAGEMENT. (a) The comptroller
may delegate investment authority and may contract with private
professional investment managers to manage or assist in managing
assets held by the trust company.
(b) The comptroller may delegate a power or duty relating to
the investment of assets held by the trust company to an employee
or agent of the comptroller, including professional investment
managers.
Sec. 404.115. PERSONNEL. (a) The comptroller may appoint a
person to serve as chief executive officer in managing the trust
company and carrying out the policies of the trust company. The
chief executive officer and employees of the trust company serve at
the will of the comptroller.
(b) The comptroller may delegate any of the comptroller's
duties to the chief executive officer and trust company employees.
(c) The chief executive officer or the chief executive
officer's designee shall develop a career ladder program and a
system of compensation necessary to retain qualified staff.
(d) The chief executive officer or the chief executive
officer's designee shall develop a system of annual performance
evaluations. Merit pay for trust company employees must be based
on the system established under this subsection.
(e) The chief executive officer or the chief executive
officer's designee shall prepare and maintain a written policy
statement to assure implementation of a program of equal employment
opportunity under which all personnel decisions are made without
regard to race, color, disability, religion, age, or national
origin.
(f) The chief executive officer shall appoint an internal
auditor for the trust company. The appointment of the internal
auditor must be approved by the comptroller. The comptroller may
require the internal auditor to submit certain reports directly to
the comptroller.
(g) Except as provided by this section and Section
404.103(e), trust company employees hired under this subchapter are
state employees for all purposes, including accrual of leave time,
insurance benefits, retirement benefits, and travel regulations,
Chapter 104, Civil Practice and Remedies Code, and Chapter 501,
Labor Code.
Sec. 404.116. LIABILITY INSURANCE FOR CERTAIN BOARD MEMBERS,
OFFICIALS, AND STAFF. (a) The trust company may purchase or
otherwise acquire insurance to protect members of the advisory
board and the trust company staff.
(b) Insurance purchased or acquired by the trust company
under this section may:
(1) protect against any type of liability to third
persons that might be incurred while conducting trust company
business; and
(2) provide for all costs of defending against such
liability, including court costs and attorney's fees.
(c) This section does not authorize the purchase or
acquisition of insurance to protect against liability not described
in Subsection (b).".
(2) Renumber the existing SECTIONS of the bill and revise
cross-references to existing SECTIONS of the bill accordingly.