By:  Smith, Ashley                                    H.B. No. 1541
       73R6267 E
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the management, investment, and expenditure of funds
    1-3  held by public institutions of higher education.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 163.002, Property Code, is amended to
    1-6  read as follows:
    1-7        Sec. 163.002.  Legislative Findings and Purpose.  (a) The
    1-8  legislature finds that:
    1-9              (1)  public and privately supported educational,
   1-10  religious, and charitable organizations perform essential and
   1-11  needed services in the state;
   1-12              (2)  uncertainty regarding legal restrictions on the
   1-13  management, investment, and expenditure of endowment funds of the
   1-14  organizations has in many instances precluded obtaining the highest
   1-15  available return on endowment funds; and
   1-16              (3)  the organizations, their officers, directors, and
   1-17  trustees, and the citizens of this state will benefit from removal
   1-18  of the uncertainty and by permitting endowment funds to be invested
   1-19  for the long-term goals of achieving growth and maintaining
   1-20  purchasing power without adversely affecting availability of funds
   1-21  for current expenditure.
   1-22        (b)  The purpose of this chapter is to provide guidelines for
   1-23  the management, investment, and expenditure of endowment funds of
   1-24  public and privately supported educational, religious, and
    2-1  charitable organizations in order to eliminate the uncertainty
    2-2  regarding legal restrictions on the management, investment, and
    2-3  expenditure of the funds and to enable the organizations to
    2-4  maximize their resources.
    2-5        SECTION 2.  Section 163.003(5), Property Code, is amended to
    2-6  read as follows:
    2-7              (5)  "Institution" means an institution of higher
    2-8  education as defined by Section 61.003, Education Code, and an
    2-9  incorporated or unincorporated organization organized and operated
   2-10  exclusively for educational, religious, or charitable purposes.
   2-11  The term does not include:
   2-12                    (A)  <an institution of higher education as
   2-13  defined by Section 61.003, Education Code, or other governmental
   2-14  entity, or> a foundation chartered for the benefit of an
   2-15  institution of higher education as defined by Section 61.003,
   2-16  Education Code <that type of institution or entity>, or the benefit
   2-17  of a component of that type of institution or entity; or
   2-18                    (B)  a private foundation as defined by Section
   2-19  509(a) of the Internal Revenue Code of 1986.
   2-20        SECTION 3.  The importance of this legislation and the
   2-21  crowded condition of the calendars in both houses create an
   2-22  emergency and an imperative public necessity that the
   2-23  constitutional rule requiring bills to be read on three several
   2-24  days in each house be suspended, and this rule is hereby suspended.