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<br />I. or the equivalent by a nationally recognized credit rating agency or that is associated with a holding oompan) having a
<br />commercial paper rating of <ll least :\ -1, P-1, or the cqlJivalent b) a nationally recognized credit rating agene), i\lld
<br />
<br />(3) corporate bonds, debentures. or similar debt obligatiolls rated by a nationall) recognized
<br />invcstment rating finn in one l,fthe two highest JOJl~-tcriT1 rating cah:gorics, without regard to gradatiollswithmthosl:
<br />categories.
<br />'\dded by Acts 1995. 74th Leg" ch, 402. !,ec. 1, ell Sept. 1, 11)95,
<br />
<br />Sec. 2256,0201, AL TJ-IORIZED INVEST\IENTS: MUNIClPAL UTILITY. (a) A municipality that owns a
<br />municipal electric utility that is engaged in the distribution and sale of electric energy or natural gas to the public may
<br />emer into a hedging contract and related security and insur'4llCe agreements in relation to fuel oil. natural gas, and e1cctr'lc 0
<br />energy to protect against loss due to price fluctuatiolls. A hedging transaction must comply with the regulations ofdle
<br />Commodity Futures Trading Commission and the Securities and Exchange C()l1uni~sion, If there is a conflict between
<br />the municipal charter orthc municipality and this chapter, this chapter prevails.
<br />
<br />{b) A payment by a municipally owned electric or gas utdil) under a hedging contract or related agreement in
<br />relation 10 fuel supplies or fuel reserves is II fuell:\pense. and the utility may credit any amounts it receives under the
<br />contruct or agreemcnt ugainst had expenses.
<br />
<br />(c) The governing body ora municipally (,wlled electric ur gas utilit) OJ' the body vested with powcrtl1 manage
<br />and opcrate the municipally owned electric or gas utility may ser Jlolicy regarding hedging transactions.
<br />
<br />(dl In this section, "hedging" means the buying and sclling offuel oil, natural gas. and electric energy fulmes or
<br />options or simihlr contracts Oil those commodity hllllres as a proteclion against loss due to price fluctuation.
<br />Added by Acts 1999, 76th Leg.. ch, 405, See, 48, tlI Sept. 1, 1999
<br />
<br />Sec. 2256,0205. AUTHORIZED INVESTvIENTS: DEC'O\1MISSIONING TRUST (a) In this section
<br />
<br />(I) "Decommissioning trust" JI'IC:Il1S n trust ere:Jtcd to provide the Nuclear Regulatory Commission
<br /><l55UflmCe that funds will be aVililable for decommissioning purposes as required under 10 C.F.R, Part 50 or olher similar
<br />regulation_
<br />(2) "Funds" includes any money held in a decomll1issioning trust regardless of whether the mone) is
<br />cOllsidered to be public funds under this subchapter
<br />(b) In addition to olher investments aUlborized under this subchapter, a municipality thar owns a municipal
<br />elecrric utility rhat is engaged in the distribUlillll and sale of electric energy or mltural f,'lIS to the public may invest funds
<br />held in a decommissioning trust in any investment authorized by Subtitle B, Tille 9, Proper!) Code,
<br />Added by Acts 2005, 791h Leg., eh, 121, Sec, 1, elf Sept 1,200),
<br />Sec, 2256.021. EFFECT OF LOSS OF REQl'IRED RA T11\G, An investment that requires a minimum rating
<br />under this subchapter does not qualify as an authorized investment dlJring the period the investment docs not have the
<br />minimum rating. An entity shall lake all prudent measures that are ellllsistent with its investment policy to liqUidate an
<br />invesunent that docs not have the minimum rating,
<br />Added by Acts 1995, 74th Leg,. ch, 402, Sec, I, eff Sept, I, 1995.
<br />
<br />Set. 2256.022. EXPANSION OF INVEST/'o"fENT AUTHOIHTY, Expansion of invcstmenrauthorit) granted by
<br />Ihis chapter shall requ ire a risk a5se.ssment by the state auditor or perl"onned at the direction of the state auditor. subject to
<br />tile legislative audit committee's approval (Jfincluding the review in the audit plan limier ",eetion 321.013.
<br />Added by Acts 1995. 74th Leg" eh. 402, Sec. I, err. Sept. I, 1995, Amended by ACTS 2003. 78th Leg" ch. 785, See, 42,
<br />elf. Sept. I. 2003,
<br />
<br />Sec. 2256.023. INTER"!!\ L MAN .\GEj\IENT REPORTS I. al NOIIess than quarterly, the investment officcr
<br />shall prepare and submit to the goveming body of l.he entity a written report of investment transactions for all f'UIl<:iS
<br />covered by this chapler for the preceding rcponin!!, period.
<br />(b) The report muse
<br />(I) describe in derail the investment position ofUle entity on the date of the report;
<br />(2) be preparedjoinl1y by all investment uniecrs of the entity;
<br />
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