Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

      By Williams                                     H.B. No. 2937

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to delegation and portfolio management of the Teacher

 1-3     Retirement System of Texas.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Section 825, Government Code, is

 1-6     amended by adding Section 825.1031 to read as follows:

 1-7           Sec. 825.1031.  DELEGATION AND PORTFOLIO MANAGEMENT.  (a)  In

 1-8     administering the retirement system trust and investing its asset,

 1-9     the board of trustees may delegate responsibility, discretion, and

1-10     authority to employees, asset managers, custodians and other agents

1-11     and entities in the manner that a prudent person would delegate

1-12     under the circumstances.

1-13           (b)  The board of trustees shall act with prudence in

1-14     deciding whether and how to delegate and in the selection and

1-15     supervision of those to whom it has delegated.  The board of

1-16     trustees must itself establish the retirement system's investment

1-17     objectives and programs, including asset allocations.

1-18           (c)  Whether a trustee has exercised prudence with respect to

1-19     an investment decision shall be determined not in isolation but in

1-20     the context of the trust portfolio and as a part of an overall

1-21     investment strategy, which should incorporate risk and return

1-22     objectives reasonably suited to the trust.

1-23           SECTION 2.  This Act takes effect September 1, 1997.

1-24           SECTION 3.  The importance of this legislation and the

 2-1     crowded condition of the calendars in both houses create an

 2-2     emergency and an imperative public necessity that the

 2-3     constitutional rule requiring bills to be read on three several

 2-4     days in each house be suspended, and this rule is hereby suspended.