Bill Text: TX HB3125 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the investment authority of an independent school district.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-04-25 - Withdrawn from schedule [HB3125 Detail]
Download: Texas-2019-HB3125-Introduced.html
| 86R11080 MEW-D | ||
| By: Middleton | H.B. No. 3125 | |
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| relating to the investment authority of an independent school | ||
| district. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 2256.0204, Government Code, is amended | ||
| by amending Subsections (c), (d), (e), and (g) and adding | ||
| Subsection (c-1) to read as follows: | ||
| (c) In addition to authorized investments permitted by this | ||
| subchapter, an independent school district subject to this section | ||
| may purchase, sell, and invest its funds and funds under its control | ||
| in: | ||
| (1) corporate bonds that, at the time of purchase, are | ||
| rated by a nationally recognized investment rating firm "AA-" or | ||
| the equivalent and have a stated final maturity that is not later | ||
| than the third anniversary of the date the corporate bonds were | ||
| purchased; and | ||
| (2) any other kind of investment that a prudent | ||
| investor, exercising reasonable care, skill, and caution, would | ||
| acquire or retain in light of the purposes, terms, distribution | ||
| requirements, and other circumstances of the district's funds or | ||
| funds under its control then prevailing, taking into consideration | ||
| the investment of all of the district's funds and funds under its | ||
| control rather than a single investment. | ||
| (c-1) To the extent the investment standard of care provided | ||
| by Subsection (c)(2) conflicts with the standard of care provided | ||
| by Section 2256.006, the standard of care provided by Subsection | ||
| (c)(2) applies with regard to investments authorized by that | ||
| subdivision. | ||
| (d) An independent school district subject to this section | ||
| is not authorized by this section to: | ||
| (1) invest in the aggregate more than 15 percent of its | ||
| monthly average fund balance, excluding bond proceeds, reserves, | ||
| and other funds held for the payment of debt service, in corporate | ||
| bonds or other kinds of investments authorized by Subsection | ||
| (c)(2); or | ||
| (2) invest more than 25 percent of the funds invested | ||
| in corporate bonds in any one domestic business entity, including | ||
| subsidiaries and affiliates of the entity. | ||
| (e) An independent school district subject to this section | ||
| may purchase, sell, and invest its funds and funds under its control | ||
| in corporate bonds or other kinds of investments authorized by | ||
| Subsection (c)(2) if the governing body of the district: | ||
| (1) amends its investment policy to authorize | ||
| corporate bonds or other kinds of investments authorized by | ||
| Subsection (c)(2) as an eligible investment; | ||
| (2) adopts procedures to provide for: | ||
| (A) monitoring rating changes in corporate bonds | ||
| acquired with public funds; and | ||
| (B) liquidating the investment in corporate | ||
| bonds or other kinds of investments authorized by Subsection | ||
| (c)(2); and | ||
| (3) identifies the funds eligible to be invested in | ||
| corporate bonds or other kinds of investments authorized by | ||
| Subsection (c)(2). | ||
| (g) Corporate bonds or other kinds of investments | ||
| authorized by Subsection (c)(2) are not an eligible investment for | ||
| a public funds investment pool. | ||
| SECTION 2. 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. | ||
