S.B. No. 1138
AN ACT
relating to securities contracts entered into by the Texas Treasury
Safekeeping Trust Company.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 404.103, Government Code, is amended by
amending Subsection (b) and adding Subsection (b-1) to read as
follows:
(b) The trust company may enter into contracts, trust
agreements, or other fiduciary instruments with the comptroller,
the Federal Reserve System, a depository trust company, and other
third parties. The trust company shall be liable under those
contracts in accordance with the terms contained in the contracts.
Notwithstanding any other statute to the contrary, to the extent
permitted by the Texas Constitution and the contracts, trust
agreements, or other fiduciary instruments between the trust
company, the Federal Reserve System, and a depository trust
company, the trust company's obligations shall be guaranteed by the
state, and the state expressly waives all defenses of governmental
immunity by and on behalf of the trust company, the comptroller, and
the state, and expressly consents to sue and be sued in federal
court or in any court of competent jurisdiction. However, this
provision does not alter or affect the immunity accorded to state
officials and employees under state law. The trust company may
enter into contracts with the comptroller and the Federal Reserve
System to provide any services that the Federal Reserve System
makes available, including:
(1) safekeeping book-entry United States Treasury and
agency securities owned by the state and its agencies;
(2) using the federal reserve wire transfer system to
transfer money and book-entry securities and to settle securities
transactions involving book-entry United States Treasury and
agency securities owned by the state and its agencies;
(3) collecting, through the Federal Reserve System,
checks deposited with the treasury;
(4) receiving payments from and making payments to the
federal government on behalf of the state and its agencies;
(5) originating automated clearinghouse transactions
or other electronic transfers to make payments on behalf of the
state and its agencies, collecting revenues due the state and its
agencies, and transferring money between state depositories;
(6) paying warrants drawn on the treasury and
presented through the Federal Reserve System for payment; and
(7) safekeeping collateral pledged to secure deposits
of public funds.
(b-1) In this subsection, "securities contract" includes
direct security repurchase agreements, reverse security repurchase
agreements, and related custody agreements. The trust company may
enter into trust agreements, fiduciary instruments, or other
contracts as principal or as trustee, with the comptroller and
other third parties. The trust company shall be liable under the
agreements, instruments, or contracts in accordance with the terms
contained in the agreements, instruments, or contracts.
Notwithstanding any other statute to the contrary, to the extent
permitted by the Texas Constitution and the contracts, the trust
company's obligations under securities contracts between the trust
company and third parties shall be guaranteed by the state with, and
only to the extent of, the reserve balances held by the trust
company under Section 404.105, and for those securities contracts,
the state expressly waives all defenses of governmental immunity by
and on behalf of the trust company, and expressly consents by and on
behalf of the trust company to sue and be sued in federal court or in
any court of competent jurisdiction. However, this provision does
not alter or affect the immunity accorded to state officials and
employees under state law.
SECTION 2. Section 404.104(b), Government Code, is amended
to read as follows:
(b) The comptroller may enter into contracts, trust
agreements, and other instruments with the trust company as
provided by Section 404.103 [404.103(b)].
SECTION 3. The changes in law made by this Act apply only to
an agreement, instrument, or contract entered into on or after the
effective date of this Act. An agreement, instrument, or contract
entered into before the effective date of this Act is subject to the
law in effect on the date that the agreement, instrument, or
contract was entered into, and that law is continued in effect for
that purpose.
SECTION 4. 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, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1138 passed the Senate on
April 26, 2019, by the following vote: Yeas 30, Nays 0; and that
the Senate concurred in House amendment on May 25, 2019, by the
following vote: Yeas 30, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1138 passed the House, with
amendment, on May 22, 2019, by the following vote: Yeas 135,
Nays 9, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor