GOVERNMENT = CODE=C2=A0=C2=A0CHAPTER 2256. PUBLIC FUNDS INVESTMENT

From: Subject: =?Windows-1252?Q?GOVERNMENT_CODE=A0=A0CHAPTER_2256._PUBLIC_FUNDS_INVESTME?= =?Windows-1252?Q?NT?= Date: Fri, 16 Sep 2011 13:48:10 -0500 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_0000_01CC7477.458053F0" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.5994 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01CC7477.458053F0 Content-Type: text/html; charset="utf-8" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.statutes.legis.state.tx.us/Docs/GV/htm/GV.2256.htm =EF=BB=BF GOVERNMENT = CODE=C2=A0=C2=A0CHAPTER 2256. PUBLIC FUNDS INVESTMENT =
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GOVERNMENT CODE

TITLE 10. =
GENERAL GOVERNMENT

SUBTITLE F. STATE AND LOCAL =
CONTRACTS AND FUND MANAGEMENT

CHAPTER 2256. =
PUBLIC FUNDS INVESTMENT

SUBCHAPTER A. AUTHORIZED =
INVESTMENTS FOR GOVERNMENTAL ENTITIES

Sec. 2256.001.  SHORT TITLE.  This chapter =
may be cited as the Public Funds Investment Act.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.002.  DEFINITIONS.  In this =
chapter:
(1)  "Bond proceeds" means the proceeds from the =
sale of bonds, notes, and other obligations issued by an entity, and =
reserves and funds maintained by an entity for debt service =
purposes.
(2)  "Book value" means the original acquisition =
cost of an investment plus or minus the accrued amortization or =
accretion.
(3)  "Funds" means public funds in the custody of =
a state agency or local government that:
(A)  are not required by law to be =
deposited in the state treasury;  and
(B)  the investing entity has authority to =
invest.
(4)  "Institution of higher education" has the =
meaning assigned by Section 61.003, Education Code.
(5)  "Investing =
entity" and "entity" mean an entity subject to this chapter and =
described by Section 2256.003.
(6)  "Investment pool" means an entity created =
under this code to invest public funds jointly on behalf of the entities =
that participate in the pool and whose investment objectives in order of =
priority are:
(A)  preservation and safety of principal;
(B)  liquidity;  =
and
(C)  yield.
(7)  "Local government" means a municipality, a =
county, a school district, a district or authority created under Section =
52(b)(1) or (2), Article III, or Section 59, Article XVI, Texas =
Constitution, a fresh water supply district, a hospital district, and =
any political subdivision, authority, public corporation, body politic, =
or instrumentality of the State of Texas, and any nonprofit corporation =
acting on behalf of any of those entities.
(8)  "Market value" means the current face =
or par value of an investment multiplied by the net selling price of the =
security as quoted by a recognized market pricing source quoted on the =
valuation date.
(9)  "Pooled fund group" means an internally =
created fund of an investing entity in which one or more institutional =
accounts of the investing entity are invested.
(10)  "Qualified =
representative" means a person who holds a position with a business =
organization, who is authorized to act on behalf of the business =
organization, and who is one of the following:
(A)  for a business =
organization doing business that is regulated by or registered with a =
securities commission, a person who is registered under the rules of the =
National Association of Securities Dealers;
(B)  for a state or federal bank, a savings =
bank, or a state or federal credit union, a member of the loan committee =
for the bank or branch of the bank or a person authorized by corporate =
resolution to act on behalf of and bind the banking institution;
(C)  for an =
investment pool, the person authorized by the elected official or board =
with authority to administer the activities of the investment pool to =
sign the written instrument on behalf of the investment pool;  or
(D)  for an =
investment management firm registered under the Investment Advisers Act =
of 1940 (15 U.S.C. Section 80b-1 et seq.) or, if not subject to =
registration under that Act, registered with the State Securities Board, =
a person who is an officer or principal of the investment management =
firm.
(11)  "School district" means a public school =
district.
(12)  "Separately invested asset" means an =
account or fund of a state agency or local government that is not =
invested in a pooled fund group.
(13)  "State agency" means an office, department, =
commission, board, or other agency that is part of any branch of state =
government, an institution of higher education, and any nonprofit =
corporation acting on behalf of any of those entities.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 1, eff. Sept. 1, =
1997;  Acts 1999, 76th Leg., ch. 1454, Sec. 1, eff. Sept. 1, 1999.

Sec. 2256.003.  AUTHORITY TO INVEST FUNDS;  =
ENTITIES SUBJECT TO THIS CHAPTER.  (a)  Each governing body of the =
following entities may purchase, sell, and invest its funds and funds =
under its control in investments authorized under this subchapter in =
compliance with investment policies approved by the governing body and =
according to the standard of care prescribed by Section 2256.006:
(1)  a local =
government;
(2)  a state agency;
(3)  a nonprofit corporation acting on =
behalf of a local government or a state agency;  or
(4)  an investment =
pool acting on behalf of two or more local governments, state agencies, =
or a combination of those entities.
(b)  In the exercise of its powers under =
Subsection (a), the governing body of an investing entity may contract =
with an investment management firm registered under the Investment =
Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State =
Securities Board to provide for the investment and management of its =
public funds or other funds under its control.  A contract made under =
authority of this subsection may not be for a term longer than two =
years.  A renewal or extension of the contract must be made by the =
governing body of the investing entity by order, ordinance, or =
resolution.
(c)  This chapter does not prohibit an investing =
entity or investment officer from using the entity's employees or the =
services of a contractor of the entity to aid the investment officer in =
the execution of the officer's duties under this chapter.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1999, 76th Leg., ch. 1454, Sec. 2, eff. Sept. 1, =
1999.

Sec. 2256.004.  APPLICABILITY.  (a)  This =
subchapter does not apply to:
(1)  a public retirement system as defined by =
Section 802.001;
(2)  state funds invested as authorized by =
Section 404.024;
(3)  an institution of higher education having =
total endowments of at least $95 million in book value on May 1, =
1995;
(4)  funds invested by the Veterans' Land Board =
as authorized by Chapter 161, 162, or 164, Natural Resources Code;
(5)  registry funds =
deposited with the county or district clerk under Chapter 117, Local =
Government Code;  or
(6)  a deferred compensation plan that qualifies =
under either Section 401(k) or 457 of the Internal Revenue Code of 1986 =
(26 U.S.C. Section 1 et seq.), as amended.
(b)  This subchapter does not apply to an =
investment donated to an investing entity for a particular purpose or =
under terms of use specified by the donor.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 505, Sec. 24, eff. Sept. 1, =
1997;  Acts 1997, 75th Leg., ch. 1421, Sec. 2, eff. Sept. 1, 1997;  Acts =
1999, 76th Leg., ch. 62, Sec. 8.21, eff. Sept. 1, 1999;  Acts 1999, 76th =
Leg., ch. 1454, Sec. 3, eff. Sept. 1, 1999.

Sec. 2256.005.  INVESTMENT POLICIES;  =
INVESTMENT STRATEGIES;  INVESTMENT OFFICER.  (a)  The governing body of =
an investing entity shall adopt by rule, order, ordinance, or =
resolution, as appropriate, a written investment policy regarding the =
investment of its funds and funds under its control.
(b)  The investment =
policies must:
(1)  be written;
(2)  primarily emphasize safety of =
principal and liquidity;
(3)  address investment diversification, yield, =
and maturity and the quality and capability of investment management;  =
and
(4)  include:
(A)  a list of the types of authorized =
investments in which the investing entity's funds may be invested;
(B)  the maximum =
allowable stated maturity of any individual investment owned by the =
entity;  
(C)  for pooled fund groups, the maximum =
dollar-weighted average maturity allowed based on the stated maturity =
date for the portfolio;
(D)  methods to monitor the market price of =
investments acquired with public funds;  and
(E)  a requirement for settlement of all =
transactions, except investment pool funds and mutual funds, on a =
delivery versus payment basis.
(c)  The investment policies may provide that =
bids for certificates of deposit be solicited:
(1)  orally;
(2)  in =
writing;
(3)  electronically;  or
(4)  in any =
combination of those methods.
(d)  As an integral part of an investment policy, =
the governing body shall adopt a separate written investment strategy =
for each of the funds or group of funds under its control.  Each =
investment strategy must describe the investment objectives for the =
particular fund using the following priorities in order of =
importance:
(1)  understanding of the suitability of the =
investment to the financial requirements of the entity;
(2)  preservation and =
safety of principal;
(3)  liquidity;
(4)  marketability of the investment if the need =
arises to liquidate the investment before maturity;
(5)  diversification =
of the investment portfolio;  and
(6)  yield.
(e)  The governing body of an investing entity =
shall review its investment policy and investment strategies not less =
than annually.  The governing body shall adopt a written instrument by =
rule, order, ordinance, or resolution stating that it has reviewed the =
investment policy and investment strategies and that the written =
instrument so adopted shall record any changes made to either the =
investment policy or investment strategies.
(f)  Each investing entity shall designate, =
by rule, order, ordinance, or resolution, as appropriate, one or more =
officers or employees of the state agency, local government, or =
investment pool as investment officer to be responsible for the =
investment of its funds consistent with the investment policy adopted by =
the entity.  If the governing body of an investing entity has contracted =
with another investing entity to invest its funds, the investment =
officer of the other investing entity is considered to be the investment =
officer of the first investing entity for purposes of this chapter.  =
Authority granted to a person to invest an entity's funds is effective =
until rescinded by the investing entity, until the expiration of the =
officer's term or the termination of the person's employment by the =
investing entity, or if an investment management firm, until the =
expiration of the contract with the investing entity.  In the =
administration of the duties of an investment officer, the person =
designated as investment officer shall exercise the judgment and care, =
under prevailing circumstances, that a prudent person would exercise in =
the management of the person's own affairs, but the governing body of =
the investing entity retains ultimate responsibility as fiduciaries of =
the assets of the entity.  Unless authorized by law, a person may not =
deposit, withdraw, transfer, or manage in any other manner the funds of =
the investing entity.
(g)  Subsection (f) does not apply to a state =
agency, local government, or investment pool for which an officer of the =
entity is assigned by law the function of investing its funds.
 
Text of subsec. (h) as amended =
by Acts 1997, 75th Leg., ch. 685, Sec. 1

 
(h)  An officer or employee of a commission =
created under Chapter 391, Local Government Code, is ineligible to be an =
investment officer for the commission under Subsection (f) if the =
officer or employee is an investment officer designated under Subsection =
(f) for another local government.
 
Text of subsec. (h) as amended by Acts 1997, 75th Leg., =
ch. 1421, Sec. 3

 
(h)  An officer or =
employee of a commission created under Chapter 391, Local Government =
Code, is ineligible to be designated as an investment officer under =
Subsection (f) for any investing entity other than for that =
commission.
(i)  An investment officer of an entity who has a =
personal business relationship with a business organization offering to =
engage in an investment transaction with the entity shall file a =
statement disclosing that personal business interest.  An investment =
officer who is related within the second degree by affinity or =
consanguinity, as determined under Chapter 573, to an individual seeking =
to sell an investment to the investment officer's entity shall file a =
statement disclosing that relationship.  A statement required under this =
subsection must be filed with the Texas Ethics Commission and the =
governing body of the entity.  For purposes of this subsection, an =
investment officer has a personal business relationship with a business =
organization if:
(1)  the investment officer owns 10 percent or =
more of the voting stock or shares of the business organization or owns =
$5,000 or more of the fair market value of the business =
organization;
(2)  funds received by the investment officer =
from the business organization exceed 10 percent of the investment =
officer's gross income for the previous year;  or
(3)  the investment =
officer has acquired from the business organization during the previous =
year investments with a book value of $2,500 or more for the personal =
account of the investment officer.
(j)  The governing body of an investing entity =
may specify in its investment policy that any investment authorized by =
this chapter is not suitable.
(k)  A written copy of the investment policy =
shall be presented to any person offering to engage in an investment =
transaction with an investing entity or to an investment management firm =
under contract with an investing entity to invest or manage the entity's =
investment portfolio.  For purposes of this subsection, a business =
organization includes investment pools and an investment management firm =
under contract with an investing entity to invest or manage the entity's =
investment portfolio.  Nothing in this subsection relieves the investing =
entity of the responsibility for monitoring the investments made by the =
investing entity to determine that they are in compliance with the =
investment policy.  The qualified representative of the business =
organization offering to engage in an investment transaction with an =
investing entity shall execute a written instrument in a form acceptable =
to the investing entity and the business organization substantially to =
the effect that the business organization has:
(1)  received and =
reviewed the investment policy of the entity;  and
(2)  acknowledged =
that the business organization has implemented reasonable procedures and =
controls in an effort to preclude investment transactions conducted =
between the entity and the organization that are not authorized by the =
entity's investment policy, except to the extent that this authorization =
is dependent on an analysis of the makeup of the entity's entire =
portfolio or requires an interpretation of subjective investment =
standards.
(l)  The investment officer of an entity may not =
acquire or otherwise obtain any authorized investment described in the =
investment policy of the investing entity from a person who has not =
delivered to the entity the instrument required by Subsection (k).
(m)  An investing =
entity other than a state agency, in conjunction with its annual =
financial audit, shall perform a compliance audit of management controls =
on investments and adherence to the entity's established investment =
policies.
(n)  Except as provided by Subsection (o), at =
least once every two years a state agency shall arrange for a compliance =
audit of management controls on investments and adherence to the =
agency's established investment policies.  The compliance audit shall be =
performed by the agency's internal auditor or by a private auditor =
employed in the manner provided by Section 321.020.  Not later than =
January 1 of each even-numbered year a state agency shall report the =
results of the most recent audit performed under this subsection to the =
state auditor.  Subject to a risk assessment and to the legislative =
audit committee's approval of including a review by the state auditor in =
the audit plan under Section 321.013, the state auditor may review =
information provided under this section.  If review by the state auditor =
is approved by the legislative audit committee, the state auditor may, =
based on its review, require a state agency to also report to the state =
auditor other information the state auditor determines necessary to =
assess compliance with laws and policies applicable to state agency =
investments.  A report under this subsection shall be prepared in a =
manner the state auditor prescribes.
(o)  The audit requirements of Subsection (n) do =
not apply to assets of a state agency that are invested by the =
comptroller under Section 404.024.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 685, Sec. 1, eff. Sept. 1, =
1997;  Acts 1997, 75th Leg., ch. 1421, Sec. 3, eff. Sept. 1, 1997;  Acts =
1999, 76th Leg., ch. 1454, Sec. 4, eff. Sept. 1, 1999;  Acts 2003, 78th =
Leg., ch. 785, Sec. 41, eff. Sept. 1, 2003.

Sec. 2256.006.  STANDARD OF CARE.  (a)  =
Investments shall be made with judgment and care, under prevailing =
circumstances, that a person of prudence, discretion, and intelligence =
would exercise in the management of the person's own affairs, not for =
speculation, but for investment, considering the probable safety of =
capital and the probable income to be derived.  Investment of funds =
shall be governed by the following investment objectives, in order of =
priority:
(1)  preservation and safety of principal;
(2)  liquidity;  =
and
(3)  yield.
(b)  In determining whether an investment officer =
has exercised prudence with respect to an investment decision, the =
determination shall be made taking into consideration:
(1)  the investment =
of all funds, or funds under the entity's control, over which the =
officer had responsibility rather than a consideration as to the =
prudence of a single investment;  and
(2)  whether the investment decision was =
consistent with the written investment policy of the entity.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.007.  INVESTMENT TRAINING;  STATE =
AGENCY BOARD MEMBERS AND OFFICERS.  (a)  Each member of the governing =
board of a state agency and its investment officer shall attend at least =
one training session relating to the person's responsibilities under =
this chapter within six months after taking office or assuming =
duties.
(b)  The =
Texas Higher Education Coordinating Board shall provide the training =
under this section.
(c)  Training under this section must include =
education in investment controls, security risks, strategy risks, market =
risks, diversification of investment portfolio, and compliance with this =
chapter.
(d)  An =
investment officer shall attend a training session not less than once in =
a two-year period and may receive training from any independent source =
approved by the governing body of the state agency.  The investment =
officer shall prepare a report on this subchapter and deliver the report =
to the governing body of the state agency not later than the 180th day =
after the last day of each regular session of the legislature.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 73, Sec. 1, eff. May 9, 1997;  =
Acts 1997, 75th Leg., ch. 1421, Sec. 4, eff. Sept. 1, 1997;  Acts 1999, =
76th Leg., ch. 1454, Sec. 5, eff. Sept. 1, 1999.

Sec. 2256.008.  INVESTMENT TRAINING;  LOCAL =
GOVERNMENTS.  (a)  Except as provided by Subsections (b) and (e), the =
treasurer, the chief financial officer if the treasurer is not the chief =
financial officer, and the investment officer of a local government =
shall:
(1)  attend at least one training session from an =
independent source approved by the governing body of the local =
government or a designated investment committee advising the investment =
officer as provided for in the investment policy of the local government =
and containing at least 10 hours of instruction relating to the =
treasurer's or officer's responsibilities under this subchapter within =
12 months after taking office or assuming duties;  and
(2)  except as =
provided by Subsections (b) and (e), attend an investment training =
session not less than once in a two-year period and receive not less =
than 10 hours of instruction relating to investment responsibilities =
under this subchapter from an independent source approved by the =
governing body of the local government or a designated investment =
committee advising the investment officer as provided for in the =
investment policy of the local government.
(b)  An investing entity created under =
authority of Section 52(b), Article III, or Section 59, Article XVI, =
Texas Constitution, that has contracted with an investment management =
firm under Section 2256.003(b) and has fewer than five full-time =
employees or an investing entity that has contracted with another =
investing entity to invest the entity's funds may satisfy the training =
requirement provided by Subsection (a)(2) by having an officer of the =
governing body attend four hours of appropriate instruction in a =
two-year period.  The treasurer or chief financial officer of an =
investing entity created under authority of Section 52(b), Article III, =
or Section 59, Article XVI, Texas Constitution, and that has fewer than =
five full-time employees is not required to attend training required by =
this section unless the person is also the investment officer of the =
entity.
(c)  Training under this section must include =
education in investment controls, security risks, strategy risks, market =
risks, diversification of investment portfolio, and compliance with this =
chapter.
(d)  Not later than December 31 each year, each =
individual, association, business, organization, governmental entity, or =
other person that provides training under this section shall report to =
the comptroller a list of the governmental entities for which the person =
provided required training under this section during that calendar year. =
 An individual's reporting requirements under this subsection are =
satisfied by a report of the individual's employer or the sponsoring or =
organizing entity of a training program or seminar.
(e)  This section does =
not apply to a district governed by Chapter 36 or 49, Water Code.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 5, eff. Sept. 1, =
1997;  Acts 1999, 76th Leg., ch. 1454, Sec. 6, eff. Sept. 1, 1999;  Acts =
2001, 77th Leg., ch. 69, Sec. 4, eff. May 14, 2001.

Sec. 2256.009.  AUTHORIZED INVESTMENTS:  =
OBLIGATIONS OF, OR GUARANTEED BY GOVERNMENTAL ENTITIES.  (a)  Except as =
provided by Subsection (b), the following are authorized investments =
under this subchapter:
(1)  obligations, including letters of credit, of =
the United States or its agencies and instrumentalities;
(2)  direct =
obligations of this state or its agencies and instrumentalities;
(3)  collateralized =
mortgage obligations directly issued by a federal agency or =
instrumentality of the United States, the underlying security for which =
is guaranteed by an agency or instrumentality of the United =
States;
(4)  other obligations, the principal and =
interest of which are unconditionally guaranteed or insured by, or =
backed by the full faith and credit of, this state or the United States =
or their respective agencies and instrumentalities;
(5)  obligations of =
states, agencies, counties, cities, and other political subdivisions of =
any state rated as to investment quality by a nationally recognized =
investment rating firm not less than A or its equivalent;  and
(6)  bonds issued, =
assumed, or guaranteed by the State of Israel.
(b)  The following are =
not authorized investments under this section:
(1)  obligations =
whose payment represents the coupon payments on the outstanding =
principal balance of the underlying mortgage-backed security collateral =
and pays no principal;
(2)  obligations whose payment represents the =
principal stream of cash flow from the underlying mortgage-backed =
security collateral and bears no interest;
(3)  collateralized mortgage obligations =
that have a stated final maturity date of greater than 10 years;  =
and
(4)  collateralized mortgage obligations the =
interest rate of which is determined by an index that adjusts opposite =
to the changes in a market index.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1999, 76th Leg., ch. 1454, Sec. 7, eff. Sept. 1, =
1999;  Acts 2001, 77th Leg., ch. 558, Sec. 1, eff. Sept. 1, 2001.

Sec. =
2256.010.  AUTHORIZED INVESTMENTS:  CERTIFICATES OF =
DEPOSIT AND SHARE CERTIFICATES.  (a)  A certificate of deposit or share =
certificate is an authorized investment under this subchapter if the =
certificate is issued by a depository institution that has its main =
office or a branch office in this state and is:
(1)  guaranteed or =
insured by the Federal Deposit Insurance Corporation or its successor or =
the National Credit Union Share Insurance Fund or its successor;
(2)  secured by =
obligations that are described by Section 2256.009(a), including =
mortgage backed securities directly issued by a federal agency or =
instrumentality that have a market value of not less than the principal =
amount of the certificates, but excluding those mortgage backed =
securities of the nature described by Section 2256.009(b); or
(3)  secured in any =
other manner and amount provided by law for deposits of the investing =
entity.
(b)  In =
addition to the authority to invest funds in certificates of deposit =
under Subsection (a), an investment in certificates of deposit made in =
accordance with the following conditions is an authorized investment =
under this subchapter:
(1)  the funds are invested by an investing =
entity through a depository institution that has its main office or a =
branch office in this state and that is selected by the investing =
entity;
(2)  the depository institution selected by the =
investing entity under Subdivision (1) arranges for the deposit of the =
funds in certificates of deposit in one or more federally insured =
depository institutions, wherever located, for the account of the =
investing entity;
(3)  the full amount of the principal and accrued =
interest of each of the certificates of deposit is insured by the United =
States or an instrumentality of the United States;
(4)  the depository =
institution selected by the investing entity under Subdivision (1) acts =
as custodian for the investing entity with respect to the certificates =
of deposit issued for the account of the investing entity; and
(5)  at the same time =
that the funds are deposited and the certificates of deposit are issued =
for the account of the investing entity, the depository institution =
selected by the investing entity under Subdivision (1) receives an =
amount of deposits from customers of other federally insured depository =
institutions, wherever located, that is equal to or greater than the =
amount of the funds invested by the investing entity through the =
depository institution selected under Subdivision (1).
Amended by Acts 1995, 74th Leg., ch. 32, Sec. 1, eff. =
April 28, 1995;  Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, =
1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 6, eff. Sept. 1, 1997.
Amended by: 
Acts 2005, 79th Leg., Ch. 128, Sec. 1, eff. September 1, 2005.

Sec. 2256.011.  AUTHORIZED INVESTMENTS:  =
REPURCHASE AGREEMENTS.  (a)  A fully collateralized repurchase agreement =
is an authorized investment under this subchapter if the repurchase =
agreement:
(1)  has a defined termination date;
(2)  is secured by =
obligations described by Section 2256.009(a)(1);  and
(3)  requires the =
securities being purchased by the entity to be pledged to the entity, =
held in the entity's name, and deposited at the time the investment is =
made with the entity or with a third party selected and approved by the =
entity;  and
(4)  is placed through a primary government =
securities dealer, as defined by the Federal Reserve, or a financial =
institution doing business in this state.
(b)  In this section, "repurchase agreement" =
means a simultaneous agreement to buy, hold for a specified time, and =
sell back at a future date obligations described by Section =
2256.009(a)(1), at a market value at the time the funds are disbursed of =
not less than the principal amount of the funds disbursed.  The term =
includes a direct security repurchase agreement and a reverse security =
repurchase agreement.
(c)  Notwithstanding any other law, the term of =
any reverse security repurchase agreement may not exceed 90 days after =
the date the reverse security repurchase agreement is delivered.
(d)  Money received by =
an entity under the terms of a reverse security repurchase agreement =
shall be used to acquire additional authorized investments, but the term =
of the authorized investments acquired must mature not later than the =
expiration date stated in the reverse security repurchase agreement.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.0115.  AUTHORIZED INVESTMENTS:  =
SECURITIES LENDING PROGRAM.  (a)  A securities lending program is an =
authorized investment under this subchapter if it meets the conditions =
provided by this section.
(b)  To qualify as an authorized investment under =
this subchapter:
(1)  the value of securities loaned under the =
program must be not less than 100 percent collateralized, including =
accrued income;
(2)  a loan made under the program must allow for =
termination at any time;
(3)  a loan made under the program must be =
secured by:
(A)  pledged securities described by Section =
2256.009;
(B)  pledged irrevocable letters of credit issued =
by a bank that is:
(i)  organized and existing under the laws of the =
United States or any other state;  and
(ii)  continuously rated by at least one =
nationally recognized investment rating firm at not less than A or its =
equivalent;  or
(C)  cash invested in accordance with =
Section:
(i)  2256.009;
(ii)  2256.013;
(iii)  2256.014;  or
(iv)  2256.016;
(4)  the terms of a loan made under the =
program must require that the securities being held as collateral =
be:
(A)  pledged to the investing entity;
(B)  held in the =
investing entity's name;  and
(C)  deposited at the time the investment is made =
with the entity or with a third party selected by or approved by the =
investing entity;
(5)  a loan made under the program must be placed =
through:
(A)  a =
primary government securities dealer, as defined by 5 C.F.R. Section =
6801.102(f), as that regulation existed on September 1, 2003;  or
(B)  a financial =
institution doing business in this state;  and
(6)  an agreement to =
lend securities that is executed under this section must have a term of =
one year or less.
Added by Acts 2003, 78th Leg., ch. 1227, Sec. 1, eff. =
Sept. 1, 2003.

Sec. 2256.012.  AUTHORIZED INVESTMENTS:  =
BANKER'S ACCEPTANCES.  A bankers' acceptance is an authorized investment =
under this subchapter if the bankers' acceptance:
(1)  has a stated =
maturity of 270 days or fewer from the date of its issuance;
(2)  will be, in =
accordance with its terms, liquidated in full at maturity;
(3)  is eligible for =
collateral for borrowing from a Federal Reserve Bank;  and
(4)  is accepted by a =
bank organized and existing under the laws of the United States or any =
state, if the short-term obligations of the bank, or of a bank holding =
company of which the bank is the largest subsidiary, are rated not less =
than A-1 or P-1 or an equivalent rating by at least one nationally =
recognized credit rating agency.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.013.  AUTHORIZED INVESTMENTS:  =
COMMERCIAL PAPER.  Commercial paper is an authorized investment under =
this subchapter if the commercial paper:
(1)  has a stated maturity of 270 days or =
fewer from the date of its issuance;  and
(2)  is rated not less than A-1 or P-1 or =
an equivalent rating by at least:
(A)  two nationally recognized credit rating =
agencies;  or
(B)  one nationally recognized credit rating =
agency and is fully secured by an irrevocable letter of credit issued by =
a bank organized and existing under the laws of the United States or any =
state.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.014.  AUTHORIZED INVESTMENTS:  =
MUTUAL FUNDS.  (a)  A no-load money market mutual fund is an authorized =
investment under this subchapter if the mutual fund:
(1)  is registered =
with and regulated by the Securities and Exchange Commission;
(2)  provides the =
investing entity with a prospectus and other information required by the =
Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.) or the =
Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.);
(3)  has a =
dollar-weighted average stated maturity of 90 days or fewer;  and
(4)  includes in its =
investment objectives the maintenance of a stable net asset value of $1 =
for each share.
(b)  In addition to a no-load money market mutual =
fund permitted as an authorized investment in Subsection (a), a no-load =
mutual fund is an authorized investment under this subchapter if the =
mutual fund:
(1)  is registered with the Securities and =
Exchange Commission;
(2)  has an average weighted maturity of less =
than two years;
(3)  is invested exclusively in obligations =
approved by this subchapter;
(4)  is continuously rated as to investment =
quality by at least one nationally recognized investment rating firm of =
not less than AAA or its equivalent;  and
(5)  conforms to the requirements set forth =
in Sections 2256.016(b) and (c) relating to the eligibility of =
investment pools to receive and invest funds of investing =
entities.
(c)  An entity is not authorized by this section =
to:
(1)  invest =
in the aggregate more than 15 percent of its monthly average fund =
balance, excluding bond proceeds and reserves and other funds held for =
debt service, in mutual funds described in Subsection (b);
(2)  invest any =
portion of bond proceeds, reserves and funds held for debt service, in =
mutual funds described in Subsection (b);  or
(3)  invest its funds =
or funds under its control, including bond proceeds and reserves and =
other funds held for debt service, in any one mutual fund described in =
Subsection (a) or (b) in an amount that exceeds 10 percent of the total =
assets of the mutual fund.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 7, eff. Sept. 1, =
1997;  Acts 1999, 76th Leg., ch. 1454, Sec. 8, eff. Sept. 1, 1999.

Sec. 2256.015.  AUTHORIZED INVESTMENTS:  =
GUARANTEED INVESTMENT CONTRACTS.  (a)  A guaranteed investment contract =
is an authorized investment for bond proceeds under this subchapter if =
the guaranteed investment contract:
(1)  has a defined termination date;
(2)  is secured by =
obligations described by Section 2256.009(a)(1), excluding those =
obligations described by Section 2256.009(b), in an amount at least =
equal to the amount of bond proceeds invested under the contract;  =
and
(3)  is =
pledged to the entity and deposited with the entity or with a third =
party selected and approved by the entity.
(b)  Bond proceeds, other than bond proceeds =
representing reserves and funds maintained for debt service purposes, =
may not be invested under this subchapter in a guaranteed investment =
contract with a term of longer than five years from the date of issuance =
of the bonds.
(c)  To be eligible as an authorized =
investment:
(1)  the governing body of the entity must =
specifically authorize guaranteed investment contracts as an eligible =
investment in the order, ordinance, or resolution authorizing the =
issuance of bonds;
(2)  the entity must receive bids from at least =
three separate providers with no material financial interest in the =
bonds from which proceeds were received;
(3)  the entity must purchase the highest =
yielding guaranteed investment contract for which a qualifying bid is =
received;
(4)  the price of the guaranteed investment =
contract must take into account the reasonably expected drawdown =
schedule for the bond proceeds to be invested;  and
(5)  the provider =
must certify the administrative costs reasonably expected to be paid to =
third parties in connection with the guaranteed investment contract.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 8, eff. Sept. 1, =
1997;  Acts 1999, 76th Leg., ch. 1454, Sec. 9, 10, eff. Sept. 1, =
1999.

Sec. 2256.016.  AUTHORIZED INVESTMENTS:  =
INVESTMENT POOLS.  (a)  An entity may invest its funds and funds under =
its control through an eligible investment pool if the governing body of =
the entity by rule, order, ordinance, or resolution, as appropriate, =
authorizes investment in the particular pool.  An investment pool shall =
invest the funds it receives from entities in authorized investments =
permitted by this subchapter.
(b)  To be eligible to receive funds from and =
invest funds on behalf of an entity under this chapter, an investment =
pool must furnish to the investment officer or other authorized =
representative of the entity an offering circular or other similar =
disclosure instrument that contains, at a minimum, the following =
information:
(1)  the types of investments in which money is =
allowed to be invested;
(2)  the maximum average dollar-weighted maturity =
allowed, based on the stated maturity date, of the pool;
(3)  the maximum =
stated maturity date any investment security within the portfolio =
has;
(4)  the =
objectives of the pool;
(5)  the size of the pool;
(6)  the names of the =
members of the advisory board of the pool and the dates their terms =
expire;
(7)  the custodian bank that will safekeep the =
pool's assets;
(8)  whether the intent of the pool is to =
maintain a net asset value of one dollar and the risk of market price =
fluctuation;
(9)  whether the only source of payment is the =
assets of the pool at market value or whether there is a secondary =
source of payment, such as insurance or guarantees, and a description of =
the secondary source of payment;
(10)  the name and address of the independent =
auditor of the pool;
(11)  the requirements to be satisfied for an =
entity to deposit funds in and withdraw funds from the pool and any =
deadlines or other operating policies required for the entity to invest =
funds in and withdraw funds from the pool;  and
(12)  the performance =
history of the pool, including yield, average dollar-weighted =
maturities, and expense ratios.
(c)  To maintain eligibility to receive funds =
from and invest funds on behalf of an entity under this chapter, an =
investment pool must furnish to the investment officer or other =
authorized representative of the entity:
(1)  investment transaction confirmations;  =
and
(2)  a =
monthly report that contains, at a minimum, the following =
information:
(A)  the types and percentage breakdown of =
securities in which the pool is invested;
(B)  the current average dollar-weighted =
maturity, based on the stated maturity date, of the pool;
(C)  the current =
percentage of the pool's portfolio in investments that have stated =
maturities of more than one year;
(D)  the book value versus the market value of =
the pool's portfolio, using amortized cost valuation;
(E)  the size of the =
pool;
(F)  the =
number of participants in the pool;
(G)  the custodian bank that is safekeeping the =
assets of the pool;
(H)  a listing of daily transaction activity of =
the entity participating in the pool;
(I)  the yield and expense ratio of the =
pool;
(J)  the =
portfolio managers of the pool;  and
(K)  any changes or addenda to the offering =
circular.
(d)  An entity by contract may delegate to an =
investment pool the authority to hold legal title as custodian of =
investments purchased with its local funds.
(e)  In this section, "yield" shall be =
calculated in accordance with regulations governing the registration of =
open-end management investment companies under the Investment Company =
Act of 1940, as promulgated from time to time by the federal Securities =
and Exchange Commission.
(f)  To be eligible to receive funds from and =
invest funds on behalf of an entity under this chapter, a public funds =
investment pool created to function as a money market mutual fund must =
mark its portfolio to market daily, and, to the extent reasonably =
possible, stabilize at a $1 net asset value.  If the ratio of the market =
value of the portfolio divided by the book value of the portfolio is =
less than 0.995 or greater than 1.005, portfolio holdings shall be sold =
as necessary to maintain the ratio between 0.995 and 1.005.
(g)  To be eligible to =
receive funds from and invest funds on behalf of an entity under this =
chapter, a public funds investment pool must have an advisory board =
composed:
(1)  equally of participants in the pool and =
other persons who do not have a business relationship with the pool and =
are qualified to advise the pool, for a public funds investment pool =
created under Chapter 791 and managed by a state agency;  or
(2)  of participants =
in the pool and other persons who do not have a business relationship =
with the pool and are qualified to advise the pool, for other investment =
pools.
(h)  To =
maintain eligibility to receive funds from and invest funds on behalf of =
an entity under this chapter, an investment pool must be continuously =
rated no lower than AAA or AAA-m or at an equivalent rating by at least =
one nationally recognized rating service.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1421, Sec. 9, eff. Sept. 1, =
1997.

Sec. 2256.017.  EXISTING INVESTMENTS.  An =
entity is not required to liquidate investments that were authorized =
investments at the time of purchase.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 5.46(a), =
eff. Sept. 1, 1995;  Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. =
1, 1995.  Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 10, eff. Sept. =
1, 1997.

Sec. 2256.019.  RATING OF CERTAIN INVESTMENT =
POOLS.  A public funds investment pool must be continuously rated no =
lower than AAA or AAA-m or at an equivalent rating by at least one =
nationally recognized rating service or no lower than investment grade =
by at least one nationally recognized rating service with a weighted =
average maturity no greater than 90 days.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.  Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 11, eff. =
Sept. 1, 1997.

Sec. 2256.020.  AUTHORIZED INVESTMENTS:  =
INSTITUTIONS OF HIGHER EDUCATION.  In addition to the authorized =
investments permitted by this subchapter, an institution of higher =
education may purchase, sell, and invest its funds and funds under its =
control in the following:
(1)  cash management and fixed income funds =
sponsored by organizations exempt from federal income taxation under =
Section 501(f), Internal Revenue Code of 1986 (26 U.S.C. Section =
501(f));
(2)  negotiable certificates of deposit issued by =
a bank that has a certificate of deposit rating of at least 1 or the =
equivalent by a nationally recognized credit rating agency or that is =
associated with a holding company having a commercial paper rating of at =
least A-1, P-1, or the equivalent by a nationally recognized credit =
rating agency;  and
(3)  corporate bonds, debentures, or similar debt =
obligations rated by a nationally recognized investment rating firm in =
one of the two highest long-term rating categories, without regard to =
gradations within those categories.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.0201.  AUTHORIZED INVESTMENTS;  =
MUNICIPAL UTILITY.  (a)  A municipality that owns a municipal electric =
utility that is engaged in the distribution and sale of electric energy =
or natural gas to the public may enter into a hedging contract and =
related security and insurance agreements in relation to fuel oil, =
natural gas, coal, nuclear fuel, and electric energy to protect against =
loss due to price fluctuations.  A hedging transaction must =
comply with the regulations of the Commodity Futures Trading Commission =
and the Securities and Exchange Commission.  If there is a =
conflict between the municipal charter of the municipality and this =
chapter, this chapter prevails.
(b)  A payment by a municipally owned electric or =
gas utility under a hedging contract or related agreement in relation to =
fuel supplies or fuel reserves is a fuel expense, and the utility may =
credit any amounts it receives under the contract or agreement against =
fuel expenses.
(c)  The governing body of a municipally owned =
electric or gas utility or the body vested with power to manage and =
operate the municipally owned electric or gas utility may set policy =
regarding hedging transactions.
(d)  In this section, "hedging" means the buying =
and selling of fuel oil, natural gas, coal, nuclear fuel, and electric =
energy futures or options or similar contracts on those commodities and =
related transportation costs as a protection against loss due to price =
fluctuation.
Added by Acts 1999, 76th Leg., ch. 405, Sec. 48, eff. =
Sept. 1, 1999.
Amended by: 
Acts 2007, 80th Leg., R.S., Ch. =
7, Sec. 1, eff. April 13, 2007.

Sec. 2256.0202.  AUTHORIZED =
INVESTMENTS:  MUNICIPAL FUNDS FROM MANAGEMENT AND DEVELOPMENT =
OF MINERAL RIGHTS.  (a)  In addition to other investments authorized =
under this subchapter, a municipality may invest funds received by the =
municipality from a lease or contract for the management and development =
of land owned by the municipality and leased for oil, gas, or other =
mineral development in any investment authorized to be made by a trustee =
under Subtitle B, Title 9, Property Code (Texas Trust Code).
(b)  Funds invested by =
a municipality under this section shall be segregated and accounted for =
separately from other funds of the municipality.
Added by Acts 2009, 81st Leg., R.S., Ch. 1371, Sec. 1, eff. September 1, 2009.

Sec. =
2256.0205.  AUTHORIZED INVESTMENTS; DECOMMISSIONING TRUST.  =
(a)  In this section:
(1)  "Decommissioning trust" means a trust =
created to provide the Nuclear Regulatory Commission assurance that =
funds will be available for decommissioning purposes as required under =
10 C.F.R. Part 50 or other similar regulation.
(2)  "Funds" includes =
any money held in a decommissioning trust regardless of whether the =
money is considered to be public funds under this subchapter.
(b)  In addition to =
other investments authorized under this subchapter, a municipality that =
owns a municipal electric utility that is engaged in the distribution =
and sale of electric energy or natural gas to the public may invest =
funds held in a decommissioning trust in any investment authorized by =
Subtitle B, Title 9, Property Code.
Added by Acts 2005, 79th Leg., Ch. 121, Sec. 1, eff. September 1, 2005.

Sec. 2256.021.  EFFECT OF LOSS OF REQUIRED =
RATING.  An investment that requires a minimum rating under this =
subchapter does not qualify as an authorized investment during the =
period the investment does not have the minimum rating.  An entity shall =
take all prudent measures that are consistent with its investment policy =
to liquidate an investment that does not have the minimum rating.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.022.  EXPANSION OF INVESTMENT =
AUTHORITY.  Expansion of investment authority granted by this chapter =
shall require a risk assessment by the state auditor or performed at the =
direction of the state auditor, subject to the legislative audit =
committee's approval of including the review in the audit plan under =
Section 321.013.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.  Amended by Acts 2003, 78th Leg., ch. 785, Sec. 42, eff. =
Sept. 1, 2003.

Sec. 2256.023.  INTERNAL MANAGEMENT REPORTS. =
 (a)  Not less than quarterly, the investment officer shall prepare and =
submit to the governing body of the entity a written report of =
investment transactions for all funds covered by this chapter for the =
preceding reporting period.
(b)  The report must:
(1)  describe in detail the investment =
position of the entity on the date of the report;
(2)  be prepared =
jointly by all investment officers of the entity;
(3)  be signed by =
each investment officer of the entity;
(4)  contain a summary statement, prepared in =
compliance with generally accepted accounting principles, of each pooled =
fund group that states the:
(A)  beginning market value for the reporting =
period;
(B)  additions and changes to the market value =
during the period;  
(C)  ending market value for the period;  =
and
(D)  fully =
accrued interest for the reporting period;
(5)  state the book value and market value =
of each separately invested asset at the beginning and end of the =
reporting period by the type of asset and fund type invested;
(6)  state the =
maturity date of each separately invested asset that has a maturity =
date;
(7)  state the account or fund or pooled group =
fund in the state agency or local government for which each individual =
investment was acquired;  and
(8)  state the compliance of the investment =
portfolio of the state agency or local government as it relates =
to:
(A)  the =
investment strategy expressed in the agency's or local government's =
investment policy;  and
(B)  relevant provisions of this chapter.
(c)  The report shall =
be presented not less than quarterly to the governing body and the chief =
executive officer of the entity within a reasonable time after the end =
of the period.
(d)  If an entity invests in other than money =
market mutual funds, investment pools or accounts offered by its =
depository bank in the form of certificates of deposit, or money market =
accounts or similar accounts, the reports prepared by the investment =
officers under this section shall be formally reviewed at least annually =
by an independent auditor, and the result of the review shall be =
reported to the governing body by that auditor.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.  Amended by Acts 1997, 75th Leg., ch. 1421, Sec. 12, eff. =
Sept. 1, 1997.

Sec. 2256.024.  SUBCHAPTER CUMULATIVE.  (a)  =
The authority granted by this subchapter is in addition to that granted =
by other law.  Except as provided by Subsection (b), this subchapter =
does not:
(1)  prohibit an investment specifically =
authorized by other law;  or
(2)  authorize an investment specifically =
prohibited by other law.
(b)  Except with respect to those investing =
entities described in Subsection (c), a security described in Section =
2256.009(b) is not an authorized investment for a state agency, a local =
government, or another investing entity, notwithstanding any other =
provision of this chapter or other law to the contrary.
(c)  Mortgage =
pass-through certificates and individual mortgage loans that may =
constitute an investment described in Section 2256.009(b) are authorized =
investments with respect to the housing bond programs operated by:
(1)  the Texas =
Department of Housing and Community Affairs or a nonprofit corporation =
created to act on its behalf;
(2)  an entity created under Chapter 392, Local =
Government Code;  or
(3)  an entity created under Chapter 394, Local =
Government Code.
Added by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.025.  SELECTION OF AUTHORIZED =
BROKERS.  The governing body of an entity subject to this subchapter or =
the designated investment committee of the entity shall, at least =
annually, review, revise, and adopt a list of qualified brokers that are =
authorized to engage in investment transactions with the entity.
Added by Acts 1997, 75th Leg., ch. 1421, Sec. 13, eff. =
Sept. 1, 1997.

Sec. 2256.026.  STATUTORY COMPLIANCE.  All =
investments made by entities must comply with this subchapter and all =
federal, state, and local statutes, rules, or regulations.
Added by Acts 1997, 75th Leg., ch. 1421, Sec. 13, eff. =
Sept. 1, 1997.

SUBCHAPTER B. MISCELLANEOUS PROVISIONS

Sec. 2256.051.  ELECTRONIC FUNDS TRANSFER.  =
Any local government may use electronic means to transfer or invest all =
funds collected or controlled by the local government.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.052.  PRIVATE AUDITOR.  =
Notwithstanding any other law, a state agency shall employ a private =
auditor if authorized by the legislative audit committee either on the =
committee's initiative or on request of the governing body of the =
agency.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995.

Sec. 2256.053.  PAYMENT FOR SECURITIES =
PURCHASED BY STATE.  The comptroller or the disbursing officer of an =
agency that has the power to invest assets directly may pay for =
authorized securities purchased from or through a member in good =
standing of the National Association of Securities Dealers or from or =
through a national or state bank on receiving an invoice from the seller =
of the securities showing that the securities have been purchased by the =
board or agency and that the amount to be paid for the securities is =
just, due, and unpaid.  A purchase of securities may not be made at a =
price that exceeds the existing market value of the securities.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1423, Sec. 8.67, eff. Sept. 1, =
1997.

Sec. 2256.054.  DELIVERY OF SECURITIES =
PURCHASED BY STATE.  A security purchased under this chapter may be =
delivered to the comptroller, a bank, or the board or agency investing =
its funds.  The delivery shall be made under normal and recognized =
practices in the securities and banking industries, including the book =
entry procedure of the Federal Reserve Bank.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1423, Sec. 8.68, eff. Sept. 1, =
1997.

Sec. 2256.055.  DEPOSIT OF SECURITIES =
PURCHASED BY STATE.  At the direction of the comptroller or the agency, =
a security purchased under this chapter may be deposited in trust with a =
bank or federal reserve bank or branch designated by the comptroller, =
whether in or outside the state.  The deposit shall be held in the =
entity's name as evidenced by a trust receipt of the bank with which the =
securities are deposited.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. =
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1423, Sec. 8.69, eff. Sept. 1, =
1997.
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