By: Montford S.B. No. 1577
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the authority of the board of regents of The University
1-2 of Texas System to delegate certain powers and duties of the board.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 65.31(c), Education Code, is amended to
1-5 read as follows:
1-6 (c) The board has authority to promulgate and enforce such
1-7 other rules and regulations for the operation, control and
1-8 management of the university system and the component institutions
1-9 thereof as the board may deem either necessary or desirable,
1-10 including rules and regulations delegating to its committees,
1-11 officers, employees, or other agents the authority to perform such
1-12 duties and powers of the board as are designated by the board.
1-13 SECTION 2. Section 65.34(a), Education Code is amended to
1-14 read as follows:
1-15 (a) A contract <All contracts with architects, plan makers,
1-16 landscapers, or draftsmen, or with any other person, firm, or
1-17 corporation of whatever name or designation> shall be <absolutely
1-18 void unless> approved by the <signed written vote of a majority of
1-19 the> board or otherwise made and entered into in accordance with
1-20 rules and regulations of the board related to contracting authority
1-21 <in a regular or called meeting assembled>.
1-22 SECTION 3. Section 66.08, Education Code, is amended to read
1-23 as follows:
2-1 Sec. 66.08. <EXTERNAL> INVESTMENT MANAGEMENT <MANAGERS>.
2-2 (a) The board of regents of The University of Texas System may
2-3 delegate investment authority and contract for the investment of
2-4 the permanent university fund to the same extent as governing
2-5 boards of institutions of higher education are authorized to do for
2-6 institutional funds by the Uniform Management of Institutional
2-7 Funds Act (Chapter 163, Property Code) <with private investment
2-8 managers to assist the board in making investments of the permanent
2-9 university fund>.
2-10 (b) In addition to other investment powers granted to it,
2-11 the board may contract with a non-profit corporation and delegate
2-12 to it the authority to act for the board in the investment of such
2-13 funds under the control and management of the board as are
2-14 designated by the board, including the permanent university fund,
2-15 subject to the provisions of this section.
2-16 (c) If the board contracts with a non-profit corporation
2-17 under this section, the board shall:
2-18 (1) dedicate the corporation solely to managing the
2-19 investment of funds under the control and management of the board
2-20 that are designated by the board;
2-21 (2) approve all articles of incorporation and by-laws
2-22 of the corporation and any amendment to the articles or the
2-23 by-laws;
2-24 (3) approve all investment policies of the corporation
2-25 and any changes to those policies;
3-1 (4) have the power to appoint and remove directors of
3-2 the corporation;
3-3 (5) appoint at least three board members and the
3-4 Chancellor of The University of Texas System as directors of the
3-5 corporation;
3-6 (6) require the corporation to file quarterly reports
3-7 with the board concerning such matters as may be required by the
3-8 board;
3-9 (7) require the corporation to be subject to all
3-10 provisions of the Texas Non-Profit Corporation Act (Article
3-11 1396-1.01, Vernon's Texas Civil Statutes), including those
3-12 provisions allowing the state auditor to audit books and records of
3-13 corporations assisting state agencies; and
3-14 (8) require the corporation to have an audit and
3-15 ethics committee and a code of ethics approved by the board.
3-16 (d) A corporation entering into an agreement with the board
3-17 pursuant to Subsection (b) of this section may not enter into any
3-18 agreement or transaction:
3-19 (1) with a director, officer, or employee of the
3-20 corporation acting in other than their official capacity with the
3-21 corporation, or with a business entity in which a director,
3-22 officer, or employee of the corporation has a business interest; or
3-23 (2) with a former director, officer, or employee of
3-24 the corporation or with a business entity in which a former
3-25 director, officer, or employee of the corporation has a business
4-1 interest, on or before the second anniversary of the date the
4-2 person ceased to be a director, officer, or employee of the
4-3 corporation.
4-4 (e) An agreement or transaction entered into in violation of
4-5 Subsection (d) of this section is void and unenforceable.
4-6 (f) For purposes of this section, a person has an interest
4-7 in a business entity if:
4-8 (1) the person owns five percent or more of the voting
4-9 stock or shares of the business entity or owns five percent or more
4-10 of the fair market value of the business entity; or
4-11 (2) funds received by the person from the business
4-12 entity exceed five percent of the person's gross income for the
4-13 previous year.
4-14 (g) In this section:
4-15 (1) "Board" means the board of regents of The
4-16 University of Texas System;
4-17 (2) "Governing board," "institutional funds," and
4-18 "institution of higher education" have the meanings assigned by the
4-19 Uniform Management of Institutional Funds Act (Chapter 163,
4-20 Property Code).
4-21 SECTION 4. The importance of this legislation and the
4-22 crowded condition of the calendars in both houses create an
4-23 emergency and an imperative public necessity that the
4-24 constitutional rule requiring bills to be read on three several
4-25 days in each house be suspended, and this rule is hereby suspended,
5-1 and that this Act take effect and be in force from and after its
5-2 passage, and it is so enacted.