Texas Statutes
Subchapter A. Authorized Investments for Governmental Entities
Section 2256.006. Standard of Care

Sec. 2256.006. STANDARD OF CARE. (a) Investments shall be made with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived. Investment of funds shall be governed by the following investment objectives, in order of priority:
(1) preservation and safety of principal;
(2) liquidity; and
(3) yield.
(b) In determining whether an investment officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration:
(1) the investment of all funds, or funds under the entity's control, over which the officer had responsibility rather than a consideration as to the prudence of a single investment; and
(2) whether the investment decision was consistent with the written investment policy of the entity.
Amended by Acts 1995, 74th Leg., ch. 402, Sec. 1, eff. Sept. 1, 1995.

Structure Texas Statutes

Texas Statutes

Government Code

Title 10 - General Government

Subtitle F - State and Local Contracts and Fund Management

Chapter 2256 - Public Funds Investment

Subchapter A. Authorized Investments for Governmental Entities

Section 2256.001. Short Title

Section 2256.002. Definitions

Section 2256.003. Authority to Invest Funds; Entities Subject to This Chapter

Section 2256.004. Applicability

Section 2256.005. Investment Policies; Investment Strategies; Investment Officer

Section 2256.006. Standard of Care

Section 2256.007. Investment Training; State Agency Board Members and Officers

Section 2256.008. Investment Training; Local Governments

Section 2256.009. Authorized Investments: Obligations Of, or Guaranteed by Governmental Entities

Section 2256.010. Authorized Investments: Certificates of Deposit and Share Certificates

Section 2256.011. Authorized Investments: Repurchase Agreements

Section 2256.0115. Authorized Investments: Securities Lending Program

Section 2256.012. Authorized Investments: Banker's Acceptances

Section 2256.013. Authorized Investments: Commercial Paper

Section 2256.014. Authorized Investments: Mutual Funds

Section 2256.015. Authorized Investments: Guaranteed Investment Contracts

Section 2256.016. Authorized Investments: Investment Pools

Section 2256.017. Existing Investments

Section 2256.019. Rating of Certain Investment Pools

Section 2256.020. Authorized Investments: Institutions of Higher Education

Section 2256.0201. Authorized Investments; Municipal Utility

Section 2256.0202. Authorized Investments: Municipal Funds From Management and Development of Mineral Rights

Section 2256.0203. Authorized Investments: Ports and Navigation Districts

Section 2256.0204. Authorized Investments: Independent School Districts

Section 2256.0205. Authorized Investments; Decommissioning Trust

Section 2256.0206. Authorized Investments: Hedging Transactions

Section 2256.0207. Authorized Investments: Public Junior College District Funds From Management and Development of Mineral Rights

Section 2256.0208. Local Government Investment of Bond Proceeds and Pledged Revenue

Section 2256.021. Effect of Loss of Required Rating

Section 2256.022. Expansion of Investment Authority

Section 2256.023. Internal Management Reports

Section 2256.024. Subchapter Cumulative

Section 2256.025. Selection of Authorized Brokers

Section 2256.026. Statutory Compliance