BILL ANALYSIS
Senate Research Center S.B. 1693
79R3493 HLT-F By: Duncan
AUTHOR'S/SPONSOR'S STATEMENT OF INTENT
H.B. 3459, 78th Regular Session, 2003, made amendments to Section 2257.022, Government Code. These changes were intended to allow eligible financial institutions to pledge declining balance securities (e.g., mortgage backed securities and collateralized mortgage options) at 110 percent of the balance to secure public school deposits. This goal was accomplished; however, the unintended consequence was to include other United States and Texas government agency and instrumentality securities under this new requirement.
S.B. 1693 clarifies that only declining balance securities are subject to the higher requirement by amending Section 45.201(4)(D), Education Code, to include only declining balance securities, and adding a new Subsection (4)(E) to include "all other obligations" of the United States or Texas governments, thus reinstating the existing requirement to fully secure − but not "over-secure" − public school deposits.
Additionally, S.B. 1693 addresses redundant language in Section 45.201(2), Education Code, by providing for only one definition of "bank."
RULEMAKING AUTHORITY
SECTION BY SECTION ANALYSIS
SECTION 1. Reenacts Section 45.201(2), Education Code, as amended by Chapters 62 and 344, Acts of the 76th Legislature, Regular Session, 1999, to define "bank."
SECTION 2. Amends Section 45.201(4), Education Code, to redefine "approved securities."
SECTION 3. Effective date: upon passage or September 1, 2005.