Texas Senate Bill SB1138

Texas 2019 - 86th Regular

Caption

Relating to securities contracts entered into by the Texas Treasury Safekeeping Trust Company.

Impact

The passage of SB1138 is expected to have significant implications on state laws regarding governmental financial transactions. By clearly outlining the parameters under which the Texas Treasury Safekeeping Trust Company can operate, this bill enables more efficient handling of public funds and securities. Furthermore, the state guarantees the trust company’s obligations under these contracts, which is a notable shift in how government immunity is approached within financial dealings, allowing for suits in federal court if necessary.

Summary

SB1138 primarily focuses on allowing the Texas Treasury Safekeeping Trust Company to enter into various types of contracts and agreements with the comptroller, the Federal Reserve System, and other entities. The bill includes detailed provisions concerning the trust company’s authority over securities contracts, which now encompass direct security repurchase agreements and related custody agreements. This expansion of authority aims to facilitate the trust company's ability to manage state funds securely and effectively.

Sentiment

The sentiment around SB1138 has been largely supportive, especially among lawmakers and financial oversight entities who see it as a necessary measure to modernize the state’s financial management practices. The establishment of clearer guidelines and enhanced liability provisions is viewed as a positive step toward greater transparency and accountability in governmental financial transactions.

Contention

However, the bill does raise questions regarding the implications of waiving certain governmental immunities. Critics argue that such waivers, while aimed at enhancing liability clarity, can expose the state to increased risk in financial transactions. The discussions leading up to the bill’s passage highlighted differing viewpoints on balancing financial flexibility and risk management, particularly in light of public transparency and accountability concerns.