SRC-LBB S.B. 1318 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1318
By: Van de Putte
Business & Commerce
4/21/2003
As Filed


DIGEST AND PURPOSE 

Currently, the Texas Public Fund Investment Act is silent on securities
lending, although it does allow for similar investment programs such as
repurchase and reverse purchase programs.  Major retirement systems of the
state, including the Employees Retirement System, use securities lending,
and municipalities may be able to add substantial income to their revenue
with securities lending.  As proposed, S.B. 1318 amends the Texas Public
Fund Investment Act to specifically allow municipalities and others
operating under the Act to utilize a securities lending program. 

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 2256.011, Government Code, by amending the
heading and adding Subsection (e), as follows: 

Sec.  2256.011.  New heading:  AUTHORIZED INVESTMENTS:  REPURCHASE
AGREEMENTS AND SECURITIES LENDING PROGRAM. (e)  Authorizes securities or
investments purchased or held under this chapter to be loaned to
securities dealers or financial institutions if the loan is collateralized
by cash or securities having a market value of at least 100 percent of the
market value of the securities loaned. 

SECTION 2.  Effective date:  September 1, 2003.