Texas 2019 - 86th Regular

Texas House Bill HB3125 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R11080 MEW-D
2	2	By: Middleton H.B. No. 3125
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the investment authority of an independent school
8	8	district.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2256.0204, Government Code, is amended
11	11	by amending Subsections (c), (d), (e), and (g) and adding
12	12	Subsection (c-1) to read as follows:
13	13	(c) In addition to authorized investments permitted by this
14	14	subchapter, an independent school district subject to this section
15	15	may purchase, sell, and invest its funds and funds under its control
16	16	in:
17	17	(1) corporate bonds that, at the time of purchase, are
18	18	rated by a nationally recognized investment rating firm "AA-" or
19	19	the equivalent and have a stated final maturity that is not later
20	20	than the third anniversary of the date the corporate bonds were
21	21	purchased; and
22	22	(2) any other kind of investment that a prudent
23	23	investor, exercising reasonable care, skill, and caution, would
24	24	acquire or retain in light of the purposes, terms, distribution
25	25	requirements, and other circumstances of the district's funds or
26	26	funds under its control then prevailing, taking into consideration
27	27	the investment of all of the district's funds and funds under its
28	28	control rather than a single investment.
29	29	(c-1) To the extent the investment standard of care provided
30	30	by Subsection (c)(2) conflicts with the standard of care provided
31	31	by Section 2256.006, the standard of care provided by Subsection
32	32	(c)(2) applies with regard to investments authorized by that
33	33	subdivision.
34	34	(d) An independent school district subject to this section
35	35	is not authorized by this section to:
36	36	(1) invest in the aggregate more than 15 percent of its
37	37	monthly average fund balance, excluding bond proceeds, reserves,
38	38	and other funds held for the payment of debt service, in corporate
39	39	bonds or other kinds of investments authorized by Subsection
40	40	(c)(2); or
41	41	(2) invest more than 25 percent of the funds invested
42	42	in corporate bonds in any one domestic business entity, including
43	43	subsidiaries and affiliates of the entity.
44	44	(e) An independent school district subject to this section
45	45	may purchase, sell, and invest its funds and funds under its control
46	46	in corporate bonds or other kinds of investments authorized by
47	47	Subsection (c)(2) if the governing body of the district:
48	48	(1) amends its investment policy to authorize
49	49	corporate bonds or other kinds of investments authorized by
50	50	Subsection (c)(2) as an eligible investment;
51	51	(2) adopts procedures to provide for:
52	52	(A) monitoring rating changes in corporate bonds
53	53	acquired with public funds; and
54	54	(B) liquidating the investment in corporate
55	55	bonds or other kinds of investments authorized by Subsection
56	56	(c)(2); and
57	57	(3) identifies the funds eligible to be invested in
58	58	corporate bonds or other kinds of investments authorized by
59	59	Subsection (c)(2).
60	60	(g) Corporate bonds or other kinds of investments
61	61	authorized by Subsection (c)(2) are not an eligible investment for
62	62	a public funds investment pool.
63	63	SECTION 2. This Act takes effect immediately if it receives
64	64	a vote of two-thirds of all the members elected to each house, as
65	65	provided by Section 39, Article III, Texas Constitution. If this
66	66	Act does not receive the vote necessary for immediate effect, this
67	67	Act takes effect September 1, 2019.