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APPENDIX D <br />COLLATERAL FOR PUBLIC FUNDS <br />Chapter 2257, Texas Government Code <br />Subchapter A. General Provisions <br />Effective As Of September 1, 2003 <br />§ 2257.001. Short Title <br />This chapter maybe cited as the Public Funds Collateral Act. <br />Added by Acts 1993, 73rd Leg, ch. 268, § 1, eff. Sept.1,1993,Acts 2003, 78th Leg, eff Sept 1, 2003. <br />§ 2257.002. Definitions In this chapter: <br />(1) "Bank holding company" has the meaning assigned by Section 31.002(a), Finance Code. <br />(2) "Control" has the meaning assigned by Section 31.002(a), Finance Code. <br />(3) "Deposit of public funds" means public funds of a public entity that: <br />(A) the comptroller does not manage under Chapter 404; and <br />(B) are held as a demand or time deposit by a depository institution expressly authorized by <br />law to accept a public entity's demand or time deposit. <br />(4) "Eligible security" means: <br />(A) a surety bond; <br />(B) an investment security; <br />(C) an ownership or beneficial interest in an investment security, other than an option <br />contract to purchase or sell an investment security; <br />(D) a fixed-rate collateralized mortgage obligation that has an expected weighted average life <br />of 10 years or less and does not constitute ahigh-risk mortgage security; or <br />(E) a floating-rate collateralized mortgage obligation that does not constitute ahigh-risk <br />mortgage security. <br />(5) "Investment security" means: <br />(A) an obligation that in the opinion of the attorney general of the United States is a general <br />obligation of the United States and backed by its full faith and credit; <br />(B) a general or special obligation issued by a public agency that is payable from taxes, <br />revenues, or a combination of taxes and revenues; or <br />(C) a security in which a public entity may invest under Subchapter A, Chapter 2256. <br />(6) "Permitted institution" means: <br />(A) a Federal Reserve Bank; <br />(B) a clearing corporation, as defined by Section 8.102, Business & Commerce Code; <br />(C) a bank eligible to be a custodian under Section 2257.041; or <br />City of San Marcos Investment Policy Page 32 <br />