S.B. No. 1138

	AN ACT
	relating to securities contracts 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, Government Code, is amended by
	amending Subsection (b) and adding Subsection (b-1) 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.  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.
	(b-1)  In this subsection, "securities contract" includes
	direct security repurchase agreements, reverse security repurchase
	agreements, and related custody agreements. The trust company may
	enter into trust agreements, fiduciary instruments, or other
	contracts as principal or as trustee, with the comptroller and
	other third parties. The trust company shall be liable under the
	agreements, instruments, or contracts in accordance with the terms
	contained in the agreements, instruments, or contracts.
	Notwithstanding any other statute to the contrary, to the extent
	permitted by the Texas Constitution and the contracts, the trust
	company's obligations under securities contracts between the trust
	company and third parties shall be guaranteed by the state with, and
	only to the extent of, the reserve balances held by the trust
	company under Section 404.105, and for those securities contracts,
	the state expressly waives all defenses of governmental immunity by
	and on behalf of the trust company, and 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.
	SECTION 2.  Section 404.104(b), Government Code, is amended
	to read as follows:
	(b)  The comptroller may enter into contracts, trust
	agreements, and other instruments with the trust company as
	provided by Section 404.103 [404.103(b)].
	SECTION 3.  The changes in law made by this Act apply only to
	an agreement, instrument, or contract entered into on or after the
	effective date of this Act.  An agreement, instrument, or contract
	entered into before the effective date of this Act is subject to the
	law in effect on the date that the agreement, instrument, or
	contract was entered into, and that law is continued in effect for
	that purpose.
	SECTION 4.  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.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1138 passed the Senate on
	April 26, 2019, by the following vote: Yeas 30, Nays 0; and that
	the Senate concurred in House amendment on May 25, 2019, by the
	following vote: Yeas 30, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1138 passed the House, with
	amendment, on May 22, 2019, by the following vote: Yeas 135,
	Nays 9, two present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor