2023 Texas Statutes › Agriculture Code › Title 4 - Agricultural Organizations › Chapter 59 - Farm and Ranch Finance Program › Subchapter B. Bonds › Section 59.016. Investments

Text of section as amended by Acts 1995, 74th Leg., ch. 265, Sec. 3
Sec. 59.016.  INVESTMENTS.  (a)  The authority shall give timely instruction to the board of the dates on which principal on bonds matures and interest becomes payable.  The board shall administer the fund accordingly.
(b)  Money in the fund that is not immediately committed to paying principal of and interest on the bonds or to paying expenses as provided by Section 59.015 of this code may be invested by the board in:
(1)  a direct security repurchase agreement or reverse security repurchase agreement made with a state or national bank domiciled in this state or with a primary dealer approved by the federal reserve system;
(2)  a direct obligation of or obligation the principal and interest of which are guaranteed by the United States government;
(3)  a direct obligation of or obligation guaranteed by the Federal Home Loan Banks, the Federal National Mortgage Association, the Federal Farm Credit System, the Student Loan Marketing Association, the Federal Home Loan Mortgage Corporation, or a successor to one of those organizations;
(4)  a bankers' acceptance that:
(A)  is eligible for purchase by a member of the federal reserve system;
(B)  matures in 270 days or less;  and
(C)  is issued by a bank that has received the highest short-term credit rating by a nationally recognized investment rating firm;
(5)  commercial paper that:
(A)  matures in 270 days or less;  and
(B)  has received the highest short-term credit rating by a nationally recognized investment rating firm;
(6)  a contract that is written by the board in which the board grants the purchaser the right to purchase securities in the board's marketable securities portfolio at a specified price over a specified period and for which the board is paid a fee and that specifically prohibits naked-option or uncovered option trading;
(7)  an obligation of a state or of an agency, county, city, or other political subdivision of a state or a mutual fund composed of those obligations;
(8)  an investment instrument, obligation, or other evidence of indebtedness the payment of which is directly or indirectly guaranteed by the full faith and credit of the United States government;
(9)  an investment, account, depository receipt, or deposit that is fully:
(A)  insured by the Federal Deposit Insurance Corporation or a successor to that organization;  or
(B)  secured by a security described by Subdivision (2), (3), or (8) of this subsection;
(10)  a collateralized mortgage obligation fully secured by securities or mortgages issued or guaranteed by the Government National Mortgage Association (GNMA) or any entity identified by Subdivision (3) of this subsection;
(11)  a security or evidence of indebtedness issued by the Farm Credit System Financial Assistance Corporation, the Private Export Funding Corporation, or the Export-Import Bank;  and
(12)  any other investment authorized for investment of state funds by the comptroller under Section 404.024, Government Code.
(c)  In this section:
(1)  "Direct security repurchase agreement" means an agreement under which the board buys, holds for a specified time, and then sells back any of the following securities, obligations, or participation certificates:
(A)  a United States government security;
(B)  a direct obligation of or an obligation the principal and interest of which are guaranteed by the United States government;
(C)  a direct obligation of or an obligation guaranteed by the Federal Home Loan Banks, the Federal National Mortgage Association, the Federal Farm Credit System, the Student Loan Marketing Association, the Federal Home Loan Mortgage Corporation, or a successor to one of those organizations;  or
(D)  any other investment instrument, obligation, or other evidence of indebtedness the payment of which is directly or indirectly guaranteed by the full faith and credit of the United States government.
(2)  "Market value" means the fair and reasonable prevailing price at which a security is being sold on the open market at the time of the appraisement of the security by the board.
(3)  "Reverse security repurchase agreement" means an agreement under which the board sells and after a specified time buys back any of the securities, obligations, or participation certificates listed by Subdivision (1) of this subsection.
Added by Acts 1993, 73rd Leg., ch. 542, Sec. 1, eff. Sept. 1, 1993.  Amended by Acts 1995, 74th Leg., ch. 265, Sec. 3, eff. Aug. 28, 1995;  Acts 1997, 75th Leg., ch. 1423, Sec. 2.09, eff. Sept. 1, 1997.