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<br />(1) equally of participants in the pool and other persons who do not have a business <br />relationship with the pool and are qualified to advise the pool, for a public funds <br />investment pool created under Chapter 791 and managed by a state agency; or <br />(2) of participants in the pool and other persons who do not have a business <br />relationship with the pool and are qualified to advise the pool, for other investment <br />pools. <br />(h) To maintain eligibility to receive funds from and invest funds on behalf of an entity <br />under this chapter, an investment pool must be continuously rated no lower than AAA or <br />AAA-m or at an equivalent rating by at least one nationally recognized rating service. <br /> <br />Sec. 2256.017 Existing Investments. <br />An entity is not required to liquidate investments that were authorized investment at the time of <br />purchase. <br /> <br />Sec. 2256.019 Ratings of Certain Investment Pools. <br />A public funds investment pool must be continuously rated no lower than AAA or AAA-m or at an <br />equivalent rating by at least one nationally recognized rating service or no lower than investment <br />grade by at least one nationally recognized rating service with a weighted average maturity no greater <br />than 90 days. <br /> <br />Sec. 2256.020 Authorized Investments: Institutions of Higher Education. <br />In addition to the authorized investments permitted by this subchapter, an institution of higher <br />education may purchase, sell, and invest its funds and funds under its control in the following: <br />(1) cash management and fixed income funds sponsored by organizations exempt from <br />federal income taxation under Section 501(t), Internal Revenue Code of 1986 (26 U.S.c. <br />Section 501(t)); <br />(2) negotiable certificates of deposit issued by a bank that has a certificate of deposit rating <br />of at least 1 or the equivalent by a nationally recognized credit rating agency or that is <br />associated with a holding company having a commercial paper rating of at least A-I, P-l, or <br />the equivalent by a nationally recognized credit rating agency; and <br />(3) corporate bonds, debentures, or similar debt obligations rated by a nationally recognized <br />investment rating firm in one of the two highest long-term rating categories, without regard <br />to gradations within those categories. <br /> <br />Sec. 2256.0201 Authorized Investment; Municipal Utility <br />(a) A municipality that owns a municipal electric utility that is engaged in the distribution <br />and sale of electric energy or natural gas to the public may enter into a hedging contract and <br />related security and insurance agreements in relation to fuel oil, natural gas, and electric <br />energy to protect against loss due to price fluctuations. A hedging transaction must comply <br />with the regulations of the Commodity Futures Trading Commission and the Securities and <br />Exchange Commission. If there is a conflict between the municipal charter of the <br />municipality and this chapter, this chapter prevails. <br />(b) A payment by the municipally owned electric or gas utility under a hedging contract or <br />related agreement in relation to fuel supplies or fuel reserves is a fuel expense, and the utility <br />may credit any amounts it receives under the contract or agreement against fuel expenses. <br /> <br />City of San Marcos Investment Policy <br /> <br />Page 29 <br />