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<br />APPENDIX D <br /> <br />PUBLIC FUNDS COLLATERAL ACT <br />(Texas Government Code Section 2257) <br />(Revised 1997) <br /> <br />SUBCHAPTER A. GENERAL PROVISIONS <br /> <br />2257.001 Short Title <br />This chapter may be cited as the Public Funds Collateral Act. <br /> <br />2257.002 Definitions <br />In this chapter: <br />(1) "Bank holding company" has the meaning assigned by Section 1.002(a), Texas Banking <br />Act. <br />(2) Repealed by Acts 1997 75th leg, ch 891, Sec 3.22(4) effSept 11997 <br />(3) "Control" has the meaning assigned by Section 1.002(a), Texas Banking Act. <br />(4) "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 <br />authorized by law to accept a pubic entity's demand or time deposit. <br />(5) "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 <br />average life of 10 years or less and does not constitute a high-risk mortgage security; <br />or <br />(E) a floating rate collateralized mortgage obligation that does not constitute a high- <br />risk mortgage security. <br />(6) "Investment security" means: <br />(A) an obligation that in the opinion of the Attorney General of the United States is <br />a general obligation ofthe United States and backed by its full faith and credit; <br />(B) a general or specific obligation issued by a public agency, that is payable from <br />taxes, 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 />[The Public Funds Investment Act] <br />(7) "Permitted institution" means: <br />(A) a Federal Reserve Bank; <br />(B) a clearing corporation as defined in Section 8.102(c), Business and Commerce <br />Code; <br />(C) a bank eligible to be a custodian under Section 2257.041; or <br />(D) a state or nationally chartered bank that is controlled by a bank holding company <br /> <br />City of San Marcos Investment Policy <br /> <br />Page 33 <br />