In this section, “State financial institution” means an institution that: has a branch in the State that takes deposits; and is: a bank incorporated under the laws of any state or the United States; a trust company or savings bank incorporated under the laws of the State; or a savings and loan association incorporated under the laws of the State or the United States. This section applies to the following governmental entities: the governing body of each county; the governing body of each municipality; each county board of education, including the Baltimore City Board of School Commissioners; each road, drainage, improvement, construction, or soil conservation district or commission; the Upper Potomac River Commission; and any other political subdivision or body politic and corporate of the State. Subject to Subtitle 2 of this title and notwithstanding any provision of local law or ordinance, a governmental entity or its authorized agent: in accordance with § 6–222 of the State Finance and Procurement Article may: invest and reinvest in obligations or repurchase agreements all unexpended money in any fund or account of which the governmental entity or its authorized agent has custody or control; and sell, redeem, or exchange an investment or reinvestment made under this item; or may deposit unexpended money in: an interest–bearing time deposit account or savings account at a federally insured bank or federally insured savings and loan association in the State; or the Local Government Investment Pool established under § 17–302 of this title. Except as provided in subsections (e) and (f) of this section, a governmental entity or its authorized agent may deposit unexpended money in a federally insured bank or federally insured savings and loan association under subsection (b)(2)(i) of this section only if the bank or savings and loan association gives as security for the deposit collateral of a type specified in § 6–202 of the State Finance and Procurement Article. A governmental entity or its authorized agent may deposit unexpended money in a federally insured bank or federally insured savings and loan association without the security required under subsection (d) of this section if: the money is initially deposited in a State financial institution chosen by the depositor; the State financial institution arranges for the further deposit of the money into one or more certificates of deposit in an amount not exceeding the applicable Federal Deposit Insurance Corporation maximum insurance coverage limit, issued by one or more federally insured banks or federally insured savings and loan associations for the account of the depositor; when the money is deposited and the certificates of deposit are issued, the State financial institution receives deposits from customers of other banks or savings and loan associations in an amount at least equal to the amount of money initially deposited by the depositor; each certificate of deposit issued for the depositor’s account is insured by the Federal Deposit Insurance Corporation for 100% of the principal of and accrued interest on the certificate of deposit; and the State financial institution acts as custodian for the depositor with respect to the certificates of deposit issued for the depositor’s account. A governmental entity or its authorized agent may deposit unexpended money in a federally insured bank or federally insured savings and loan association without the security required under subsection (d) of this section if: the money is initially placed for deposit with a State financial institution chosen by the depositor to arrange for the redeposit of the money through a deposit placement program that meets the requirements under this subsection; on or after the date that the money of the governmental entity is received, the State financial institution: arranges for the redeposit of the money into one or more deposit accounts, each in an amount of not more than the applicable Federal Deposit Insurance Corporation maximum insurance coverage limit, in one or more federally insured banks or federally insured savings and loan associations for the account of the depositor; and acts as custodian for the depositor with respect to the money deposited into the accounts; any money of a governmental entity deposited into a State financial institution in accordance with this subsection and held by that State financial institution at the close of a business day that is in excess of the amount insured by the Federal Deposit Insurance Corporation is secured in accordance with this title; the full amount of the money of the governmental entity redeposited by the State financial institution into deposit accounts in federally insured banks or federally insured savings and loan associations under this subsection is insured by the Federal Deposit Insurance Corporation; and on the same date that the money of the governmental entity is redeposited under this subsection, the State financial institution receives an amount of deposits from customers of other banks or savings and loans in accordance with the deposit placement program that is at least equal to the amount of the money of the governmental entity redeposited by the State financial institution. The interest or income from an investment or deposit made under this section: shall be credited to the fund from which the investment or deposit was made; and may be invested or deposited as provided in this section. Notwithstanding paragraph (1) of this subsection, if the money invested or deposited under this section is from a fund that contains the proceeds of the issuance of bonds or other obligations, the issuer may use the interest or income from the investment or deposit to repay the principal of or interest on the bonds or other obligations. A governmental entity or its authorized agent may withdraw or alter an investment or deposit made under this section: to meet the requirements for which the money is held; or for reinvestment in accordance with this section.

In this section, “other postemployment benefits” means: postemployment health care benefits; and postemployment benefits provided separately from a pension plan. Notwithstanding § 17–101 of this subtitle, the trustees or other officers in charge of a pension or retirement system or fund, other postemployment benefits fund, trust fund account, fund for self–insurance purposes, or facility closure reserve fund of a political subdivision of the State, a unit of a political subdivision of the State, or the Upper Potomac River Commission: may: invest and reinvest money in their custody or control as provided by: a law enacted by the governing body of the political subdivision; or in the case of the Upper Potomac River Commission, rules or procedures established by the Commission; and sell, redeem, or exchange an investment or reinvestment made under this item; and shall comply with fiduciary standards that at least meet the standards in Title 21, Subtitle 2 of the State Personnel and Pensions Article in connection with money in their custody or control. Notwithstanding any other law, a political subdivision of the State or a unit of a political subdivision of the State may enter into an agreement with a third party contractor or vendor for the management or investment of money intended for other postemployment benefits. An agreement entered into under this subsection includes the authority to: create pooled investments under the stewardship of: a political subdivision of the State or a unit of a political subdivision of the State; or a separate body under an agreement with a political subdivision of the State; create one or more accounts to be managed in coordination with other funds or investments by a third party under an agreement with a political subdivision of the State; and create distinct funding accounts for payment on behalf of employees of a unit of a political subdivision of the State under an agreement with the political subdivision. Notwithstanding any other law, a political subdivision of the State or a unit of a political subdivision of the State may enter into an agreement with a third party contractor or vendor for the management or investment of money in a facility closure reserve fund. An agreement entered into under this subsection includes the authority to: create pooled investments under the stewardship of: a political subdivision of the State or a unit of a political subdivision of the State; or a separate body under an agreement with a political subdivision of the State; and create one or more accounts to be managed in coordination with other funds or investments by a third party under an agreement with a political subdivision of the State.

This section applies to bond sale proceeds and other money that are: subject to arbitrage, rebate, or similar limitations under federal tax law; and in the custody or control of the controller, director of finance, or similar official of a charter county or Baltimore City. Notwithstanding any other law, the controller, director of finance, or similar official of a charter county or Baltimore City may: invest and reinvest bond proceeds and other money to which this section applies: in bonds, notes, or other obligations that are: of investment grade quality as established by a nationally recognized rating agency; and issued by or on behalf of a state or a unit, political subdivision, public corporation, special district, or authority of a state; and directly or through a trust or fund that restricts investments to obligations of investment grade quality; and sell, redeem, or exchange an investment or reinvestment made under item (1) of this subsection.

This section applies to the following governmental entities: the governing body of each county; the governing body or chief fiscal or administrative officer of each municipality; the governing body or chief fiscal or administrative officer of: each road, drainage, improvement, construction, or soil conservation district or commission; or the Upper Potomac River Commission; each county board of education, including the Baltimore City Board of School Commissioners; any other political subdivision or body politic and corporate of the State; a unit of a political subdivision of the State; and the trustees or other officers in charge of a pension or retirement system or fund of: the State; a political subdivision of the State; or a unit of the State or of a political subdivision of the State. Notwithstanding any other law, when a governmental entity is required or authorized to invest in, purchase, or take as collateral a bond, an obligation, or any other evidence of indebtedness of the United States, the governmental entity may invest in, purchase, or take as collateral an obligation or security of or other interest in an open–end or closed–end management type investment company or investment trust registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80A–1 et seq., if: the portfolio of the investment company or investment trust is limited to: direct obligations of the United States; and repurchase agreements that are fully collateralized by obligations of the United States; and the investment company or investment trust takes delivery of the collateral directly or through an authorized custodian.