74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis HB74(R) - Bill Analysis1877 House Committee Report
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis BILL ANALYSIS
Higher Education Committee
H.B. 187774(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis C.S.H.B. 1877
By: Stiles
03-17-95
Committee Report (Substituted)
BACKGROUND
Virtually all public institutions of higher education have
statutory language allowing the board of regents of the particular
institution to delegate certain powers and duties of the board to
committees, officers, or employees of the board.74(R) - Bill AnalysisThe statute of
the board of regents of The University of Texas System has been
interpreted as not allowing them delegatory powers granted to other
governing boards.74(R) - Bill Analysis
In the last session, Chapter 163, Property Code, was amended to
apply to all public and private institutions of higher education.
This chapter governs the management of institutional funds of those
institutions.74(R) - Bill AnalysisAmong other things, it specifically authorizes
governing boards of institutions of higher education to delegate
their investment powers and duties to officers, employees,
subcommittees and other agents of the board.74(R) - Bill AnalysisIn addition, the
chapter specifically authorizes institutions to contract with
investment professionals and corporations outside of the
institution for the performance of certain duties.74(R) - Bill AnalysisAlthough this
section applies to virtually all funds under the management and
control of the various governing boards, it does not apply to the
Permanent University Fund.74(R) - Bill Analysis
PURPOSE
As proposed, C.S.H.B. 1877 allows the board of regents of The
University of Texas System by rule to delegate a power or duty of
the board to a committee, officer, employee, or other agent of the
board.74(R) - Bill AnalysisIn addition, it authorizes the U.T. board of regents to
contract with a non-profit corporation for the investment of the
permanent university fund to the same extent as the governing board
of an institution of higher education with respect to an
institutional fund under Chapter 163, Property Code.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does expressly grant
additional rulemaking authority to the board of regents of the
University of Texas System in Section 1 (Section 65.31 (g),
Education Code) and Section 2 (Section 65.34 (a), Education Code)
of the bill.
SECTION-BY-SECTION ANALYSIS
SECTION 1.74(R) - Bill AnalysisAmends Chapter 65 C, Education Code, by adding Section
65.31 (g) to read as follows:
74(R) - Bill Analysis74(R) - Bill Analysis Sec. 65.31.74(R) - Bill AnalysisGENERAL POWERS AND DUTIES.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (g)74(R) - Bill AnalysisThe board by rule may delegate a power or duty of the
74(R) - Bill Analysis74(R) - Bill Analysis board to a committee, officer, employee, or other agent of the
74(R) - Bill Analysis74(R) - Bill Analysis board.
SECTION 2.74(R) - Bill AnalysisAmends Chapter 65 C, Education Code, by amending
Section 65.34 to read as follows:
74(R) - Bill Analysis74(R) - Bill Analysis Sec. 65.34. CONTRACTS.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis Requires all contracts to be approved by the board or
74(R) - Bill Analysis74(R) - Bill Analysis otherwise entered into in accordance with rules of the board
74(R) - Bill Analysis74(R) - Bill Analysis relating to contracting authority.
SECTION 3.74(R) - Bill AnalysisAmends Chapter 66 A, Education Code, by amending
Section 66.08 to read as follows:
74(R) - Bill Analysis74(R) - Bill Analysis Sec. 66.08.74(R) - Bill AnalysisINVESTMENT MANAGEMENT.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (a)74(R) - Bill AnalysisAuthorizes the board to delegate investment authority and
74(R) - Bill Analysis74(R) - Bill Analysis contract for investment of the permanent university fund to
74(R) - Bill Analysis74(R) - Bill Analysis the same extent as the governing board of an institution of
74(R) - Bill Analysis74(R) - Bill Analysis higher education with respect to an institutional fund under
74(R) - Bill Analysis74(R) - Bill Analysis Chapter 163, Property Code.
74(R) - Bill Analysis74(R) - Bill Analysis (b)74(R) - Bill AnalysisAuthorizes the board to enter into a contract with a non-profit corporation for the corporation to invest funds under
74(R) - Bill Analysis74(R) - Bill Analysis the control and management of the board, including the
74(R) - Bill Analysis74(R) - Bill Analysis permanent university fund.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (c)74(R) - Bill AnalysisThe board must approve the:
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(1)74(R) - Bill Analysisarticles of incorporation and bylaws;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(2)74(R) - Bill Analysisinvestment policies of the corporation;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(3)74(R) - Bill Analysisaudit and ethics committee of the corporation; and
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(4)74(R) - Bill Analysiscode of ethics of the corporation.
74(R) - Bill Analysis74(R) - Bill Analysis (d)74(R) - Bill AnalysisThe board shall consist of nine members.74(R) - Bill AnalysisThe board may
74(R) - Bill Analysis74(R) - Bill Analysis appoint and remove members of the board of directors of the
74(R) - Bill Analysis74(R) - Bill Analysis corporation;74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (e)74(R) - Bill AnalysisThe board shall select one or more of the members of the
74(R) - Bill Analysis74(R) - Bill Analysis board of directors of the corporation from a list of
74(R) - Bill Analysis74(R) - Bill Analysis candidates with substantial background and expertise in
74(R) - Bill Analysis74(R) - Bill Analysis investments that is submitted to the board by the board of
74(R) - Bill Analysis74(R) - Bill Analysis regents of the Texas A&M University System;74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (f)74(R) - Bill AnalysisIf an investment contract entered includes the permanent
74(R) - Bill Analysis74(R) - Bill Analysis university fund within the scope of funds under the control
74(R) - Bill Analysis74(R) - Bill Analysis and management of the board, the board shall provide for an
74(R) - Bill Analysis74(R) - Bill Analysis annual financial audit of the permanent university fund;
74(R) - Bill Analysis74(R) - Bill Analysis (g)74(R) - Bill AnalysisThe corporation shall file quarterly reports.
74(R) - Bill Analysis74(R) - Bill Analysis (h)74(R) - Bill AnalysisThe corporation is subject to the Texas Non-Profit
74(R) - Bill Analysis74(R) - Bill Analysis Corporation Act.
74(R) - Bill Analysis74(R) - Bill Analysis (i) The corporation may not enter into an agreement or
74(R) - Bill Analysis74(R) - Bill Analysis transaction with a:
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(1)74(R) - Bill Analysisdirector, officer, or employee of the corporation;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(2)74(R) - Bill Analysisbusiness entity in which a director, officer, or
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisemployee of the corporation has an interest;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(3)74(R) - Bill Analysisformer director, officer or employee of the
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysiscorporation on or before the date the person ceased to be
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisa director, officer, or employee of the corporation.
74(R) - Bill Analysis74(R) - Bill Analysis (j)74(R) - Bill AnalysisAn agreement or transaction entered into in violation of
74(R) - Bill Analysis74(R) - Bill Analysis subsection (i) is void.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (k)74(R) - Bill AnalysisA person has an interest in a business entity if:
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(1)74(R) - Bill Analysisthe person owns 5 percent or more of the voting
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisstock or shares of the business entity;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(2)74(R) - Bill Analysisthe person owns 5 percent or more of the fair market
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisvalue of the business entity; or
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(3)74(R) - Bill Analysismoney received by the person from the business
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisentity exceeds five percent of the person's gross income
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysisfor the preceding calendar year.
74(R) - Bill Analysis74(R) - Bill Analysis (l)74(R) - Bill AnalysisThis section defines "board," "governing board,"
74(R) - Bill Analysis74(R) - Bill Analysis institutional fund," and "institution of higher education."
74(R) - Bill Analysis74(R) - Bill Analysis SECTION 4.74(R) - Bill Analysis74(R) - Bill Analysis Prior to implementing the first contract that
74(R) - Bill Analysis74(R) - Bill Analysis includes the permanent university fund the board shall retain
74(R) - Bill Analysis74(R) - Bill Analysis an independent accounting firm to perform a financial audit of
74(R) - Bill Analysis74(R) - Bill Analysis the permanent university fund.
74(R) - Bill Analysis74(R) - Bill Analysis SECTION 5.74(R) - Bill Analysis74(R) - Bill Analysis If any provision of this Act is held invalid,
74(R) - Bill Analysis74(R) - Bill Analysis the invalidity does not affect other provisions or
74(R) - Bill Analysis74(R) - Bill Analysis applications of this Act.74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis SECTION 6.74(R) - Bill Analysis74(R) - Bill Analysis Emergency clause.
74(R) - Bill Analysis74(R) - Bill Analysis Effective date:74(R) - Bill Analysisupon passage.
COMPARISON OF SUBSTITUTE TO ORIGINAL
The committee substitute in SECTION 1 amends Section 65.31,
Education Code, by adding subsection (g) as follows:
74(R) - Bill Analysis74(R) - Bill Analysis (g)74(R) - Bill AnalysisThe board by rule may delegate a power or duty of
74(R) - Bill Analysis74(R) - Bill Analysis the board to a committee, officer, employee, or other
74(R) - Bill Analysis74(R) - Bill Analysis agent of the board.
The original amends Section 65.31(c), Education Code, by adding
language to allow the board to delegate rules and regulations.
The committee substitute in SECTION 3 amends Section 66.08,
Education Code, as follows:
74(R) - Bill Analysis74(R) - Bill Analysis Deletes the language referring to the University of Texas
74(R) - Bill Analysis74(R) - Bill Analysis System.
The committee substitute in SECTION 3 amends Section 66.08(b),
Education Code, as follows:
74(R) - Bill Analysis74(R) - Bill Analysis (b)74(R) - Bill AnalysisAuthorizes the board to enter into a contract with a non-profit corporation for the corporation to invest funds under
74(R) - Bill Analysis74(R) - Bill Analysis the control and management of the board, including the
74(R) - Bill Analysis74(R) - Bill Analysis permanent university fund.74(R) - Bill AnalysisThe corporation may not engage in
74(R) - Bill Analysis74(R) - Bill Analysis any business other than investing funds designated by the
74(R) - Bill Analysis74(R) - Bill Analysis board under this contract.
The committee substitute in SECTION 3 amends Section 66.08(c),
Education Code, as follows:
74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (c)74(R) - Bill AnalysisThe board must approve the:
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(1)74(R) - Bill Analysisarticles of incorporation and bylaws;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(2)74(R) - Bill Analysisinvestment policies of the corporation;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(3)74(R) - Bill Analysisaudit and ethics committee of the corporation;
74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis74(R) - Bill Analysis(4)74(R) - Bill Analysiscode of ethics of the corporation.
The committee substitute in SECTION 3 amends Section 66.08(d),
Education Code, as follows:
74(R) - Bill Analysis74(R) - Bill Analysis
74(R) - Bill Analysis74(R) - Bill Analysis (d)74(R) - Bill AnalysisThe board may appoint and remove members of the board of
74(R) - Bill Analysis74(R) - Bill Analysis directors of the corporation;
74(R) - Bill Analysis74(R) - Bill Analysis
The committee substitute in SECTION 3 amends Section 66.08(e),
Education Code, as follows:
74(R) - Bill Analysis74(R) - Bill Analysis (e)74(R) - Bill AnalysisThe board shall select one or more of the members of the
74(R) - Bill Analysis74(R) - Bill Analysis board of directors of the corporation from a list of
74(R) - Bill Analysis74(R) - Bill Analysis candidates with substantial background and expertise in
74(R) - Bill Analysis74(R) - Bill Analysis investments that is submitted to the board by the board of
74(R) - Bill Analysis74(R) - Bill Analysis regents of the Texas A&M University System;
The committee substitute in SECTION 3 amends Section 66.08(f),
Education Code, as follows:
The committee substitute in SECTION 3 amends Section 66.08(g),(h),
(i), (j) and (k), Education Code.74(R) - Bill AnalysisThe original contains the same
language but is numbered differently in the substitute.
The committee substitute includes the following sections that were
not included in the original bill.
SECTION 4.74(R) - Bill AnalysisPrior to implementing the first contract that includes
the permanent university fund the board shall retain an independent
accounting firm to perform a financial audit of the permanent
university fund.
SECTION 5.74(R) - Bill Analysis74(R) - Bill Analysis If any provision of this Act is held invalid, the
invalidity does not affect other provisions or applications of this
Act.74(R) - Bill Analysis
SUMMARY OF COMMITTEE ACTION
H.B. 1877 was considered by the committee in a public hearing on
March 21, 1995.74(R) - Bill AnalysisThe bill was left pending.
H.B. 1877 was considered by the committee in a public hearing on
April 11, 1995.74(R) - Bill Analysis
The chair recognized Representative Mark Stiles to explain the
bill.
The committee considered a complete substitute for the bill.74(R) - Bill AnalysisTwo
amendments were offered to the substitute.74(R) - Bill Analysis
Amendment #1 was adopted without objection by a non-record vote.74(R) - Bill Analysis
Amendment #2 was withdrawn without objection by a non-record vote.
The substitute as amended was adopted without objection by a non-record vote.
The chair directed the staff to incorporate the amendment into the
substitute.
The following persons testified neutrally on the bill:
Mr. Thomas O. Hicks;
Mr. Thomas Ricks; and
Dr. William Cunnigham.
The following persons testified neutrally on the bill and submitted
a written report:
Mr. Jerry E. Turner.
The chair recognized Representative Mark Stiles to close.
The bill was reported favorably as substituted, with the
recommendation that it do pass and be printed, by a record vote of
7 ayes, 0 nays, 0 pnv, 2 absent.