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Status: (Introduced - Dead) 2019-04-25 - Withdrawn from schedule [HB3125 Detail]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. |