Texas Agriculture Code 59.016 – Investments
(a) The authority shall give timely instruction to the board of the dates on which principal on bonds matures and interest becomes payable. The board shall administer the fund accordingly.
(b) Money in the fund that is not immediately committed to paying principal of and interest on the bonds or to paying expenses as provided by Section 59.015 of this code may be invested by the board in:
(1) a direct security repurchase agreement or reverse security repurchase agreement made with a state or national bank domiciled in this state or with a primary dealer approved by the federal reserve system;
(2) a direct obligation of or obligation the principal and interest of which are guaranteed by the United States government;
(3) a direct obligation of or obligation guaranteed by the Federal Home Loan Banks, the Federal National Mortgage Association, the Federal Farm Credit System, the Student Loan Marketing Association, the Federal Home Loan Mortgage Corporation, or a successor to one of those organizations;
(4) a bankers’ acceptance that:
(A) is eligible for purchase by a member of the federal reserve system;
(B) matures in 270 days or less; and
(C) is issued by a bank that has received the highest short-term credit rating by a nationally recognized investment rating firm;
(5) commercial paper that:
(A) matures in 270 days or less; and
(B) has received the highest short-term credit rating by a nationally recognized investment rating firm;
(6) a contract that is written by the board in which the board grants the purchaser the right to purchase securities in the board’s marketable securities portfolio at a specified price over a specified period and for which the board is paid a fee and that specifically prohibits naked-option or uncovered option trading;
(7) an obligation of a state or of an agency, county, city, or other political subdivision of a state or a mutual fund composed of those obligations;
(8) an investment instrument, obligation, or other evidence of indebtedness the payment of which is directly or indirectly guaranteed by the full faith and credit of the United States government;
(9) an investment, account, depository receipt, or deposit that is fully:
(A) insured by the Federal Deposit Insurance Corporation or a successor to that organization; or
(B) secured by a security described by Subdivision (2), (3), or (8) of this subsection;
(10) a collateralized mortgage obligation fully secured by securities or mortgages issued or guaranteed by the Government National Mortgage Association (GNMA) or any entity identified by Subdivision (3) of this subsection;
(11) a security or evidence of indebtedness issued by the Farm Credit System Financial Assistance Corporation, the Private Export Funding Corporation, or the Export-Import Bank; and
(12) any other investment authorized for investment of state funds by the comptroller under Section 404.024, Government Code.
Terms Used In Texas Agriculture Code 59.016
- Comptroller: means the state comptroller of public accounts. See Texas Government Code 312.011
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Federal Deposit Insurance Corporation: A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
- Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
- 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
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) In this section:
(1) “Direct security repurchase agreement” means an agreement under which the board buys, holds for a specified time, and then sells back any of the following securities, obligations, or participation certificates:
(A) a United States government security;
(B) a direct obligation of or an obligation the principal and interest of which are guaranteed by the United States government;
(C) a direct obligation of or an obligation guaranteed by the Federal Home Loan Banks, the Federal National Mortgage Association, the Federal Farm Credit System, the Student Loan Marketing Association, the Federal Home Loan Mortgage Corporation, or a successor to one of those organizations; or
(D) any other investment instrument, obligation, or other evidence of indebtedness the payment of which is directly or indirectly guaranteed by the full faith and credit of the United States government.
(2) “Market value” means the fair and reasonable prevailing price at which a security is being sold on the open market at the time of the appraisement of the security by the board.
(3) “Reverse security repurchase agreement” means an agreement under which the board sells and after a specified time buys back any of the securities, obligations, or participation certificates listed by Subdivision (1) of this subsection.
Text of section as amended by Acts 1995, 74th Leg., ch. 265, Sec. 3
<