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<br />Art. 842a-2 BONDS-COUNTY, MUNICIPAL, ETC.
<br />T1Ue 22
<br />ment securities dealer, lIB defined by the Federal Reserve, or a bank domiciled in this
<br />state; and
<br />(7) certificates of deposit issued by savings and loan lIBsociations domiciled in this state
<br />that are:
<br />(A) guaranteed or insured by the Federal Savings and Ulan Insurance Corporation or
<br />its successor; or
<br />(B) secured by obligations that are described by Subdivisions (l){ 4). of this Bubsection,
<br />which are intended toJnclude all direct federal agency or instrumentality issued mortgage
<br />badced securities that have a market value of not less than the principal amount of the
<br />certificates.
<br />(b) In addition to investment in obligations, certificates, or agreements described in
<br />Subsection (a) of this section, bond proceeds of an incorporated city or town, a county, a
<br />public school district, or a navigation district, or local revenue of an institution of higher
<br />education, may be invested in common trust funds or comparable investment devices
<br />owned or administered by banks domiciled in this state and whose lIBsets consist
<br />exclnaively of all or a combination of the obligations descn'bed by Subsection (a) of this
<br />section. Common trust funds of banks domiciled in this state may be used if they:
<br />(1) are available;'
<br />(2) comply with the provisions of the Internal Revenue Code of 1986 and applicable
<br />federal regulationa governing the investment of bond proceeds; and
<br />(3) meet the cash flow requirements and the investment needs .of the political subdivi.
<br />sion or institution.
<br />(c) In this section:
<br />(1) "Bond proceeds" includes but is not limited to proceeds from the sale of bonds and
<br />reserves and funds maintained for debt service purposes.
<br />(2) "Prime domestic bankers' acceptances" means a bankers' acceptance With a stated
<br />maturity of 270 days or less from the date of its issuance that will be, in accordance with
<br />its terms, liquidated in full at maturity, that is eligible for collateral for borrowing from a
<br />Federal Reserve Bank, and that is accepted by a bank organized and existing under the
<br />laws of the United States or any state, the short-term obligations of which (or of a bank
<br />holding company of which the bank is the largest subsidiary) are rated at lellBt A-I, P-I,
<br />or the equivalent by at lellBt one nationally recognized credit rating agency.
<br />(3) "RepurehllBe agreement" m~ans a, simultaneona agreement to buy, hold for a'
<br />specified time, and then sell back at a future date, obligations described by Subsection
<br />(aXI) of this section, the principal and interest of which are guaranteed by the United
<br />States or any of its agencies, in market value of not less than the principal amount of the
<br />funds disbursed. The term includes direct security repurchllBe agreements and reverse
<br />security repurehllBe agreements.
<br />....w..
<br />Tezt of subsec. (d) effective August g8, 1989, for institutions of higher
<br />education and in effect for entities other than institutions of higher edu.
<br />cation upon approval of constitutional amendment proposed by Acts 1989,
<br />11st Leg., S.J.R. No. 59, as provided in Acts '1989, 118t Leg., eh. 628, 9 5
<br />
<br />(d) In addition to the investments described by Subsection (a) of this section, an entity
<br />listed in that subsection may, in accordance with this Act, purchllBe, sell, and invest its
<br />funds and funds under its control in an SECregistered, no-load money market mutual
<br />fund with a dollar.weighted average portfolio maturity of 120 days or less whose lIBsets
<br />consist exclusively of the obligationa that are descn'bed by Subsection (a) of this section
<br />and whose investment objectives include seeking to maintain a stable net lIBset value of n
<br />per share. No enti listed in Subs 'on a of this section is authorized by this Act to
<br />invest in the a gate more than 20 rcent 0 . e un a ance,
<br />e n roce , ID mone mar e mutual fu 'bed in this su see on or Ul
<br />mY-ea I n or un un er I n exc u in bond rocee .
<br />mar e mutua ID an a xeee s rcent of 'the total assets of the
<br />money mar e mutual fund.
<br />
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<br />288
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