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<br />Acts 1995, 74th Leg.. ch. 76, ~ 5.45(c), (t). <br />V.T.CA. Government Code & 2256.011. <br /> <br />LIBRARY REFERENCES <br />2000 Main Volume <br /> <br />Municipal Corporations €;;:;;> 884. <br />States €;;:;;> 124. <br />WESTLA W Topic Nos. 268, 360. <br />C.J.S. Municipal Corporations ~ 1881. <br />C.J.S. States ~ 225. <br /> <br />NOTES OF DECISIONS <br /> <br />Type of securities 1 <br /> <br />1. Type of securities <br /> <br />The Public Funds Investment Act, V.T.C.S. article 842a-2, authorizes cities, counties, and certain other public and <br />nonprofit entities to invest their funds and funds under their control in mutual funds holding only adjustable rate <br />mortgages that obligate United States agencies provided that the mutual fund complies with section 2(d) of the act, <br />and provided that the entity invests no more of its money in the mutual fund than section 2(d) permits. <br />Op.Atty.Gen.1993, No. DM-202. <br /> <br />& 2256.015. Authorized investments: Guaranteed Investment Contracts <br /> <br />(a) A guaranteed investment contract is an authorized investment for bond proceeds under this subchapter if the <br />guaranteed investment contract: <br /> <br />(I) has a defined termination date; <br /> <br />(2) is secured by obligations described by Section 2256.oo9(a)(I), excluding those obligations described by Section <br />2256.009(b), in an amount at least equal to the amount of bond proceeds invested under the contract; and <br /> <br />(3) is pledged to the entity and deposited with the entity or with a third party selected and approved by the entity. <br /> <br />(b) Bond proceeds, other than bond proceeds representing reserves and funds maintained for debt service purposes, <br />may not be invested under this subchapter in a guaranteed investment contract with a term of longer than five years <br />from the date of issuance of the bonds. <br /> <br />(c) To be eligible as an authorized investment: <br /> <br />(I) the governing body of the entity must specifically authorize guaranteed investment contracts as an eligible <br />investment in the order, ordinance, or resolution authorizing the issuance of bonds; <br /> <br />(2) the entity must receive bids from at least three separate providers with no material financial interest in the <br />bonds from which proceeds were received; <br /> <br />(3) the entity must purchase the highest yielding guaranteed investment contract for which a qualifying bid is <br />received; <br /> <br />(4) the price of the guaranteed investment contract must take into account the reasonably expected drawdown <br />schedule for the bond proceeds to be invested; and <br /> <br />(5) the provider must certify the administrative costs reasonably expected to be paid to third parties in connection <br /> <br />COpT. @ West 2001 No Claim to Orig. U.S. Govt. Works <br />