HBA-SEB S.B. 736 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 736
By: Armbrister
Natural Resources
4/21/1999
Engrossed



BACKGROUND AND PURPOSE 

Under current law, the board of directors of a nonprofit water supply or
sewer service corporation (board) has limited investment options.  The
board may invest in bonds, a savings account, or share or share accounts in
a savings and loan association.  S.B. 736 authorizes nonprofit water supply
and sewer service corporations to invest in any investment that is an
authorized investment for a governmental entity.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends the heading to Section 67.014, Water Code, as follows:

 Sec. 67.014.  New title:  DEPOSITORY FOR FUNDS; PERMITTED INVESTMENTS.

SECTION 2. Amends Section 67.014(b), Water Code, to create an additional
investment option for funds  allocated by the board of directors of a water
supply or sewer service corporation (board) to a sinking fund for
replacement, amortization of debts, and the payment of interest that are
not required to be spent in the year in which deposited.  Requires the
funds, if not invested in another manner that is already established, to be
invested in an investment that is authorized under Subchapter A, Chapter
2256, Government Code (Authorized Investments for Governmental Entities),
and by a written investment policy approved by the board and that complies
with a written investment strategy approved by the board.  Makes a
conforming change. 

SECTION 3.Emergency clause.
  Effective date: upon passage.