77R11483 JJT-D                           
         By Tillery                                            H.B. No. 1968
         Substitute the following for H.B. No. 1968:
         By Woolley                                        C.S.H.B. No. 1968
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to permissible investments, under the Public Funds
 1-3     Investment Act, in certificates of deposit issued by certain
 1-4     financial institutions.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1. Section 2256.010, Government Code, is amended to
 1-7     read as follows:
 1-8           Sec. 2256.010.  AUTHORIZED INVESTMENTS:  CERTIFICATES OF
 1-9     DEPOSIT AND SHARE CERTIFICATES. A certificate of deposit is an
1-10     authorized investment under this subchapter if:
1-11                 (1)  the certificate is issued by a:
1-12                       (A)  [state or national] bank organized under the
1-13     laws of [domiciled in] this state, the laws of another state, or
1-14     federal law, that has its main office or a branch office in this
1-15     state;
1-16                       (B)  savings and loan association or [a] savings
1-17     bank organized under the laws of [domiciled in] this state, the
1-18     laws of another state, or federal law, that has its main office or
1-19     a branch office in this state; or
1-20                       (C)  [or a] state or federal credit union
1-21     domiciled in this state; and
1-22                 (2)  the certificate is:
1-23                       (A) [(1)]  guaranteed or insured by the Federal
1-24     Deposit Insurance Corporation or its successor or the National
 2-1     Credit Union Share Insurance Fund or its successor;
 2-2                       (B) [(2)]  secured by obligations that are
 2-3     described by Section 2256.009(a), including mortgage backed
 2-4     securities directly issued by a federal agency or instrumentality
 2-5     that have a market value of not less than the principal amount of
 2-6     the certificates, but excluding those mortgage backed securities of
 2-7     the nature described by Section 2256.009(b); or
 2-8                       (C) [(3)]  secured in any other manner and amount
 2-9     provided by law for deposits of the investing entity.
2-10           SECTION 2. (a)  This Act takes effect September 1, 2001.
2-11           (b)  Section 2256.010, Government Code, as amended by this
2-12     Act, applies only to an investment under Chapter 2256, Government
2-13     Code (Public Funds Investment Act), made on or after the effective
2-14     date of this Act.  An investment in a certificate of deposit under
2-15     Chapter 2256, Government Code, made before the effective date of
2-16     this Act is governed during the term of the certificate by Section
2-17     2256.010, Government Code, as it existed immediately before that
2-18     date, and the former law is continued in effect for that purpose.