| (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.
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