By Tillery                                            H.B. No. 2020
         77R5189 JJT-F                           
                                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 the certificate is
1-11     issued by:
1-12                 (1)  a [state or national] bank organized under the
1-13     laws of [domiciled in] this state, another state, or federal law
1-14     that has its main office or a branch in this state; or
1-15                 (2)  a savings and loan association or [a] savings bank
1-16     organized under the laws of [domiciled in] this state, another
1-17     state, or federal law that has its main office or a branch [or a
1-18     state or federal credit union domiciled] in this state [and is:]
1-19                 [(1)  guaranteed or insured by the Federal Deposit
1-20     Insurance Corporation or its successor or the National Credit Union
1-21     Share Insurance Fund or its successor;]
1-22                 [(2)  secured by obligations that are described by
1-23     Section 2256.009(a), including mortgage backed securities directly
1-24     issued by a federal agency or instrumentality that have a market
 2-1     value of not less than the principal amount of the certificates,
 2-2     but excluding those mortgage backed securities of the nature
 2-3     described by Section 2256.009(b); or]
 2-4                 [(3)  secured in any other manner and amount provided
 2-5     by law for deposits of the investing entity].
 2-6           SECTION 2. (a)  This Act takes effect September 1, 2001.
 2-7           (b)  Section 2256.010, Government Code, as amended by this
 2-8     Act, applies only to an investment under Chapter 2256, Government
 2-9     Code (Public Funds Investment Act), made on or after the effective
2-10     date of this Act.  An investment in a certificate of deposit under
2-11     Chapter 2256, Government Code, made before the effective date of
2-12     this Act is governed during the term of the certificate by Section
2-13     2256.010, Government Code, as it existed immediately before that
2-14     date, and the former law is continued in effect for that purpose.