CHAPTER 116. DEPOSITORIES FOR COUNTY PUBLIC FUNDS - Texas Statutes

LOCAL GOVERNMENT CODE

TITLE 4. FINANCES

SUBTITLE B. COUNTY FINANCES

CHAPTER 116. DEPOSITORIES FOR COUNTY PUBLIC FUNDS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 116.001. DEFINITIONS. In this chapter:

(1) "Bank" means a:

(A) bank organized under the laws of this state, another state,

or federal law that has its main office or a branch office in

this state; or

(B) savings and loan association or savings bank organized under

the laws of this state, another state, or federal law that has

its main office or a branch office in this state.

(2) "Demand deposit" means a deposit of funds that may be

withdrawn on the demand of the depositor.

(3) "Time deposit" means a deposit of funds subject to a

contract between the depositor and the depository under which the

depositor may not withdraw any of the funds by check or by

another manner until the expiration of a certain period following

written notice of the depositor's intent to withdraw the funds.

(4) "Subdepository bank" means an authorized bank, other than a

depository, that holds demand deposits, not exceeding the Federal

Deposit Insurance Corporation's limit, of a district, county, or

precinct officer.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., ch. 527, Sec. 1, eff. Sept. 1,

1991; Acts 1993, 73rd Leg., ch. 234, Sec. 4, eff. Sept. 1, 1993;

Acts 1999, 76th Leg., ch. 344, Sec. 5.009, eff. Sept. 1, 1999.

Sec. 116.002. MONEY AFFECTED. (a) This chapter applies to

money collected or held by a district, county, or precinct

officer in a county and by the officers of a defined district or

subdivision in the county, including the funds of a municipal or

quasi-municipal subdivision or corporation that has the power to

select its own depository but has not done so. The money shall be

deposited under this chapter, and the money shall be considered

in fixing, and is protected by, a county depository's bond.

(b) Warrants, checks, and vouchers evidencing the money

deposited in the county depository under Subsection (a) are

subject to audit and countersignature as provided by law.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER B. ESTABLISHMENT OF DEPOSITORY

Sec. 116.021. DEPOSITORY AND SUBDEPOSITORY CONTRACTS. (a) The

commissioners court of a county shall select by the process

provided by this subchapter or by Subchapter C, Chapter 262, one

or more banks in the county and enter a contract with each

selected bank for the deposit of the county's public funds. The

county shall contract with a bank under this section for a

two-year or four-year contract term. On expiration of a contract

under this section, the contract may be renewed for two years

under terms negotiated by the commissioners court.

(b) If the contract is for a four-year term, the contract shall

allow the county to establish, on the basis of negotiations with

the bank, new interest rates and financial terms of the contract

that will take effect during the final two years of the four-year

contract.

(c) On the renewal of a contract, the county may negotiate new

interest rates and terms with the bank for the next two years in

the same way and subject to the same conditions as provided by

Subsection (b).

(d) If for any reason a county depository is not selected under

Subsection (a), the commissioners court, at any subsequent time

after 20 days' notice, may select, by the process described by

Section 116.024 or by negotiated bid, one or more depositories in

the same manner as at the regular time.

(e) If the commissioners court selects a depository by the

process provided by Subchapter C, Chapter 262, the depository may

be selected by:

(1) competitive bidding; or

(2) another method under that subchapter that the county is

qualified to use.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., ch. 527, Sec. 2, eff. Sept. 1,

1991; Acts 1995, 74th Leg., ch. 65, Sec. 1, eff. Aug. 28, 1995.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

899, Sec. 1, eff. June 15, 2007.

Sec. 116.022. NOTICE. (a) Once each week for at least 20 days

before the date to submit an application under Section

116.023(a), the county judge shall place over the judge's name in

a newspaper of general circulation in the county a notice that

the commissioners court intends to receive applications from

which to select a depository bank. A notice shall also be posted

at the courthouse door of the county.

(b) If a newspaper is not published in the county, the newspaper

notice shall be placed in a newspaper published in the nearest

county.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1995, 74th Leg., ch. 65, Sec. 2, eff. Aug. 28,

1995.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

899, Sec. 2, eff. June 15, 2007.

Sec. 116.023. APPLICATIONS. (a) A bank in the county that

wants to be a county depository must deliver its application to

the county judge or a designated representative of the judge on

or before a date set by the commissioners court that is no later

than the 60th day before the date of the expiration of the

existing depository contract.

(b) The application must state the amount of the bank's paid-up

capital stock and permanent surplus, and the application must be

accompanied by:

(1) a statement showing the financial condition of the bank on

the date of the application; and

(2) a certified check or cashier's check for at least one-half

percent of the county's revenue for the preceding year.

(c) The certified or cashier's check that accompanies an

application is a good-faith guarantee on the part of the

applicant that if accepted as a county depository it will execute

the bond required under this chapter. If a bank is selected as a

depository and does not provide the bond, the county shall retain

the amount of the check as liquidated damages, and the county

judge shall readvertise for applications, if necessary, to obtain

a depository for the county.

(d) A bank in the county that wants to be a county subdepository

must comply with Subsections (a) and (b)(1). The subdepository's

application must include a proposal outlining its security for

the county public funds to be held in addition to revenue offers.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1989, 71st Leg., ch. 628, Sec. 4, eff. Aug. 28,

1989; Acts 1991, 72nd Leg., ch. 527, Sec. 3, eff. Sept. 1, 1991.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

899, Sec. 3, eff. June 15, 2007.

Sec. 116.024. SELECTION OF DEPOSITORIES AND SUBDEPOSITORIES.

(a) At the meeting at which banks are to be selected as county

depositories, the commissioners court shall:

(1) enter in the minutes of the court all applications filed

with the county judge;

(2) consider all applications; and

(3) select the qualified applicants that offer the most

favorable terms and conditions for the handling of the county

funds.

(b) The commissioners court may reject those applicants whose

management or condition, in the opinion of the commissioners

court, does not warrant placing county funds in their possession.

(c) After selecting one or more county depositories, the

commissioners court shall immediately return the certified checks

of the rejected applicants. The commissioners court shall return

the check of a successful applicant when the applicant executes

and files a depository bond that is approved by the commissioners

court.

(d) The conflict of interests provisions of Section 131.903

apply to the selection of the depositories.

(e) After selecting one or more subdepositories, the

commissioners court shall immediately notify each selected

applicant of its selection. Within 15 days, the selected

applicant must file a bond or other security as approved by the

commissioners court.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., ch. 527, Sec. 4, 5, eff. Sept.

1, 1991; Acts 1993, 73rd Leg., ch. 268, Sec. 29, eff. Sept. 1,

1993.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

899, Sec. 4, eff. June 15, 2007.

Sec. 116.025. DESIGNATION OF DEPOSITORY OR SUBDEPOSITORY. When

security is provided in accordance with Subchapter C and is

approved by the commissioners court, the commissioners court

shall, by an order entered in its minutes, designate the bank as

a depository or subdepository for the funds of the county. The

designation is effective until the end of the 60th day after the

date fixed for the next selection of a depository or

subdepository.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., ch. 527, Sec. 6, eff. Sept. 1,

1991.

Sec. 116.026. APPLICANTS OUTSIDE COUNTY. If no bank located in

the county applies to be designated as the county depository, the

commissioners court may advertise, in the same manner provided by

Section 116.022 for advertising for a depository within the

county, for applications from banks in an adjoining county or any

other county in this state.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.027. SELECTION OF NONAPPLICANT DEPOSITORY. (a) If no

application to be a county depository is submitted, or if all of

the applications are declined, the commissioners court shall

deposit the funds of the county with any one or more banks in the

county or in the adjoining counties in the amounts and for the

periods as the commissioners court considers advisable.

(b) A bank that receives deposits under this section shall

provide security in the manner and form, and subject to the same

conditions, as is required for a depository of county funds. The

penalty of the security must at least equal the total amount of

county funds deposited with the bank.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER C. SECURITY FOR FUNDS HELD BY DEPOSITORY

Sec. 116.051. QUALIFICATION AS DEPOSITORY OR SUBDEPOSITORY.

Within 15 days after the date a bank is selected as a county

depository or subdepository, the bank must qualify as the

depository or subdepository by providing security for the funds

to be deposited by the county with the bank. The depository or

subdepository may secure these funds, at the option of the

commissioners court, by:

(1) personal bond; surety bond; bonds, notes, and other

securities; first mortgages on real property; real property;

certificates of deposit; or a combination of these methods, as

provided by this subchapter; or

(2) investment securities or interests in them as provided by

Chapter 726, Acts of the 67th Legislature, Regular Session, 1981

(Article 2529b-1, Vernon's Texas Civil Statutes).

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1989, 71st Leg., ch. 1, Sec. 15(b), eff. Aug. 28,

1989; Acts 1991, 72nd Leg., ch. 527, Sec. 7, eff. Sept. 1, 1991.

Sec. 116.052. PERSONAL BOND. (a) One or more personal bonds

executed and filed with the commissioners court, payable to the

county judge and the judge's successors in office, qualify as

security under this subchapter if:

(1) the bonds are signed by at least five solvent sureties who

own unencumbered real property in the state that is not exempt

from execution under the constitution and other laws of this

state;

(2) the unencumbered and nonexempt real property owned by the

sureties has a value at least equal to the amount of the bonds;

and

(3) the bonds are approved by the commissioners court.

(b) When a bond is filed for approval with the commissioners

court under Subsection (a), the sureties shall also file a

statement containing:

(1) a description of the unencumbered and nonexempt real

property sufficient to identify it on the ground; and

(2) the value of each tract of real property listed, including

the value of the improvements on the property.

(c) After the commissioners court approves a personal bond, it

shall be filed in the county clerk's office with the statement of

the sureties attached to the bond.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.053. SURETY BOND. (a) One or more bonds issued and

executed by one or more solvent surety companies authorized to do

business in this state, payable to the county judge and the

judge's successors in office and filed with the commissioners

court, qualifies as security under this subchapter if the bond is

approved by the commissioners court.

(b) After the commissioners court approves a surety bond, it

shall be filed in the county clerk's office.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.054. BONDS, NOTES, AND OTHER SECURITIES. (a) A county

depository may pledge with the commissioners court as security

under this subchapter:

(1) a bond, note, security of indebtedness, or other evidence of

indebtedness of the United States if the evidence of indebtedness

is supported by the full faith and credit of the United States or

is guaranteed as to principal and interest by the United States;

(2) a bond of this state or of a county, municipality,

independent school district, or common school district;

(3) a bond issued under the federal farm loan acts;

(4) a road district bond;

(5) a bond, pledge, or other security issued by the board of

regents of The University of Texas System;

(6) bank acceptances of banks having a capital stock of at least

$500,000;

(7) a note or bond secured by mortgages insured and debentures

issued by the Federal Housing Administration;

(8) shares or share accounts of a savings and loan association

organized under the laws of this state or of a federal savings

and loan association domiciled in this state if the payment of

the share or share accounts is insured by the Federal Savings and

Loan Insurance Corporation; or

(9) a bond issued by a municipal corporation in this state.

(b) Securities provided under this section must have a total

market value equal to the amount of the depository bond.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.055. FIRST MORTGAGES ON IMPROVED REAL PROPERTY. (a)

If approved by the commissioners court, closed first mortgages on

improved and unencumbered real property located in this state

that are assigned to the county judge in a duly acknowledged

instrument qualify as security under this subchapter.

(b) Before approving a mortgage as security, the commissioners

court shall require:

(1) a written opinion by an attorney selected by the

commissioners court showing that the lien is superior to any

other claim to or right in the real property; and

(2) insurance approved by the county judge covering the

improvements on each tract of pledged real property and providing

that a loss is payable to the county judge.

(c) An insurance policy required under Subsection (b) must be

issued by a stock fire insurance company or mutual fire insurance

company that has a $100,000 surplus in excess of all legal

reserves and other liabilities.

(d) A mortgage accepted as security under this section shall

immediately be recorded in each county in which part of the real

property is located.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.056. REAL PROPERTY. (a) If approved by the

commissioners court, improved and unencumbered real property,

pledged directly by deed of trust to a trustee selected by the

commissioners court, with the county judge as beneficiary,

qualifies as security under this subchapter.

(b) Before approving real property offered as security, the

commissioners court shall require:

(1) a written opinion by an attorney selected by the

commissioners court showing that the lien is superior to any

other claim to or right in the real property; and

(2) insurance approved by the county judge covering the

improvements on the pledged real property and providing that a

loss is payable to the county judge.

(c) An insurance policy required under Subsection (b) must be

issued by a stock fire insurance company or mutual fire insurance

company that has a $100,000 surplus in excess of all legal

reserves and other liabilities.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.0565. CERTIFICATE OF DEPOSIT. (a) A certificate of

deposit qualifies as security under this subchapter if the

certificate is:

(1) held in the custody of a Federal Reserve Bank for

safekeeping and made the subject of a valid pledge agreement

designating the county as the beneficiary of the pledge

agreement;

(2) insured in full by the Federal Savings and Loan Insurance

Corporation or the Federal Deposit Insurance Corporation;

(3) described in detail by a safekeeping receipt issued to the

county by the Federal Reserve Bank having custody of the

certificates; and

(4) issued with the county as registered owner.

(b) A person to whom presentment of a certificate of deposit

pledged to secure county funds is made may not pay or otherwise

accept the certificate unless the certificate or the safekeeping

receipt required by this section has been endorsed by the county

and the depository.

Added by Acts 1989, 71st Leg., ch. 1, Sec. 15(b), eff. Aug. 28,

1989.

Sec. 116.057. CONDITION OF PERSONAL BOND OR CONTRACT FOR

SECURITIES. (a) A personal bond provided or a contract for the

pledge of securities under this subchapter must be conditioned

that the depository will:

(1) faithfully keep the county funds and faithfully perform all

duties and obligations imposed by law on the depository;

(2) pay all checks drawn on a demand deposit account in a

depository on presentation by the county treasurer;

(3) pay all checks drawn on a time deposit account on

presentation after the expiration of the required period of

notice; and

(4) account for the county funds as required by law.

(b) A suit on a personal bond or a contract for securities

provided or pledged under this subchapter must be tried in the

county for which the depository is selected.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.058. AMOUNT OF SECURITY REQUIRED. (a) Personal or

surety bonds that secure county deposits must be in an amount

equal to the estimated highest daily balance of the county, as

determined by the commissioners court. However, the commissioners

court may not estimate the highest daily balance at an amount

that is less than 75 percent of the highest daily balance of the

county for the preceding year, less the amount of bond funds

received and expended.

(b) Securities pledged to secure county funds on deposit in a

depository must be in an amount equal to the amount of those

funds. However, real property securities may not be required in

an amount greater than 25 percent of the assessed value of the

property in the county, as shown by the certified tax roll for

the preceding year.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.059. VALUATION OF REAL PROPERTY PROVIDED AS SECURITY.

The commissioners court shall investigate all real property

security and determine the value at which the property will be

accepted. The commissioners court may not accept real property as

security at a value greater than 50 percent of the reasonable

market value of the property covered by a mortgage unless the

mortgage is insured or guaranteed by the Federal Housing

Administration.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.060. SECURITY NOT REQUIRED FOR FEDERALLY INSURED

DEPOSITS. A depository is not required to provide security for

the deposit of county funds to the extent the deposits are

insured under 12 U.S.C.A. Sections 1811-1832.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER D. MAINTENANCE AND MODIFICATION OF SECURITY

Sec. 116.081. NEW BOND. (a) The commissioners court may by

written order require a depository to execute a new bond whenever

the commissioners court considers it advisable or considers it

necessary for the protection of the county.

(b) Except for an additional bond required under Section

116.087, if a depository fails for any reason to file the

required new bond within five days after the date the depository

is served with a copy of the order, the commissioners court may

select a new depository in the same manner as it would select a

depository at the regular time.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.082. SUBSTITUTION OF SECURITIES. (a) After reasonable

notice to the commissioners court, a depository is entitled to

substitute one type of security for another or replace particular

securities with others of the same type if the substituting or

replacing security meets the requirements of law and is approved

by the commissioners court. Instead of approval of each

substitute or replacement security by the commissioners court,

the commissioners court may:

(1) adopt a procedure for approving a substitute or replacement

security under this section; and

(2) designate a county employee or official, including a county

judge, to approve the substitute or replacement security under

the procedure adopted under Subdivision (1).

(b) The county judge shall execute the necessary instruments to

transfer to the depository or its order a lien withdrawn from

real property for which another security is substituted.

(c) The commissioners court may direct the manner in which

securities pledged in place of personal or surety bonds are to be

deposited.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 2003, 78th Leg., ch. 742, Sec. 1, eff. June 20,

2003.

Sec. 116.083. RELEASE OF EXCESS SECURITY. If the securities

pledged by a depository to secure county funds exceed the amount

required under this chapter, the commissioners court shall permit

the release of the excess.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.084. INADEQUATE SECURITY. If for any reason the county

funds on deposit with the county depository exceed the amount of

security pledged, the depository shall immediately pledge

additional security with the commissioners court.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.085. SOLVENCY OF PERSONAL SURETY. (a) At least twice

each year while a personal bond securing the county's deposits is

in effect, the commissioners court shall investigate the solvency

of each surety on the bond. The commissioners court may require

the surety to make an itemized and verified financial statement

correctly showing the surety's financial position and, if the

bond requires the surety to own real property, identifying each

tract of real property owned by the surety and stating its value.

(b) The commissioners court shall require a depository to

provide a new bond meeting the requirements of this chapter if a

financial statement provided under Subsection (a) indicates that:

(1) a surety is insolvent;

(2) a surety's net worth is less than the amount required by

this chapter;

(3) the assets listed on the statement are depreciated or their

value is in any way impaired; or

(4) real property required by the bond has been disposed of or

encumbered and the value of the surety's remaining unencumbered

and nonexempt real property is inadequate to meet the

requirements of this chapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.086. SOLVENCY OF SURETY COMPANY AND ADEQUACY OF

SECURITIES. Whenever the commissioners court considers it

necessary for the protection of the county, the commissioners

court may investigate the solvency of a surety company that

issues a bond on behalf of a depository of county funds or

investigate the value of securities pledged by a depository to

secure county funds.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.087. ADDITIONAL BOND. (a) If after a county

establishes a depository the county or a subdivision of the

county receives funds from the sale of bonds or otherwise, at the

next meeting of the commissioners court, or as soon afterward as

is practical, the commissioners court may make written demand on

the depository to provide an additional bond in an amount equal

to the amount of funds received. If county funds derived from the

sale of county securities during the term of a depository bond

are deposited with the depository, the commissioners court shall

require an additional bond in an amount equal to the additional

county funds. The depository shall continue the additional bond

in effect as long as the additional funds remain in the

depository.

(b) The depository may cancel this extra or special bond and

concurrently substitute a new bond for it as the additional funds

are reduced. However, the additional bond must always at least

equal the amount of the additional funds.

(c) If a depository does not provide an additional bond under

Subsection (a) within 30 days after the date the commissioners

court demands the additional bond, the commissioners court may

withdraw the additional funds from the depository by the draft of

the county treasurer and deposit them in a solvent national or

state bank that has a combined capital stock and surplus greater

than the amount of the additional funds. The commissioners court

may leave the additional funds on deposit with this alternative

bank until the county depository files the required additional

bond with the commissioners court, after which the commissioners

court shall redeposit the balance of the additional funds with

the county depository.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.088. RELEASE OF SURETY COMPANY. (a) A surety company

may be relieved of its obligations under a surety bond executed

on behalf of a county depository after the 30th day after the

date it gives written notice to the commissioners court

requesting to be released.

(b) A surety company is not relieved under Subsection (a) of

liability for a loss sustained by the county before the

expiration of the bond.

(c) If a depository's surety company requests to be relieved

from its obligations under Subsection (a), the depository shall

provide further security acceptable to the commissioners court to

secure county funds under this chapter. The depository shall

provide the further security before termination of the surety's

obligations under the bond. The new security shall be filed in

the county clerk's office.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.089. SURRENDER OF INTEREST ON SECURITIES. On the

request of a county depository, the commissioners court shall

surrender, when due, interest coupons or other evidence of

interest on securities deposited by the depository with the

commissioners court if the securities remaining pledged by a

depository are adequate to meet the requirements of the

commissioners court.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

SUBCHAPTER E. DEPOSITORY ACCOUNTS

Sec. 116.111. CHARACTER AND AMOUNT OF DEPOSITS. The

commissioners court may determine and designate the character and

amount of county funds that will be demand deposits and that will

be time deposits. The commissioners court may contract with a

depository for interest on time deposits at any legal rate under

a federal law or under a rule adopted by the board of governors

of the Federal Reserve System or by the board of directors of the

Federal Deposit Insurance Corporation.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.112. INVESTMENT OF FUNDS. (a) The commissioners court

may direct the county treasurer to withdraw any county funds

deposited in a county depository that are not immediately

required to pay obligations of the county and invest those funds

as provided by this section unless such an investment or

withdrawal is prohibited by law or the withdrawal is contrary to

the terms of the depository contract.

(b) The funds may be invested in accordance with Subchapter A,

Chapter 2256, Government Code. In addition to the obligations,

certificates, and agreements described by that Act, the funds may

be invested in certificates of deposit issued by a state or

federal savings and loan association domiciled in this state, the

payment of which is insured in full by the Federal Savings and

Loan Insurance Corporation or its successor.

(c) If a county purchases a security repurchase agreement, the

agreement must be purchased under a master contractual agreement

that specifies the rights and obligations of both parties and

that requires that securities involved in the transaction be held

in a safekeeping account subject to the control and custody of

the county.

(d) Repealed by Acts 1989, 71st Leg., ch. 754, Sec. 2, eff. June

15, 1989.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1989, 71st Leg., ch. 1, Sec. 15(c), eff. Aug. 28,

1989; Acts 1989, 71st Leg., ch. 754, Sec. 1, 2, eff. June 15,

1989; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(11), eff. Sept. 1,

1995.

Sec. 116.113. DEPOSIT OF FUNDS. (a) Immediately after the

commissioners court designates a county depository, the county

treasurer shall transfer to the depository all of the county's

funds and the funds of any district or municipal subdivision of

the county that does not select its own depository. The treasurer

shall also immediately deposit with the depository to the credit

of the county, district, or municipality any money received after

the depository is designated.

(b) A county tax assessor-collector shall immediately deposit in

the county depository taxes collected on behalf of the state, the

county, or a district or municipal subdivision of the county. The

taxes remain on deposit pending the preparation and settlement of

the assessor-collector's report on the tax collections.

(c) If a commissioners court that controls school district funds

elects to transfer the funds during a school year from a county

depository to another bank, the school district may require the

commissioners court to delay the transfer until the earlier of

the end of the school district's current fiscal year or the next

September 1.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.114. COLLECTIONS BY DEPOSITORY. A county depository

shall collect all checks, drafts, and demands for money deposited

with it by the county.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.115. CLEARINGHOUSE FOR MULTIPLE DEPOSITORIES. If the

funds of a county are deposited with more than one depository,

the commissioners court shall by order name one of the

depositories to act as a clearinghouse for the others. All county

warrants are finally payable at the depository named as the

clearinghouse.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.116. OBLIGATIONS PAYABLE AT COUNTY DEPOSITORY. (a) A

county depository shall pay a check or warrant drawn by the

county treasurer against funds deposited with the depository on

presentation of the check or warrant if the funds subject to the

check or warrant are in the possession of the depository, and, in

the case of a time deposit, if the agreed period of notice has

expired.

(b) If the commissioners court selects a depository in another

county under Section 116.026, the depository shall file a

statement with the county treasurer designating the place in the

county governed by the commissioners court where, and the person

by whom, deposits by the treasurer may be received and checks

will be paid, or the place in another county where deposits may

be made and checks may be paid. The statement must be filed

within five days after the date notice is given to the depository

of its selection.

(c) A warrant or check, including a warrant or check issued

prior to September 1, 1993, issued by the county treasurer in

settlement of a claim against a county that is not presented for

payment before the 366th day following the date of issuance is

overdue and nonnegotiable. The sum of the overdue warrant or

check shall be credited as revenue to the county if delivery to

the payees was attempted or occurred within a reasonable time

following the issuance of the warrant or check. No right to full

settlement of a proper unpaid claim is extinguished by this

subsection.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., ch. 326, Sec. 1, eff. June 5,

1991; Acts 1993, 73rd Leg., ch. 931, Sec. 1, eff. Aug. 30, 1993;

Acts 1997, 75th Leg., ch. 329, Sec. 1, eff. May 26, 1997.

Sec. 116.117. STATEMENTS OF ACCOUNT. A depository shall make a

detailed monthly statement to the commissioners court at each

regular term of the court. The statement must show the daily

balance credited to each of the funds on deposit.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.118. DEBTS PAYABLE OTHER THAN AT COUNTY TREASURY. The

commissioners court may instruct the county treasurer to deposit

money adequate to pay a bond, coupon, or other indebtedness of

the county at a place other than at the county treasury if by its

terms the indebtedness is payable on maturity at the other

location and if the payment is otherwise made in the manner

required by law.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.119. REQUIREMENTS FOR AUDITING AND COUNTERSIGNING

UNAFFECTED. This chapter does not affect the application of a

law or regulation providing for auditing and countersigning.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.120. COLLECTION OF CERTAIN OVERDUE COUNTY WARRANTS OR

CHECKS. (a) This section applies only to a warrant or check

issued by a county treasurer in settlement of a claim against a

county that has not been presented for payment.

(b) A person attempting to recover funds from the county for a

check or warrant issued by the county treasurer may not charge

the person to whom the check or warrant was issued and on whose

behalf the attempted recovery is made, or that person's

successors or assigns, a fee in an amount equal to more than 10

percent of the face value of the check or warrant.

(c) A county treasurer may collect a reasonable research fee to

determine if a claim submitted under this section is valid. The

treasurer may include the costs of inquiries to depository banks,

research of accounting records, and other similar actions in

setting the fee. A county treasurer may require the fee to be

paid before a claim may be processed or researched under this

section.

Added by Acts 1997, 75th Leg., ch. 142, Sec. 1, eff. Sept. 1,

1997.

SUBCHAPTER F. LIABILITIES

Sec. 116.151. LIABILITIES OF SURETIES ON SEPARATE BONDS. If a

county depository provides separate bonds to secure county funds,

each surety under a bond is liable only for that part of a loss

resulting from the failure of the depository that bears to the

total loss the same ratio as the amount of the bond bears to the

total amount of all bonds and securities held by the county for

the protection of the funds covered by the bond.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.152. SUBROGATION OF SURETIES. If a personal surety or

a surety company pays for a loss to a county under a depository

bond, the surety is subrogated to the rights of the county in an

amount equal to the amount of the surety's payment. However, the

amount of the subrogation may not exceed the amount of the

deposit secured by the surety at the time of the depository's

default.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.153. PRO RATA RECOVERY BY STATE AND COUNTY. If a

county depository becomes insolvent and it becomes necessary to

resort to the depository's bond or bonds to recover funds of the

county and the state, the state and county are entitled to share

pro rata in the recovery.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.154. LIABILITY OF DEPOSITORY PENDING COLLECTION OF

DEPOSITS. A county depository that uses due diligence to collect

a check, draft, or demand for money deposited by the county with

the depository is not liable for the collection until the

proceeds have been received by the depository. The depository

shall charge the county and the county shall pay a collection

expense that the depository may not pay or absorb because of a

federal law or a regulation adopted by the board of governors of

the Federal Reserve System or by the board of directors of the

Federal Deposit Insurance Corporation.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Sec. 116.155. FAILURE OF DEPOSITORY TO PAY CHECK OR WARRANT. A

depository that does not pay a check or warrant as required by

Section 116.116(a) is liable for and shall pay to the holder 10

percent of the amount of the check or warrant, and the

commissioners court shall revoke the order creating the

depository.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.