SECTION 100.1045. Investment of State Funds

(a) This section applies to a charter holder unless alternative requirements for investing state funds have been approved by the commissioner of education under §100.1006 of this title (relating to Optional Open-Enrollment Charter Provisions for Contracting and Purchasing), and the open-enrollment charter has been amended by the commissioner to adopt the approved procedures.

(b) A charter holder shall invest state funds in accordance with Government Code, §§2256.009-2256.016.

(1) A requirement in those sections that applies to a school district or the board of trustees of a school district applies to a charter school, the governing body of a charter holder, or the governing body of a charter school.

(2) State funds invested by a charter holder shall be maintained in a discrete charter investment account, separate and distinct from the operating accounts for the charter school and separate and distinct from any investment accounts related to non-charter activities.

(3) A charter holder shall invest state funds in accordance with any applicable provision or covenant contained in a debt instrument, bond indenture, or similar agreement.

(4) Nothing in this subsection shall authorize the investment of state or federal grant funds, unless investment of such funds is expressly authorized under the terms of the grant.

(c) Investment of state funds 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.

(1) Investment of state funds shall be governed by the following investment objectives, in order of priority:

(A) preservation and safety of principal;

(B) liquidity; and

(C) yield.

(2) In determining whether a charter holder, or its employee or agent, has exercised prudence with respect to an investment decision respecting state funds, the determination shall be made taking into consideration:

(A) 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

(B) whether the investment decision was consistent with the written investment policy of the entity.

Source Note: The provisions of this §100.1045 adopted to be effective April 18, 2002, 27 TexReg 3110; amended to be effective September 18, 2014, 39 TexReg 7295