Sec. 404.103: Powers

(a) The trust company may receive, transfer, and disburse money and securities as provided by statute or belonging to the state, agencies and local political subdivisions of the state, and nonprofit corporations, foundations, and other charitable organizations created on behalf of the state or an agency or local political subdivision of the state in a manner that qualifies the trust company for federal reserve services.

(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.

(c) The trust company may adopt and amend articles of incorporation, bylaws, resolutions, and other documents necessary to carry out its purposes.

(d) The trust company may act as escrow agent for refunding bonds issued under Subchapter A, Chapter 1207, to make a deposit under Subchapter B or C of that chapter.

(e) The trust company may hire employees and may fix their compensation and prescribe their duties or may contract with the comptroller's office for staff support.

(f) The trust company shall develop a fee schedule in the amount necessary to recover costs of service and to retain adequate reserves to support the operations of the trust company.

(g) The trust company is exempt from other state laws regulating or limiting state purchasing or a purchasing decision if the trust company determines that the purchase or decision relates to the fiduciary duties of the trust company. The trust company shall make all purchases of goods and services using purchasing methods that ensure the best value to the trust company and its participants. In determining best value, the trust company may consider the best value standards applicable to state agencies as enumerated in Section 2155.074. The trust company shall develop a plan of operation that includes procedures and standards for the purchases of goods and services using best value methods.

Comments

Acts 1987, 70th Leg., ch. 147, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 78, Sec. 9, eff. May 11, 1989; Acts 1991, 72nd Leg., ch. 909, Sec. 1, eff. Aug. 26, 1991; Acts 1991, 72nd Leg., 2nd C.S., ch. 12, Sec. 1.25, eff. Jan. 1, 1992; Acts 1993, 73rd Leg., ch. 939, Sec. 7, 13, eff. Aug. 30, 1993; Acts 1997, 75th Leg., ch. 1311, Sec. 6, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1423, Sec. 7.73, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1158, Sec. 22, eff. June 15, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 8.231, eff. Sept. 1, 2001.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 620 (S.B. 1138), Sec. 1, eff. June 10, 2019.