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A BILL TO BE ENTITLED
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AN ACT
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relating to the investment of public funds in ways that benefit the |
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state and local economies and to the selection of local financial |
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institutions for the deposit of public funds. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 2256, Government Code, is |
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amended by adding Section 2256.056 to read as follows: |
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Sec. 2256.056. INVESTMENTS TO BENEFIT STATE OR LOCAL |
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ECONOMY. (a) To the extent allowed under the constitution of this |
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state, each investing entity and each person investing funds on |
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behalf of an investing entity shall determine, for each investment |
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of funds, whether it is reasonably possible to make an investment |
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that will probably provide a benefit to the state economy and that |
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is an equally prudent investment, under the standard of care |
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applicable to the investment decision, in comparison to alternative |
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investments that would probably provide no benefit or insignificant |
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benefits to the state economy. If the person making the investment |
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decision determines that it is reasonably possible to make the |
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equally prudent investment that will probably provide a benefit to |
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the state economy, the person shall invest the funds in that manner. |
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(b) Each investing entity that is a local government and |
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each person investing funds on behalf of the local government shall |
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also determine, for each investment of funds and to the extent |
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allowed under the constitution of this state, whether it is |
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reasonably possible to make an investment that will probably |
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provide a benefit to the local economy and that is an equally |
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prudent investment, under the standard of care applicable to the |
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investment decision, in comparison to alternative investments that |
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would probably provide no benefit or insignificant benefits to the |
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local economy. If the person making the investment decision |
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determines that it is reasonably possible to make the equally |
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prudent investment that will probably provide a benefit to the |
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local economy, the person shall invest the funds in that manner. |
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SECTION 2. Section 404.024, Government Code, is amended by |
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adding Subsection (m) to read as follows: |
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(m) In making investments under Subsection (b), the |
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comptroller shall determine, for each investment of state funds, |
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whether it is reasonably possible to make an investment that will |
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probably provide a benefit to the state economy and that is an |
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equally prudent investment in comparison to alternative |
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investments allowed under Subsection (b) that would probably |
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provide no benefit or insignificant benefits to the state economy. |
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If the comptroller determines that it is reasonably possible to |
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make such an equally prudent investment that will probably provide |
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a benefit to the state economy, the comptroller shall invest the |
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state funds in that manner. |
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SECTION 3. Subchapter Z, Chapter 131, Local Government |
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Code, is amended by adding Section 131.904 to read as follows: |
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Sec. 131.904. LOCAL FINANCIAL INSTITUTIONS. Each political |
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subdivision, including a county, municipality, school district, or |
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other district, shall adopt procedures to ensure that local |
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financial institutions that are eligible to be selected as a |
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depository for funds under the political subdivision's control: |
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(1) have: |
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(A) a reasonable opportunity to learn before the |
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selection decision is made that the political subdivision will be |
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selecting a depository; and |
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(B) sufficient time after learning of the |
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selection process to prepare and file a valid application for |
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selection as a depository; and |
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(2) can obtain timely, correct information from the |
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political subdivision about any requirements for making the |
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application. |
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SECTION 4. This Act takes effect September 1, 2007. |