SRC-VRA H.B. 3312 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 3312
78R11296 PAM-FBy: Capelo (Hinojosa)
Intergovernmental Relations
5/21/2003
Engrossed


DIGEST AND PURPOSE 

Chapter 116, Local Government Code, governs the selection and
qualifications of one or more banks to serve as the depositories for
county funds.  A bank may not serve as a county depository unless the bank
qualifies by providing security for the funds to be deposited by the
county with the bank.  The securities pledged by a bank must be of a type
and in the amount specified under Subchapter C, Chapter 116. 

Section 116.082 (a) permits a depository to substitute one type of
security for another or to replace particular securities with others of
the same type.  The exchange must meet legal requirements and be approved
by the commissioners court.  Because the commissioners courts in some
counties meet as infrequently as monthly or quarterly, a significant delay
may occur before the approval is given.  A delay of days, weeks, or months
may jeopardize the bank's ability to timely execute financial transactions
that are beneficial to the county. 

H.B. 3312 authorizes a commissioners court to adopt a procedure
designating one person to approve an exchange of securities that a
depository has pledged to secure the county's funds.  This change may
allow the depository to avoid delays that might prove financially
detrimental to the county. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends  Section 116.082(a), Local Government Code, to
authorize the commissioners court, instead of approval of each substitute
or replacement security by the commissioners court, to adopt a procedure
for approving a substitute or replacement security under this section and
to designate a county employee or official, including a county judge, to
approve the substitute or replacement security under the procedure adopted
under Subdivision (1).       

SECTION 2.  Effective date:  upon passage or September 1, 2003.