By Telford                                            H.B. No. 2416
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the investment of public funds in mutual funds; and
    1-3  declaring an emergency.
    1-5        SECTION 1.  Section 2256.011, Government Code, is hereby
    1-6  amended by redesignating subsection (b) as subsection (c), amending
    1-7  subsection (c), and adding a new subsection (b), to read as
    1-8  follows:
    1-9        (b)  In addition to a no-load money market mutual fund
   1-10  permitted as an authorized investment in subsection (a) above, a
   1-11  no-load mutual fund is an authorized investment under this
   1-12  subchapter if the mutual fund:
   1-13              (1)  is registered with the Securities and Exchange
   1-14  Commission;
   1-15              (2)  has an average weighted maturity of less than two
   1-16  years;
   1-17              (3)  is invested exclusively in obligations described
   1-18  by (i) subsections (1) and (4) of Section 2256.006 and (ii) Section
   1-19  2256.008; and
   1-20              (4)  is continuously rated as to investment quality by
   1-21  at least two nationally recognized investment rating firms of not
   1-22  less than AA or its equivalent.
   1-23        (c)  An entity is not authorized by this section to:
    2-1              (1)  invest in the aggregate more than 80 percent of
    2-2  its monthly average fund balance, excluding bond proceeds and
    2-3  reserves and other funds held for debt service in money market
    2-4  mutual funds described in subsection (a) or mutual funds described
    2-5  in subsection (b), either separately or collectively; or
    2-6              (2)  invest its funds or funds under its control,
    2-7  excluding bond proceeds and reserves and other funds held for debt
    2-8  service, in any one <money market> mutual fund (described in
    2-9  subsection (a) or subsection 9b) in an amount that exceeds 10
   2-10  percent of the total assets of the <money market> mutual fund.
   2-11        SECTION 2.  This Act shall take effect September 1, 1995.
   2-12        SECTION 3.  The importance of this legislation and the
   2-13  crowded condition of the calendars in both houses create an
   2-14  emergency and an imperative public necessity that the
   2-15  constitutional rule requiring bills to be read on three separate
   2-16  days in each house be suspended, and this rule is hereby suspended.