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.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
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.