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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. Chapter 2256, Government Code, is amended by |
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amending Section 2256.010 to 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 |
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ACCOUNTS. (a) A certificate of deposit, [or] share certificate, |
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or insured deposit account is an authorized investment under this |
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subchapter if the certificate or insured deposit account is issued |
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by or established with a depository institution that has its main |
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office 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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deposit accounts, but excluding those mortgage backed securities of |
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the 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 in |
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certificates of deposit or insured deposit accounts under |
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Subsection (a), an investment in certificates of deposit or insured |
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deposit accounts made in accordance with the following conditions |
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is an authorized 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 or |
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insured deposit accounts issued for the account of the investing |
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entity; and |
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(5) at the same time that the funds are deposited and |
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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 that is satisfactory to the depository institution |
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selected by the investing entity [from customers of other federally
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insured depository institutions, wherever located,] that may be |
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[is] less than, equal to, or greater than the amount of the funds |
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invested by the investing entity through the depository institution |
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selected under 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. |