Amend SB 638 (Senate committee printing) by adding a new
SECTION 3 and SECTION 4 as follows and renumbering the remaining
section accordingly:
SECTION 3. Section 404.031(e), Government Code, is amended
to read as follows:
(e) Instead of depositing pledged securities with the
comptroller, a depository may deposit them with a custodian. The
custodian may be the (i) Texas Treasury Safekeeping Trust Company,
(ii) [or] a state or national bank that has a capital stock and
permanent surplus of not less than $5 million, is a state
depository, and has been designated as a custodian by the
comptroller, or (iii) a financial institution authorized to
exercise fiduciary powers that has a capital stock and permanent
surplus of not less than $5 million, has its main office, branch
office or a trust office in this state, and has been designated as a
custodian by the comptroller. For purposes of this subsection (e),
"financial institution" has the meaning assigned by Section
201.101(1), Finance Code. The comptroller may designate those
custodial applicants that are acceptable and may reject those
whose management or condition, in the opinion of the comptroller,
do not warrant the placing of securities pledged by state
depositories. The comptroller may adopt and enforce rules governing
the designation and conduct of custodians with respect to the
acceptance and holding of securities pledged by state depositories
that the public interest requires and that are not inconsistent
with the law governing custodians as set forth in this chapter. The
state depository and the custodian of securities pledged by that
state depository may not be the same bank or be owned by the same
bank holding company. The securities shall be held in trust by the
custodian to secure funds deposited by the comptroller in the state
depository pledging the securities. On receipt of the securities,
the custodian shall immediately, by book entry or otherwise,
identify on its books and records the pledge of the securities and
shall promptly issue and deliver to the comptroller controlled
trust receipts for the securities pledged. The security evidenced
by the trust receipts is subject to inspection by the comptroller at
any time. The depository pledging the securities shall pay the
charges, if any, of the custodian bank for accepting and holding the
securities. The custodian, acting alone or through a permitted
institution, is for all purposes under state law and
notwithstanding Chapters 8 and 9, Business & Commerce Code, the
bailee or agent of the comptroller. The security interest arising
out of a pledge of securities to secure deposits of the state is
created, attaches, and is perfected for all purposes under state
law from the time the custodian identifies the pledge of the
securities on its books and records and issues the trust receipts.
The security interest remains perfected as of that time in the hands
of all subsequent custodians and permitted institutions.
SECTION 4. Section 2257.041(d), Government Code, is amended
to read as follows:
(d) A custodian must be approved by the public entity and
be:
(1) a state or national bank that:
(A) is designated by the comptroller as a state
depository;
(B) has its main office or a branch office in this
state; and
(C) has a capital stock and permanent surplus of
$5 million or more;
(2) the Texas Treasury Safekeeping Trust Company;
(3) a Federal Reserve Bank or a branch of a Federal
Reserve Bank; [or]
(4) a federal home loan bank; or[.]
(5) a financial institution authorized to exercise
fiduciary powers that is designated by the comptroller as a
custodian pursuant to Section 404.031(e).