DEFINITIONS AND CONSTRUCTION.

In this subchapter:

(1) "Authority" means the Texas Water Resources Finance Authority.

(2) "Authorized investments" means:

(A) direct obligations of or obligations the principal of and interest on which are guaranteed by the United States;

(B) direct obligations of or participation certificates guaranteed by the Federal Intermediate Credit Bank, Federal Land Banks, Federal National Mortgage Association, Federal Home Loan Banks, and Banks for Cooperatives;

(C) direct obligations of or obligations the principal of and interest on which are guaranteed by the State of Texas;

(D) bonds of cities, counties, and other political subdivisions of this state, other than bonds issued by a political subdivision to finance a project covered by this chapter;

(E) certificates of deposit of state and national banks that satisfy the requirements of Section 2.015, Chapter 240, Acts of the 69th Legislature, Regular Session, 1985 (Article 4393-1, Vernon's Texas Civil Statutes), and the rules of the comptroller and if the authority or a financial institution acting solely as agent for the authority possesses the collateral securing those deposits; and

(F) direct security repurchase agreements made only with state or national banks domiciled in the state under which the authority buys, holds in its possession or the possession of a financial institution acting solely as agent for the authority for a specified time, and then sells back any of the following securities, obligations, or participation certificates:

(i) United States government securities;

(ii) direct obligations of or obligations the principal of and interest on which are guaranteed by the United States; and

(iii) direct obligations of or participation certificates guaranteed by the Federal Intermediate Credit Bank, Federal Land Banks, Federal National Mortgage Association, Federal Home Loan Banks, and Banks for Cooperatives.

(3) "Board" means the board of directors of the authority.

(4) "Bond" means any type of interest-bearing obligation, including any bond, note, bond anticipation note, or other evidence of indebtedness under this chapter.

(5) "Development board" means the Texas Water Development Board.

(6) "Director" means a member of the board.

(7) "Political subdivision" means a city, county, or other body politic or corporate of the state, including any district or authority created under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution, a state agency, an entity created by an interstate compact to which the state is a party, and any nonprofit water supply corporation created and operating under Chapter 67.

(8) "Political subdivision bonds" means bonds, notes, or other securities that were issued by and any debt or other contractual obligations that were incurred by a political subdivision for the purpose of financing or refinancing projects for water resource development and conservation, water quality enhancement, flood control, drainage, subsidence control, recharge, chloride control, agricultural soil and water conservation, desalinization, or any combination of these purposes.