| 1 | 1 | | 88R11339 MEW-D |
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| 2 | 2 | | By: Middleton S.B. No. 2339 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the investment or deposit of school district reserve |
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| 8 | 8 | | funds and the establishment of a school reserves investment fund. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter E, Chapter 45, Education Code, is |
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| 11 | 11 | | amended by adding Section 45.114 to read as follows: |
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| 12 | 12 | | Sec. 45.114. SCHOOL DISTRICT RESERVE FUNDS. (a) |
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| 13 | 13 | | Notwithstanding Chapter 2256, Government Code, or any other |
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| 14 | 14 | | provision of law, with respect to reserve funds held by a school |
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| 15 | 15 | | district, the district may only: |
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| 16 | 16 | | (1) invest those funds in the school reserves |
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| 17 | 17 | | investment fund established under Section 403.1031, Government |
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| 18 | 18 | | Code; or |
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| 19 | 19 | | (2) deposit those funds in a depository bank of the |
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| 20 | 20 | | district under Subchapter G. |
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| 21 | 21 | | (b) The commissioner may adopt rules providing guidance to |
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| 22 | 22 | | districts regarding a district's determination of its reserve funds |
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| 23 | 23 | | for purposes of this section. |
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| 24 | 24 | | SECTION 2. Subchapter G, Chapter 403, Government Code, is |
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| 25 | 25 | | amended by adding Section 403.1031 to read as follows: |
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| 26 | 26 | | Sec. 403.1031. SCHOOL RESERVES INVESTMENT FUND. (a) The |
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| 27 | 27 | | school reserves investment fund is a trust fund outside the state |
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| 28 | 28 | | treasury that is administered by the comptroller. |
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| 29 | 29 | | (b) The fund consists of: |
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| 30 | 30 | | (1) money of this state that is appropriated to the |
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| 31 | 31 | | comptroller for deposit in the fund and subsequent investment; |
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| 32 | 32 | | (2) money provided by school districts for deposit in |
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| 33 | 33 | | the fund and subsequent investment; and |
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| 34 | 34 | | (3) earnings on investments of fund money. |
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| 35 | 35 | | (c) The comptroller may use fund money only to: |
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| 36 | 36 | | (1) make investments as described by Subsection (d); |
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| 37 | 37 | | and |
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| 38 | 38 | | (2) repay the principal of and pay interest on |
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| 39 | 39 | | investments made using fund money. |
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| 40 | 40 | | (d) For the purpose of investing the assets of the school |
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| 41 | 41 | | reserves investment fund, subject to Subsection (e), the |
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| 42 | 42 | | comptroller may acquire, exchange, sell, supervise, manage, or |
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| 43 | 43 | | retain any kind of investment that a prudent investor exercising |
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| 44 | 44 | | reasonable care, skill, and caution would acquire, exchange, sell, |
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| 45 | 45 | | supervise, manage, or retain in light of the purposes, terms, |
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| 46 | 46 | | distribution requirements, and other circumstances then prevailing |
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| 47 | 47 | | for the fund, taking into consideration the investment of all the |
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| 48 | 48 | | assets of the fund rather than a single investment. |
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| 49 | 49 | | (e) The comptroller must comply with Chapter 809 in |
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| 50 | 50 | | investing the assets of the school reserves investment fund under |
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| 51 | 51 | | Subsection (d). |
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| 52 | 52 | | (f) The comptroller shall use fund money to repay a school |
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| 53 | 53 | | district's or the state's investment in the fund and pay any |
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| 54 | 54 | | interest on that investment. |
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| 55 | 55 | | (g) The comptroller shall annually submit a report to the |
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| 56 | 56 | | governor, the lieutenant governor, the speaker of the house of |
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| 57 | 57 | | representatives, and each member of the legislature. The report |
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| 58 | 58 | | must include information regarding: |
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| 59 | 59 | | (1) the total amount of money held in the fund; |
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| 60 | 60 | | (2) the return on investments made with fund money; |
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| 61 | 61 | | and |
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| 62 | 62 | | (3) the overall health of the fund portfolio. |
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| 63 | 63 | | SECTION 3. This Act takes effect September 1, 2023. |
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