S.B. No. 1304


Bill Description

Governor Bush signed SB 1304 on May 31, 1997. SB 1304 becomes effective on September 1, 1997.

SB 1304 makes a number of changes to Chapter 117 of the Local Government Code having to do with investment of funds in the registry of the court. SB 1304 permits funds held in the registry of the court under Tex. Prop. Code Section 142.004 (which is amended by SB 1304) and Texas Probate Code Section 887 (which is amended by HB 1126) to be invested in more versatile investments. The permitted investments include:

(1) interest-bearing deposits in a financial institution doing business in this state that is insured by the Federal Deposit Insurance Corporation;

(2) United States treasury bills;

(3) an eligible interlocal investment pool that meets the requirements of Sections 2256.016, 2256.017, and 2256.019, Government Code; or

(4) a no-load money market mutual fund, if the fund:

(A) is regulated by the Securities and Exchange Commission;

(B) has a dollar weighted average stated maturity of 90 days or fewer; and

(C) includes in its investment objectives the maintenance of a stable net asset value of $1 for each share.

The House Judicial Affairs Committee Report on SB 1304 states:

Currently, Texas law is unclear in specifying how court clerks are to invest and account for registry funds accounts that are deposited with the court. Texas law requires investments to be made only with a financial institution insured under the FDIC. Due to the $100,000 limitation for FDIC institutions, a clerk who receives more than $100,000 in one transaction to be invested for a minor must divide the money into several FDIC institutions for investment. This can be cumbersome or even impossible in smaller counties. Additionally, there are no clear statutory directives for clerks in handling interplead funds, which can total millions of dollars, other than to deposit the funds into a county depository which may not earn interest. This bill will provide new regulations regarding funds tendered into the registry of the court.

Copyright 1997 by Glenn M. Karisch. This page was last revised on June 16, 1997.