(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 § 2256.009(a)(1), excluding those obligations described by § 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.
(d) § 1371.059(c) applies to the execution of a guaranteed investment contract by an investing entity.