88R11339 MEW-D
By: Middleton S.B. No. 2339
A BILL TO BE ENTITLED
AN ACT
relating to the investment or deposit of school district reserve
funds and the establishment of a school reserves investment fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 45, Education Code, is
amended by adding Section 45.114 to read as follows:
Sec. 45.114. SCHOOL DISTRICT RESERVE FUNDS. (a)
Notwithstanding Chapter 2256, Government Code, or any other
provision of law, with respect to reserve funds held by a school
district, the district may only:
(1) invest those funds in the school reserves
investment fund established under Section 403.1031, Government
Code; or
(2) deposit those funds in a depository bank of the
district under Subchapter G.
(b) The commissioner may adopt rules providing guidance to
districts regarding a district's determination of its reserve funds
for purposes of this section.
SECTION 2. Subchapter G, Chapter 403, Government Code, is
amended by adding Section 403.1031 to read as follows:
Sec. 403.1031. SCHOOL RESERVES INVESTMENT FUND. (a) The
school reserves investment fund is a trust fund outside the state
treasury that is administered by the comptroller.
(b) The fund consists of:
(1) money of this state that is appropriated to the
comptroller for deposit in the fund and subsequent investment;
(2) money provided by school districts for deposit in
the fund and subsequent investment; and
(3) earnings on investments of fund money.
(c) The comptroller may use fund money only to:
(1) make investments as described by Subsection (d);
and
(2) repay the principal of and pay interest on
investments made using fund money.
(d) For the purpose of investing the assets of the school
reserves investment fund, subject to Subsection (e), the
comptroller may acquire, exchange, sell, supervise, manage, or
retain any kind of investment that a prudent investor exercising
reasonable care, skill, and caution would acquire, exchange, sell,
supervise, manage, or retain in light of the purposes, terms,
distribution requirements, and other circumstances then prevailing
for the fund, taking into consideration the investment of all the
assets of the fund rather than a single investment.
(e) The comptroller must comply with Chapter 809 in
investing the assets of the school reserves investment fund under
Subsection (d).
(f) The comptroller shall use fund money to repay a school
district's or the state's investment in the fund and pay any
interest on that investment.
(g) The comptroller shall annually submit a report to the
governor, the lieutenant governor, the speaker of the house of
representatives, and each member of the legislature. The report
must include information regarding:
(1) the total amount of money held in the fund;
(2) the return on investments made with fund money;
and
(3) the overall health of the fund portfolio.
SECTION 3. This Act takes effect September 1, 2023.