SRC-TAG S.B. 1624 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1624
By: Bivins
Education
3/28/2003
As Filed


DIGEST AND PURPOSE 

Currently, the Government Code allow banks to collateralize public funds
through the use of declining value mortgage obligation as long as these
are backed by the full faith and credit of the United States government or
the State of Texas.   The change to permit banks to collateralize school
district accounts was made in the Government Code; the Education Code was
never changed.  As proposed, S.B. 1624 changes the Education Code to
reflect the change made for other public entities' accounts.  This bill
clarifies a conflict between the Government Code and the Education Code in
relation to the types of investment instruments that banks can use to
collateralize public funds.  

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 45.201(4), Education Code, to redefine
"approved securities." 

SECTION 2.  Amends Section 2257.022, Government Code, as follows: 

(a) Provides that Subsection (b) is an exception to the requirement that
the total value of eligible security to secure a deposit of public funds
be in a certain amount.   

(b)  Requires the total value of eligible security described by Section
45.201(4)(D), Education Code, to secure a deposit of public funds of a
school district to be in an amount not less than 110 percent of the amount
of the deposit.  Requires the total market value of the eligible security
to be reported at least once each month to the school district. 

 (c)  Redesignated from existing Subsection.

 (d)  Redesignates (d) from existing Subsection (c).


SECTION 3.  Effective date: September 1, 2003.