Texas House Bill HB2349

Texas 2011 - 82nd Regular

• Out of House Committee: 4/12/11
• Report Pass: 4/5/11

Caption

Relating to the authority of independent school districts to invest in corporate bonds.

Impact

If enacted, HB2349 would impact state laws concerning the investment capabilities of independent school districts, creating a framework for them to diversify their investment portfolios. This could enable districts to increase their revenue and financial stability through investments that were previously restricted, offering them more flexibility in managing their finances while adhering to investment standards. The bill emphasizes responsible investment by stipulating that eligible securities must have a favorable rating and a maturity date not exceeding three years from the investment date.

Summary

House Bill 2349 aims to expand the investment authority of independent school districts in Texas by allowing them to invest in corporate bonds. This legislative move modifies the Government Code to include corporate bonds, debentures, or similar debt obligations as authorized investments, provided they meet certain criteria, such as having a high credit rating from a nationally recognized investment rating firm. This change seeks to enhance the financial strategies available to school districts, potentially leading to better funding for educational activities and services.

Contention

There may be points of contention regarding the increased investment authority granted to school districts. Critics could argue that allowing school districts to invest in corporate bonds presents risks associated with market volatility and may divert focus from traditional funding mechanisms. Supporters, on the other hand, may contend that this legislative change opens up new revenue streams, enhances financial management, and aligns school districts with practices used in the private sector. Ultimately, the discourse surrounding HB2349 could center on balancing investment opportunities with the inherent risks and responsibilities of managing public funds.