Bill Text: TX SB1138 | 2019-2020 | 86th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to securities contracts entered into by the Texas Treasury Safekeeping Trust Company.

Spectrum: Bipartisan Bill

Status: (Passed) 2019-06-10 - Effective immediately [SB1138 Detail]

Download: Texas-2019-SB1138-Comm_Sub.html

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By: Watson S.B. No. 1138
(In the Senate - Filed February 26, 2019; March 7, 2019,
read first time and referred to Committee on Finance;
April 16, 2019, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 13, Nays 0; April 16, 2019,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1138 By: Watson

A BILL TO BE ENTITLED
AN ACT
relating to security instruments entered into by the Texas Treasury
Safekeeping Trust Company.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 404.103(b), Government Code, is amended
to read as follows:
(b) The trust company may enter into contracts, trust
agreements, or other fiduciary instruments with the comptroller,
the Federal Reserve System, a depository trust company, and other
third parties. The trust company shall be liable under those
contracts in accordance with the terms contained in the contracts.
Notwithstanding any other statute to the contrary, to the extent
permitted by the Texas Constitution and the contracts, trust
agreements, or other fiduciary instruments between the trust
company, the Federal Reserve System, and a depository trust
company, the trust company's obligations shall be guaranteed by the
state, and the state expressly waives all defenses of governmental
immunity by and on behalf of the trust company, the comptroller, and
the state, and expressly consents to sue and be sued in federal
court or in any court of competent jurisdiction. Notwithstanding
any other statute to the contrary, to the extent permitted by the
Texas Constitution and the securities instruments between the trust
company and third parties, the trust company's obligations shall be
guaranteed only by the reserve balances held by the trust company
under Section 404.105, and the state expressly waives all defenses
of governmental immunity by and on behalf of the trust company, and
the state expressly consents by and on behalf of the trust company
to sue and be sued in federal court or in any court of competent
jurisdiction. However, this provision does not alter or affect the
immunity accorded to state officials and employees under state law.
The trust company may enter into contracts with the comptroller and
the Federal Reserve System to provide any services that the Federal
Reserve System makes available, including:
(1) safekeeping book-entry United States Treasury and
agency securities owned by the state and its agencies;
(2) using the federal reserve wire transfer system to
transfer money and book-entry securities and to settle securities
transactions involving book-entry United States Treasury and
agency securities owned by the state and its agencies;
(3) collecting, through the Federal Reserve System,
checks deposited with the treasury;
(4) receiving payments from and making payments to the
federal government on behalf of the state and its agencies;
(5) originating automated clearinghouse transactions
or other electronic transfers to make payments on behalf of the
state and its agencies, collecting revenues due the state and its
agencies, and transferring money between state depositories;
(6) paying warrants drawn on the treasury and
presented through the Federal Reserve System for payment; and
(7) safekeeping collateral pledged to secure deposits
of public funds.
SECTION 2. The changes in law made by this Act apply only to
a security instrument entered into on or after the effective date of
this Act. A security instrument entered into before the effective
date of this Act is subject to the law in effect on the date that the
security was entered into, and that law is continued in effect for
that purpose.
SECTION 3. 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.
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