By Keel H.J.R. No. 74
77R2283 KKA-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment relating to the investment and
1-2 management of the permanent school fund.
1-3 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 4, Article VII, Texas Constitution, is
1-5 amended to read as follows:
1-6 Sec. 4. (a) The lands herein set apart to the permanent
1-7 school [Public Free School] fund[,] shall be sold under such
1-8 regulations, at such times, and on such terms as may be prescribed
1-9 by law. The [; and the] Legislature shall not have power to grant
1-10 any relief to purchasers of that land [thereof].
1-11 (b) The proceeds of [such] sales of land of the permanent
1-12 school fund must be used to acquire other land for the [Public Free
1-13 School] fund as provided by law or [the proceeds shall be] invested
1-14 [by the comptroller of public accounts, as may be directed] by the
1-15 Permanent School Fund Investment Board [of Education herein]
1-16 provided for by Section 5(d) of this article[, in the bonds of the
1-17 United States, the State of Texas, or counties in said State, or in
1-18 such other securities, and under such restrictions as may be
1-19 prescribed by law; and the State shall be responsible for all
1-20 investments].
1-21 SECTION 2. Section 5, Article VII, Texas Constitution, is
1-22 amended by amending Subsection (d) and adding Subsection (e) to
1-23 read as follows:
1-24 (d) The Permanent School Fund Investment Board shall invest
2-1 and manage the assets of the permanent school fund. The board
2-2 consists of three members appointed by the governor, three members
2-3 appointed by the lieutenant governor, and three members appointed
2-4 by the speaker of the house of representatives. To be eligible for
2-5 appointment to the board, a person must have appropriate expertise
2-6 in investing institutional funds, as determined by the appointing
2-7 authority. For purposes of this subsection, "institutional funds"
2-8 means funds held by an incorporated or unincorporated organization
2-9 organized and operated exclusively for educational, religious, or
2-10 charitable purposes, an educational institution, or a foundation
2-11 chartered for the benefit of an educational institution.
2-12 (e) In [Notwithstanding any other provision of this
2-13 constitution, in] managing the assets of the permanent school fund,
2-14 the Permanent School Fund Investment Board [State Board of
2-15 Education] may acquire, exchange, sell, supervise, manage, or
2-16 retain, through procedures and subject to restrictions it
2-17 establishes and in amounts it considers appropriate, any kind of
2-18 investment, including investments in the Texas growth fund created
2-19 by Article XVI, Section 70, of this constitution, that prudent
2-20 investors, exercising reasonable care, skill, and caution, would
2-21 acquire or retain in light of the purposes, terms, distribution
2-22 requirements, and other circumstances of the fund then prevailing,
2-23 taking into consideration the investment of all the assets of the
2-24 fund rather than a single investment [persons of ordinary prudence,
2-25 discretion, and intelligence, exercising the judgment and care
2-26 under the circumstances then prevailing, acquire or retain for
2-27 their own account in the management of their affairs, not in regard
3-1 to speculation but in regard to the permanent disposition of their
3-2 funds, considering the probable income as well as the probable
3-3 safety of their capital].
3-4 SECTION 3. This proposed constitutional amendment shall be
3-5 submitted to the voters at an election to be held November 6, 2001.
3-6 The ballot shall be printed to permit voting for or against the
3-7 proposition: "The constitutional amendment providing for the
3-8 transfer of authority to invest and manage the permanent school
3-9 fund from the State Board of Education to the Permanent School Fund
3-10 Investment Board and modifying the standard used to determine
3-11 appropriate investment and management decisions."