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.