Recent Texas Attorney General Opinions of Interest to Cities

Note:  Included opinions are from May 12, 2015 through June 10, 2015.

Opinion No. KP-0022 (Public Funds Investment Act):  The Public Funds Investment Act (Act) does not prohibit an investment pool from creating and investing in a subsidiary, provided that (1) the investment pool’s governing body determines that doing so is reasonably necessary to fulfill the investment pool’s statutory functions and duties; and (2) the governing bodies of the investing entities, the investment pool, and the subsidiary otherwise comply with the Act’s regulations and standards. A court could conclude that a subsidiary that is wholly-owned and controlled by an investment pool is itself an investment pool with the authority to invest public funds if ultimately it acts on behalf of two or more local governments, state agencies, or a combination of those entities. Subsection 2256.016(g)(2) of the Act requires the board of an investment pool subject to its terms to be composed of both pool participants and independent qualified advisors, although the board is not required to be composed of an equal number of such persons. The Act does not prohibit the members of a board of an investment pool from serving as the board of a wholly-owned subsidiary. The Act does not prohibit an investment pool from being formed under the laws of another state provided that state’s laws are consistent with the Act and other Texas law applicable to an entity doing business in Texas.