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A BILL TO BE ENTITLED
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AN ACT
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relating to the investment or deposit of school district reserve |
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funds and the establishment of a school reserves investment fund. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter E, Chapter 45, Education Code, is |
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amended by adding Section 45.114 to read as follows: |
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Sec. 45.114. SCHOOL DISTRICT RESERVE FUNDS. (a) |
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Notwithstanding Chapter 2256, Government Code, or any other |
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provision of law, with respect to reserve funds held by a school |
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district, the district may only: |
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(1) invest those funds in the school reserves |
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investment fund established under Section 403.1031, Government |
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Code; or |
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(2) deposit those funds in a depository bank of the |
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district under Subchapter G. |
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(b) The commissioner may adopt rules providing guidance to |
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districts regarding a district's determination of its reserve funds |
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for purposes of this section. |
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SECTION 2. Subchapter G, Chapter 403, Government Code, is |
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amended by adding Section 403.1031 to read as follows: |
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Sec. 403.1031. SCHOOL RESERVES INVESTMENT FUND. (a) The |
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school reserves investment fund is a trust fund outside the state |
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treasury that is administered by the comptroller. |
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(b) The fund consists of: |
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(1) money of this state that is appropriated to the |
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comptroller for deposit in the fund and subsequent investment; |
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(2) money provided by school districts for deposit in |
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the fund and subsequent investment; and |
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(3) earnings on investments of fund money. |
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(c) The comptroller may use fund money only to: |
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(1) make investments as described by Subsection (d); |
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and |
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(2) repay the principal of and pay interest on |
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investments made using fund money. |
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(d) For the purpose of investing the assets of the school |
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reserves investment fund, subject to Subsection (e), the |
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comptroller may acquire, exchange, sell, supervise, manage, or |
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retain any kind of investment that a prudent investor exercising |
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reasonable care, skill, and caution would acquire, exchange, sell, |
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supervise, manage, or retain in light of the purposes, terms, |
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distribution requirements, and other circumstances then prevailing |
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for the fund, taking into consideration the investment of all the |
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assets of the fund rather than a single investment. |
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(e) The comptroller must comply with Chapter 809 in |
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investing the assets of the school reserves investment fund under |
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Subsection (d). |
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(f) The comptroller shall use fund money to repay a school |
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district's or the state's investment in the fund and pay any |
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interest on that investment. |
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(g) The comptroller shall annually submit a report to the |
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governor, the lieutenant governor, the speaker of the house of |
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representatives, and each member of the legislature. The report |
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must include information regarding: |
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(1) the total amount of money held in the fund; |
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(2) the return on investments made with fund money; |
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and |
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(3) the overall health of the fund portfolio. |
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SECTION 3. This Act takes effect September 1, 2023. |