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<br />(5) n:gistl) funds dcposiled with the county or district clerk under Chapter 117. Local Government
<br />
<br />Code: or
<br />
<br />(6) a deferred compensation plan that qualilies under either Section 40 J (k)m 457 of Ih(~ Intemal
<br />Revenue Code of 1986 {26 D,S.C. Section I et seq-l, as amended,
<br />(b) This subchapter does nol appl)' lU an invcstnH:nt donated to an investing entity for a particular purpose or
<br />under terms of use speci fied b) thc donor.
<br />Amended by Acts 1995, 74th Leg., ch. 402, See, L dI Sept. I, 1995; Acts 1997, 751h Leg" eh, 505, Sec. 24, elL Sept.
<br />I, 1997; ACls 1997, 751h Leg.. eh. 1421, Sec. 1. eff. Sept. I, 1997; Acts 1999, 76th Leg., ch. 62, Sec, 8.21, err. "cpt. I,
<br />1999: Acts J 999, 76th Leg" eh, 1454, Sec, 3, eff. ,>ept. I, 1999,
<br />
<br />Sec, 2156,005. INVESTMENT POLICIES, INVESTMENT STRATEGIES; INVESTMENT OFFICER, (al
<br />The governing body of an investing entity shall adopt by rule, order, ordinance. or resolution, as appropriate, a written
<br />investment policy regarding the investment of its funds and funds under its control.
<br />(b) The investment policies must.
<br />( I) be wri Hen:
<br />(2) primarily emphasize safety of principal and liquidity;
<br />0) address investmcrlt diversification, yield, and nl<nurity and the quality anu capability ofinveSllllcnt
<br />management: and
<br />(4) include:
<br />(A) a list of the Iypes of authorized inveslments in which the investing entity's funds may he
<br />
<br />invested;
<br />
<br />(13:1 the maximum allowable slated rmnurity of any individual investmenl owned hy tile ~nlit):
<br />
<br />(C) for pooled ttHld groul)s, thc maximum dollar-weighted averagemalurit} allowed based on
<br />the slated maturity date for the portfolio;
<br />(0) methods to monitor the market price ofinvestmcnts acquired with public funds, and
<br />(E) a requirement tor selllcrnelll of all transactions, except investment pool funds and lllutua!
<br />funds_ on a delivery versus paymel1t basis,
<br />(e) The investment policies may provide that bids for certificates of deposit be solicited'
<br />(1) orally:
<br />(2) in writlflg:
<br />(3) e!cclronl<:ally; or
<br />(4) in any combination of those methods,
<br />(d) As an integral part of an investment pulicy, the govel11ing body shall adopt a separate written investment
<br />strategy for each oflhe tlmds or group offunds under its conlrol, Each investment straleg)' mllst describe the investmem
<br />objectives for the panicular ttmd using the following priorities in order ofill1portance:
<br />(I) understanding of the suitability of the investmclllto the financial requirements of the entity:
<br />(2) preservation and safety of principal;
<br />(3) liquidity;
<br />(4) marketability of the investment if the need arises to liquidate lhe inveslment before maturity:
<br />(5) diversification ofthe investment portfolio: and
<br />(6) yield,
<br />(e) The governing body of an investing cntlt)' shall review Its investment policy and lJ\vcslrnelll strutcgies nOl
<br />less than annually. The goveming body shall adopt a wriuen instrument by rule, order, ordinance. or resolution staling
<br />that It has reviewed the invcstment polk) and investment strategies Hnd that the \\'Titten instrument so adopted shall
<br />rccord any changes mad;: to either the investment pu! icy or investment strategies,
<br />(f) Each investing entity shHII designate, by rule, order, ordinance, or resolution. as appropriate, one or more
<br />officers or employees orthe Slale agency, local government, or inveSlmCI11 pool as investment oificer to be responsible
<br />for the investment of its funds consistent with the ime5tment polic~ adopted b) the entity [I' the goveming bz)d) (1 r an
<br />investing, entity has contracted with another invcSling entity 10 invest its funds, the investmenl officer of the other
<br />investing entity is considered to be the investment of/icer of the lirst investing entity ti)r purposes of this chapter.
<br />1\ uthl'rJI)' gmnted to a person to invest an entity's hlllds is effective until rescinded by the investing entity, until the
<br />expiration of the officer's term or the termination ofthc person's employment by the investing entity. or if an investment
<br />management I1m1, unlil the expiration of the contracl with the investing eMity. In the administration of the duties ofal1
<br />investment officer. the person designated as invesllllcnl ofticer shrill exercise the judgmem and care, under prevailing
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