Texas Education Code - Section 43.003. Investment Of Permanent School Fund
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§ 43.003. INVESTMENT OF PERMANENT SCHOOL FUND. In
compliance with this section, the State Board of Education may
invest the permanent school fund in the types of securities, which
must be carefully examined by the State Board of Education and be
found to be safe and proper investments for the fund as specified
below:
(1) securities, bonds, or other obligations issued,
insured, or guaranteed in any manner by the United States
Government or any of its agencies and in bonds issued by this state;
(2) obligations and pledges of The University of
Texas;
(3) corporate bonds, debentures, or obligations of
United States corporations of at least "A" rating;
(4) obligations of United States corporations that
mature in less than one year and are of the highest rating available
at the time of investment;
(5) bonds issued, assumed, or guaranteed by the
Inter-American Development Bank, the International Bank of
Reconstruction and Development (the World Bank), the African
Development Bank, the Asian Development Bank, and the International
Finance Corporation;
(6) bonds of counties, school districts,
municipalities, road precincts, drainage, irrigation, navigation,
and levee districts in this state, subject to the following
requirements:
(A) the securities, before purchase, must have
been diligently investigated by the attorney general both as to
form and as to legal compliance with applicable laws;
(B) the attorney general's certificate of
validity procured by the party offering the bonds, obligations, or
pledges must accompany the securities when they are submitted for
registration to the comptroller, who must preserve the
certificates;
(C) the public securities, if purchased, and when
certified and registered as specified under Paragraph (B), are
incontestable unless issued fraudulently or in violation of a
constitutional limitation, and the certificates of the attorney
general are prima facie evidence of the validity of the bonds and
bond coupons; and
(D) after the issuing political subdivision has
received the proceeds from the sales of the securities, the issuing
agency is estopped to deny their validity, and the securities are
valid and binding obligations;
(7) preferred stocks and common stocks that the State
Board of Education considers proper investments for the permanent
school fund, subject to the following requirements:
(A) in making all of those investments, the State
Board of Education shall exercise the judgment and care under the
circumstances then prevailing that persons of ordinary prudence,
discretion, and intelligence exercise in the management of their
own affairs, not in regard to speculation but in regard to the
permanent disposition of their funds, considering the probable
income as well as the probable safety of their capital;
(B) the company issuing the stock must be
incorporated in the United States, and the stocks must have paid
dividends for five consecutive years or longer immediately before
the date of purchase and the stocks, except for bank stocks and
insurance stocks, must be listed on an exchange registered with the
Securities and Exchange Commission or its successors; and
(C) not more than one percent of the permanent
school fund may be invested in stock issued by one corporation and
not more than five percent of the voting stock of any one
corporation will be owned; and
(8) notwithstanding any other law or provision of this
code, first lien real estate mortgage securities insured by the
Federal Housing Administration under the National Housing Act of
the United States, or in any other first lien real estate mortgage
securities guaranteed in whole or in part by the United States.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.
Section: 42.302 42.303 42.304 42.352 42.4101 43.001 43.002 43.003 43.0031 43.0032 43.0033 43.0034 43.004 43.005 43.006
Last modified: August 10, 2007
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