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A BILL TO BE ENTITLED
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AN ACT
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relating to the deposit of certain public funds with federally |
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insured financial institutions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2256.010, Government Code, is amended to |
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read as follows: |
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Sec. 2256.010. AUTHORIZED INVESTMENTS: CERTIFICATES OF |
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DEPOSIT, [AND] SHARE CERTIFICATES, AND INSURED DEPOSIT ACCOUNTS. |
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(a) A certificate of deposit, a [or] share certificate, or an |
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insured deposit account is an authorized investment under this |
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subchapter if the certificate or account is issued by or |
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established with a depository institution that has its main office |
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or a branch office in this state and is: |
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(1) guaranteed or insured by the Federal Deposit |
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Insurance Corporation or its successor or the National Credit Union |
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Share Insurance Fund or its successor; |
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(2) secured by obligations that are described by |
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Section 2256.009(a), including mortgage backed securities directly |
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issued by a federal agency or instrumentality that have a market |
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value of not less than the principal amount of the certificates or |
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accounts, but excluding those mortgage backed securities of the |
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nature described by Section 2256.009(b); or |
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(3) secured in any other manner and amount provided by |
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law for deposits of the investing entity. |
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(b) In addition to the authority to invest funds as provided |
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by [in certificates of deposit under] Subsection (a), an investment |
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in certificates of deposit or in insured deposit accounts made in |
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accordance with the following conditions is an authorized |
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investment under this subchapter: |
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(1) the funds are invested by an investing entity |
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through a depository institution that has its main office or a |
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branch office in this state and that is selected by the investing |
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entity; |
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(2) the depository institution selected by the |
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investing entity under Subdivision (1) arranges for the deposit of |
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the funds in certificates of deposit or insured deposit accounts in |
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one or more federally insured depository institutions, wherever |
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located, for the account of the investing entity; |
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(3) the full amount of the principal and accrued |
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interest of each of the certificates of deposit or insured deposit |
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accounts is insured by the United States or an instrumentality of |
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the United States; |
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(4) the depository institution selected by the |
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investing entity under Subdivision (1) acts as custodian for the |
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investing entity with respect to the certificates of deposit issued |
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or insured deposit accounts established for the account of the |
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investing entity; and |
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(5) at the same time that the funds are deposited or |
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[and] the certificates of deposit are issued for the account of the |
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investing entity, the depository institution selected by the |
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investing entity under Subdivision (1) receives an amount of |
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deposits [from customers of other federally insured depository
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institutions, wherever located,] that is satisfactory to that |
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depository institution. The amount may be less than, equal to, or |
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greater than the amount of the funds invested by the investing |
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entity through the depository institution selected under |
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Subdivision (1). |
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SECTION 2. 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. |