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A BILL TO BE ENTITLED
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AN ACT
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relating to the selection of depositories for certain county funds, |
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including funds held by a county or district clerk. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 116.021, Local Government Code, is |
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amended to read as follows: |
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Sec. 116.021. DEPOSITORY AND SUBDEPOSITORY CONTRACTS. (a) |
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The commissioners court of a county [at its May regular term
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immediately following each general election for state and county
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officers] shall select by the process provided by this subchapter |
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or by Subchapter C, Chapter 262 [contract with] one or more banks in |
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the county and enter a contract with each selected bank for the |
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deposit of the county's public funds. The county shall contract |
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with a bank under this section for a two-year or four-year contract |
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term. The original term may be renewed for an additional two-year |
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term. |
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(b) If the contract is for a four-year term, the contract |
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shall allow the county [bank] to establish, on the basis of |
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negotiations with the bank [county], new interest rates and |
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financial terms of the contract that will take effect during the |
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final two years of the four-year contract if: |
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(1) the new financial terms do not increase the prices |
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to the county by more than 10 percent; and |
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(2) the county has the option to choose to use the |
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initial variable interest rate option or to change to the new fixed |
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or variable interest rate options proposed by the bank. |
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(c) On the renewal of a contract, the county may negotiate |
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new interest rates and terms with the bank for the next two years in |
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the same way and subject to the same conditions as provided by |
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Subsection (b) [If for any reason a county depository is not
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selected under Subsection (a), the commissioners court, at any
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subsequent time after 20 days' notice, may select, by the process
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described by Section 116.024 or by negotiated bid, one or more
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depositories in the same manner as at the regular time]. |
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(d) If the commissioners court selects a depository by the |
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process provided by Subchapter C, Chapter 262, the depository may |
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be selected by: |
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(1) competitive bidding; or |
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(2) another method under that subchapter that the |
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county is qualified to use. |
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SECTION 2. Section 116.022(a), Local Government Code, is |
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amended to read as follows: |
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(a) Once each week for at least 20 days before the date to |
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submit an application under Section 116.023(a) [May regular term of
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a commissioners court at which the court will make a depository
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contract], the county judge shall place over the judge's name in a |
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newspaper published in the county a notice that the commissioners |
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court intends to make the contract. A notice shall also be posted |
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at the courthouse door of the county. |
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SECTION 3. Section 116.023(a), Local Government Code, is |
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amended to read as follows: |
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(a) A bank in the county that wants to be a county depository |
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must deliver its application to the county judge or a designated |
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representative of the judge on or before a date set by the |
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commissioners court that is no later than the 60th day before the |
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date of the expiration of the existing depository contract [the
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first day of the term of the commissioners court at which
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depositories are to be selected]. |
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SECTION 4. Section 116.024(a), Local Government Code, is |
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amended to read as follows: |
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(a) After the date by which applications must be received |
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under Section 116.023(a), but before the expiration of the existing |
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depository contract [At 10 a.m. on the first day of each term at
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which banks are to be selected as county depositories], the |
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commissioners court shall: |
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(1) enter in the minutes of the court all applications |
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filed with the county judge; |
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(2) consider all applications; and |
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(3) select the qualified applicants that offer the |
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most favorable terms and conditions for the handling of the county |
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funds. |
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SECTION 5. Section 117.021, Local Government Code, is |
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amended to read as follows: |
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Sec. 117.021. APPLICATIONS. (a) The commissioners court |
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of a county [at its May regular term after a general election for
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state and county officers] shall select by the process provided by |
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this subchapter or by Subchapter C, Chapter 262, [receive an
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application from] a federally insured bank or banks in the county to |
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be the depository for a special account held by the county clerk and |
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the district clerks. The county shall enter a contract with the |
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selected [a federally insured] bank or banks [under this section] |
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for a two-year or four-year [contract] term. The original term can |
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be renewed once for an additional two-year term. The contract may, |
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on request by the clerk and approval of the commissioners court, |
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include a provision that the funds in a special account earn |
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interest. A request from the clerk that an account earn interest |
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must be made, in writing, to the commissioners court not later than |
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the 30th day before the date the county gives notice under Section |
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117.022 and shall be entered in the minutes of the court. |
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(b) If the contract is for a four-year term, the contract |
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shall allow the county [bank] to establish, on the basis of |
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negotiations with the bank [county], new interest rates and |
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financial terms of the contract that will take effect during the |
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final two years of the four-year contract if: |
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(1) the new financial terms do not increase the prices |
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to the county by more than 10 percent; and |
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(2) the county has the option to choose to use the |
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initial variable interest rate option or to change to the new fixed |
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or variable interest rate options proposed by the bank. |
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(c) On the renewal of a contract, the county may negotiate |
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new interest rates and terms with the bank for the next two years in |
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the same way and under the same conditions as provided by Subsection |
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(b). |
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(d) If a bank is selected as provided by this subchapter, |
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the [A] bank must file its application on or before a date set by the |
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commissioners court that is no later than the 60th day before the |
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date of the expiration of the existing depository contract [10 a.m.
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on the first day of the term]. The application must be accompanied |
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by a certified check or cashier's check for at least one-half of one |
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percent of the average daily balance of the registry funds held by |
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the county clerk and the district clerk during the preceding |
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calendar year, as determined by the county clerk and the district |
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clerk on or before the 10th day before the date the application is |
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required to be filed. A certified check or cashier's check that |
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complies with this section is a good-faith guarantee on the part of |
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the applicant that if its application is accepted it will execute |
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the bond required under this subchapter. If the bank selected as |
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depository does not provide the bond, the county shall retain the |
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amount of the check as liquidated damages and the county shall |
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select another depository as provided by this subchapter. |
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[(d) If for any reason a county depository is not selected
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under Subsection (a), the commissioners court, at any subsequent
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time after 20 days' notice, may select, by the process described by
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Section 117.023 or by negotiated bid, one or more depositories in
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the same manner as at the regular term.] |
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(e) If the commissioners court selects a depository by the |
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process provided by Subchapter C, Chapter 262, the depository may |
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be selected by: |
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(1) competitive bidding; or |
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(2) another method under that subchapter that the |
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county is qualified to use. |
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SECTION 6. Section 117.023(a), Local Government Code, is |
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amended to read as follows: |
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(a) At the meeting [10 a.m. on the first day of each term] at |
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which banks are to be selected [the commissioners court is required
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to receive applications] to serve as the depository for registry |
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funds held by the county clerk and the district clerk, the |
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commissioners court shall enter the applications in the minutes of |
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the court and select a depository. |
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SECTION 7. Section 117.025(b), Local Government Code, is |
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amended to read as follows: |
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(b) A designation under Subsection (a) is effective until |
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the designation and qualification of a successor depository or |
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until April 15 following the expiration of the contract [term in
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which a depository must be selected under this subchapter], |
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whichever is earlier. If the term of a depository ends before the |
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designation and qualification of a successor, the depository shall |
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pay to the clerk in whose name the account is carried all registry |
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funds due or on deposit. |
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SECTION 8. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |