By:  Bivins                                                       S.B. No. 1624


A BILL TO BE ENTITLED

AN ACT

relating to security requirements for the deposit of school 
district funds. 
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subdivision (4), Section 45.201, Education Code, 
is amended to read as follows:
		(4)  "Approved securities" means:                                             
			(A)  bonds of this state or any agency or 
political subdivision of this state;
			(B)  all evidences of indebtedness legally issued 
by the board of trustees of the depositing school district;
			(C)  all debt securities that are a direct 
obligation of the treasury of the United States;
			(D)  other obligations [all debt securities, 
except reducing principal balance securities], the principal and 
interest of which are unconditionally guaranteed or insured by, or 
backed [in the event of default] by the full faith and credit of, 
this state or the United States or their respective agencies and 
instrumentalities; and
			(E)  those securities provided for by Article 842, 
Revised Statutes, and Section 1, Chapter 160, General Laws, Acts of 
the 43rd Legislature, 1933 (Article 842a, Vernon's Texas Civil 
Statutes).
	SECTION 2.  Section 2257.022, Government Code, is amended to 
read as follows:
	Sec. 2257.022.  AMOUNT OF COLLATERAL.  (a)  Except as 
provided by Subsection (b), the [The] total value of eligible 
security to secure a deposit of public funds must be in an amount 
not less than the amount of the deposit of public funds:
		(1)  increased by the amount of any accrued interest; 
and                   
		(2)  reduced to the extent that the United States or an 
instrumentality of the United States insures the deposit.
	(b)  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 must be in an amount not less than 110 
percent of the amount of the deposit.  The total market value of the 
eligible security must be reported at least once each month to the 
school district.
	(c)  The value of a surety bond is its face value.                      
	(d) [(c)]  The value of an investment security is its market 
value.
	SECTION 3.  This Act takes effect September 1, 2003.