2001-010-RES AFFIRMING COP HAS COMPLIED WITH REQUIREMENTS OF PUBLIC FUNDS INVESTMENT ACT

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1. Validity Insofar as this article purports to authorize political corporations and political subdivisions to invest public funds in bank-oriented money market mutual funds or other securities of private entities, it conflicts with article III. section 52. of the Texas Constitution. Op.Ally.Gen.1988, No. JM-975. 2,. Delegation of authority The lnterlocal Cooperation Act, article 4413(32c), V.T.eS., does not authorize local governments to delegate to another entity their authority to make investments; nor does article 842a-2. V.T.eS., or article 4413(34c), authorize such delegation. Op.Ally.Gen.1988, No. JM-932. * 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: Copr. @West200l No Claim to Orig. U.S. Govt. Works