Texas Government Code 404.0221 – Eligible Collateral
(a) In this section, “public agency” means a board, authority, agency, department, commission, political subdivision, municipal corporation, district, public corporation, body politic, instrumentality of this state, or any other type of political or governmental entity of this state.
(b) For the purposes of § 404.022, collateral eligible to be pledged with the comptroller to secure state deposits includes:
(1) direct obligations of or obligations the principal and interest of which are guaranteed by the United States government;
(2) direct obligations of or obligations guaranteed by agencies or instrumentalities of the United States government, including letters of credit; and
(3) a general or special obligation issued by a public agency and approved by the attorney general that is payable from taxes, revenues, or both.
Terms Used In Texas Government Code 404.0221
- Comptroller: means the state comptroller of public accounts. See Texas Government Code 312.011
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- United States: includes a department, bureau, or other agency of the United States of America. See Texas Government Code 311.005
(c) If pledged collateral consists of securities with a declining principal balance, the market value of the collateral pledged may not be less than 125 percent of the amount of the state deposits to be secured.
(d) Eligible collateral includes only:
(1) a security with fixed, stated rates; or
(2) a letter of credit described by Subsection (b)(2) for a stated amount.
(e) A loss sustained by a depository that has secured its deposits by collateral may be enforced against the collateral.
(f) The comptroller may reject at any time collateral tendered by a state depository without assigning a reason for the rejection, and the comptroller’s action is final and not subject to review.
(g) Collateral is not required for deposits to the extent that the deposits are insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.