Texas Statutes
Subchapter C. Investment Pools
Section 424.105. Short-Term Investment Pool: Certain Short-Term Obligations

Sec. 424.105. SHORT-TERM INVESTMENT POOL: CERTAIN SHORT-TERM OBLIGATIONS. (a) Obligations contained in a short-term investment pool must meet the requirements of this section.
(b) The obligations must:
(1) have a rating by the securities valuation office of one or two, or an equivalent rating issued by a nationally recognized statistical rating organization recognized by the securities valuation office; or
(2) be issued by an issuer with outstanding obligations that have a rating described by Subdivision (1).
(c) The obligations must have:
(1) a remaining maturity of 397 days or less or a put that:
(A) entitles the holder to receive the principal amount of the obligation; and
(B) may be exercised through maturity at specified intervals not exceeding 397 days; or
(2) a remaining maturity of three years or less and a floating interest rate that resets at least quarterly on the basis of a current short-term index and is not subject to a maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes.
(d) For purposes of this section, a current short-term index is:
(1) a federal funds rate;
(2) the prime rate;
(3) the rate for treasury bills;
(4) the London InterBank Offered Rate; or
(5) the rate for commercial paper.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.

Sec. 424.106. SHORT-TERM INVESTMENT POOL: CERTAIN MONEY MARKET FUNDS. A short-term investment pool may contain a money market fund as described by 17 C.F.R. Section 270.2a-7 under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), as amended, that is:
(1) a government money market fund that at all times:
(A) invests only in obligations issued, guaranteed, or insured by the United States or collateralized repurchase agreements composed of those obligations; and
(B) qualifies for investment without a reserve under the Purposes and Procedures Manual of the securities valuation office or a successor publication; or
(2) a class one money market fund that at all times qualifies for investment using the bond class one reserve factor described by the Purposes and Procedures Manual of the securities valuation office.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.