Bill Text: TX HB3751 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to the use of certain letters of credit as related to the deposit and investment of public funds.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-03-25 - Referred to Investments & Financial Services [HB3751 Detail]
Download: Texas-2013-HB3751-Introduced.html
83R6199 CJC-F | ||
By: Farrar | H.B. No. 3751 |
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relating to the use of certain letters of credit as related to the | ||
deposit and investment of public funds. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 2256.009, Government Code, is amended to | ||
read as follows: | ||
Sec. 2256.009. AUTHORIZED INVESTMENTS: OBLIGATIONS OF, OR | ||
GUARANTEED BY GOVERNMENTAL ENTITIES. (a) Except as provided by | ||
Subsection (b), the following are authorized investments under this | ||
subchapter: | ||
(1) obligations[ |
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United States or its agencies and instrumentalities; | ||
(2) direct obligations of this state or its agencies | ||
and instrumentalities; | ||
(3) collateralized mortgage obligations directly | ||
issued by a federal agency or instrumentality of the United States, | ||
the underlying security for which is guaranteed by an agency or | ||
instrumentality of the United States; | ||
(4) other obligations, the principal and interest of | ||
which are unconditionally guaranteed or insured by, or backed by | ||
the full faith and credit of, this state or the United States or | ||
their respective agencies and instrumentalities, including | ||
obligations that are fully guaranteed or insured by the Federal | ||
Deposit Insurance Corporation or by the explicit full faith and | ||
credit of the United States; | ||
(5) obligations of states, agencies, counties, | ||
cities, and other political subdivisions of any state rated as to | ||
investment quality by a nationally recognized investment rating | ||
firm not less than A or its equivalent; and | ||
(6) bonds issued, assumed, or guaranteed by the State | ||
of Israel. | ||
(b) The following are not authorized investments under this | ||
section: | ||
(1) obligations whose payment represents the coupon | ||
payments on the outstanding principal balance of the underlying | ||
mortgage-backed security collateral and pays no principal; | ||
(2) obligations whose payment represents the | ||
principal stream of cash flow from the underlying mortgage-backed | ||
security collateral and bears no interest; | ||
(3) collateralized mortgage obligations that have a | ||
stated final maturity date of greater than 10 years; [ |
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(4) collateralized mortgage obligations the interest | ||
rate of which is determined by an index that adjusts opposite to the | ||
changes in a market index; and | ||
(5) letters of credit that are an obligation of the | ||
United States or its agencies or instrumentalities. | ||
SECTION 2. Section 2257.002(5), Government Code, is amended | ||
to read as follows: | ||
(5) "Investment security" means: | ||
(A) an obligation, including a letter of credit, | ||
that in the opinion of the attorney general of the United States is | ||
a general obligation of the United States and backed by its full | ||
faith and credit; | ||
(B) a general or special obligation issued by a | ||
public agency that is payable from taxes, revenues, or a | ||
combination of taxes and revenues; or | ||
(C) a security in which a public entity may | ||
invest under Subchapter A, Chapter 2256. | ||
SECTION 3. The change in law made by this Act to Section | ||
2256.009, Government Code, applies only to an investment of public | ||
funds by a governmental entity made on or after the effective date | ||
of this Act. An investment of public funds made by a governmental | ||
entity before the effective date of this Act is governed by the law | ||
in effect on the date the investment was made, and the former law is | ||
continued in effect for that purpose. | ||
SECTION 4. This Act takes effect September 1, 2013. |