By: Stephenson H.B. No. 2647
(Senate Sponsor - Taylor of Galveston)
(In the Senate - Received from the House April 24, 2017;
May 4, 2017, read first time and referred to Committee on Business &
Commerce; May 15, 2017, reported favorably by the following vote:
Yeas 9, Nays 0; May 15, 2017, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to authorized investments of public funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2256.009(a), Government Code, is amended
to read as follows:
(a) Except as provided by Subsection (b), the following are
authorized investments under this subchapter:
(1) obligations, including letters of credit, of the
United States or its agencies and instrumentalities;
(2) direct obligations of this state or its agencies
and instrumentalities;
(3) collateralized mortgage obligations directly
issued by a federal agency or instrumentality of the United States,
the underlying security for which is guaranteed by an agency or
instrumentality of the United States;
(4) other obligations, the principal and interest of
which are unconditionally guaranteed or insured by, or backed by
the full faith and credit of, this state or the United States or
their respective agencies and instrumentalities, including
obligations that are fully guaranteed or insured by the Federal
Deposit Insurance Corporation or by the explicit full faith and
credit of the United States;
(5) obligations of states, agencies, counties,
cities, and other political subdivisions of any state rated as to
investment quality by a nationally recognized investment rating
firm not less than A or its equivalent; [and]
(6) bonds issued, assumed, or guaranteed by the State
of Israel;
(7) interest-bearing banking deposits that are
guaranteed or insured by:
(A) the Federal Deposit Insurance Corporation or
its successor; or
(B) the National Credit Union Share Insurance
Fund or its successor; and
(8) interest-bearing banking deposits other than
those described by Subdivision (7) if:
(A) the funds invested in the banking deposits
are invested through:
(i) a broker with a main office or branch
office in this state that the investing entity selects from a list
the governing body or designated investment committee of the entity
adopts as required by Section 2256.025; or
(ii) a depository institution with a main
office or branch office in this state that the investing entity
selects;
(B) the broker or depository institution
selected as described by Paragraph (A) arranges for the deposit of
the funds in the banking deposits in one or more federally insured
depository institutions, regardless of where located, for the
investing entity's account;
(C) the full amount of the principal and accrued
interest of the banking deposits is insured by the United States or
an instrumentality of the United States; and
(D) the investing entity appoints as the entity's
custodian of the banking deposits issued for the entity's account:
(i) the depository institution selected as
described by Paragraph (A);
(ii) an entity described by Section
2257.041(d); or
(iii) a clearing broker dealer registered
with the Securities and Exchange Commission and operating under
Securities and Exchange Commission Rule 15c3-3 (17 C.F.R. Section
240.15c3-3).
SECTION 2. The changes in law made by this Act apply only to
authorized investments of public funds governed by Section
2256.009, Government Code, as amended by this Act, that are made on
or after the effective date of this Act. An authorized investment
of public funds made before the effective date of this Act is
governed by the law in effect immediately before that date, and that
law is continued in effect for that purpose.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2017.
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