Texas Senate Bill SB581

Texas 2013 - 83rd Regular

Caption

Relating to procedures for securing the deposit of public funds.

Impact

The implications of SB581 stretch into the realm of state financial management and accountability. With clearer procedures outlined for custodians, public entities can expect greater assurance that their funds are managed with integrity and efficiency. The requirements for custodians to maintain a current list of all pledged investment securities enhances transparency, empowering public entities with the knowledge of their financial securities' status. This move towards standardized procedures is seen as a step to bolster confidence in public fund management.

Summary

Senate Bill 581 establishes new procedures for securing the deposit of public funds in Texas. Primarily, the bill amends Section 2257.045 of the Government Code to clarify the responsibilities of custodians when handling investment securities that are pledged as security for public entity deposits. It mandates that custodians promptly identify and record such securities, ensuring transparency and accountability in the management of public funds. Additionally, custodians are required to issue a trust receipt upon receiving a pledged security, effectively formalizing the relationship between the custodian and the public entity.

Contention

Although SB581 aims to provide consistency in securing public funds, potential points of contention may arise concerning the operational burdens placed on custodians and public entities. Critics might argue that the additional administrative requirements could lead to increased costs or complexity in financial transactions. Furthermore, debates may emerge regarding the effectiveness of these measures in preventing mismanagement or fraud, and whether the regulations adequately address the unique needs and practices of various public entities involved in fund management.