78R1980 ATP-D

By:  Shapleigh                                                    S.B. No. 626



A BILL TO BE ENTITLED

AN ACT

relating to requirements for considering a financial institution 
for selection as a depository of public funds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subtitle Z, Title 3, Finance Code, is amended by 
adding Chapter 278 to read as follows:

CHAPTER 278.  DEPOSIT OF PUBLIC FUNDS
	Sec. 278.001.  DEFINITIONS.  In this chapter:                           
		(1)  "Branch" means a location of a financial 
institution, other than the financial institution's home office, at 
which the financial institution does business.
		(2)  "County in which the financial institution does 
business" means any county in which:
			(A)  the financial institution has a branch or a 
home office; or    
			(B)  a public agency that deposits funds in the 
financial institution is wholly or partly located.
		(3)  "Depository of public funds" means a financial 
institution in which funds are deposited by a public agency, 
including funds deposited under Chapter 105 or 116, Local 
Government Code, and funds deposited by the comptroller under 
Chapter 404, Government Code.
		(4)  "Home office" means a location at which:                          
			(A)  the financial institution does business;                         
			(B)  the financial institution keeps its 
corporate books and records; and
			(C)  at least one executive officer of the 
financial institution maintains an office.
		(5)  "Financial institution" has the meaning assigned 
by Section 201.101.
		(6)  "Public agency" means a state agency, political 
subdivision, or publicly owned utility.
		(7)  "State agency" means any institution, agency, or 
organ of state government established by the constitution or laws 
of this state, including any department, bureau, board, commission, 
office, or council of this state.
	Sec. 278.002.  RESTRICTION ON SELECTION OF DEPOSITORY OF 
PUBLIC FUNDS.  A public agency, when selecting a depository of 
public funds, may consider a financial institution only if the 
financial institution submits to the public agency the information 
required by Section 278.003.
	Sec. 278.003.  REQUIRED INFORMATION.  A financial 
institution shall submit to the public agency considering the 
financial institution for selection as a depository of its public 
funds:
		(1)  an itemized report covering the preceding calendar 
year and stating, separately for each county in which the financial 
institution does business, the financial institution's:
			(A)  deposits;                                                        
			(B)  loans for home purchases or home 
improvements;                 
			(C)  commercial loans, as defined by Section 
306.001;               
			(D)  loans for small businesses, as defined by 
Section 2006.001, Government Code; and
			(E)  loans for the purchase or lease of goods or 
services for personal, family, or household use;
		(2)  if the financial institution displays or 
publishes, or causes to be displayed or published, an advertisement 
regarding the financial institution's prime lending rate for small 
businesses, any information regarding the advertisement that the 
public agency requires;
		(3)  evidence that the financial institution has not 
been assigned a rating below "satisfactory record of meeting 
community credit needs" under 12 U.S.C. Section 2906; and 
		(4)  an itemized report covering the preceding calendar 
year and describing, separately for each county in which the 
financial institution does business:
			(A)  the community reinvestment initiatives and 
special loan programs offered by the financial institution, 
including:
				(i)  the funding level for each program; and                         
				(ii)  the amount of funds actually disbursed 
in the program;       
			(B)  the total number and amount of loans provided 
for small businesses, as defined by Section 2006.001, Government 
Code;
			(C)  the total number and amount of loans for 
small businesses, as defined by Section 2006.001, Government Code, 
excluding extensions of credit made pursuant to a credit card 
transaction;
			(D)  the total number and amount of loans 
guaranteed in whole or in part by the Small Business 
Administration;
			(E)  the business planning and loan application 
assistance programs offered to customers;
			(F)  the financial institution's total number of 
employees, the number of employees who transferred to another 
county or state, and the number of employees who left employment 
with the financial institution; and
			(G)  the amount of charitable contributions.                          
	SECTION 2.  A public agency that enters into a depository 
contract on or after the effective date of this Act shall comply 
with Chapter 278, Finance Code, as added by this Act.
	SECTION 3.  This Act takes effect September 1, 2003.