By: Duncan S.B. No. 983
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority, and to liability in connection with the
1-3 authority, of the boards of trustees of certain state retirement
1-4 systems to contract with professional investment managers.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 815.301, Government Code, is amended by
1-7 amending Subsections (b) and (c) and adding Subsections (g), (h),
1-8 and (i) to read as follows:
1-9 (b) The board of trustees may delegate its authority under
1-10 Subsection (a) to the executive director. The board of trustees,
1-11 [or] the executive director, or an investment manager with whom the
1-12 board contracts under Subsection (c) may, under the standard of
1-13 care provided by Section 815.307, invest and reinvest any of the
1-14 retirement system's assets and may commingle assets of the trust
1-15 fund and the law enforcement and custodial officer supplemental
1-16 retirement fund with the assets of the Judicial Retirement System
1-17 of Texas Plan Two for investment purposes, as long as proportionate
1-18 ownership records are maintained and credited. Investments may
1-19 include home office facilities, including land, equipment, and
1-20 office building, used in administering the retirement system.
1-21 (c) The board of trustees may contract with private
1-22 professional investment managers to invest on behalf of the board
1-23 or assist the board in investing the assets of the retirement
1-24 system.
1-25 (g) In a contract entered into under Subsection (c) for
2-1 investing system assets on behalf of the board of trustees, the
2-2 board shall specify any policies, requirements, or restrictions,
2-3 including criteria for determining the quality of investments and
2-4 for the use of standard rating services, that the board adopts for
2-5 investments of the system. The board at any time may, and at
2-6 frequent intervals shall, monitor the investments made by the
2-7 investment manager and may contract for professional evaluation
2-8 services to fulfill this requirement.
2-9 (h) An investment manager with whom the board of trustees
2-10 contracts under Subsection (c) who assumes fiduciary
2-11 responsibilities to the retirement system is considered to agree
2-12 that the laws of this state govern the performance of the manager's
2-13 responsibilities to the system and to submit to the jurisdiction of
2-14 the courts of this state. Venue of an action involving a breach of
2-15 a duty owed by an investment manager to the retirement system or
2-16 its participants is in Travis County.
2-17 (i) The board of trustees, a trustee, or an employee of the
2-18 retirement system is not liable, personally or in the person's
2-19 capacity as a trustee or employee, for the acts, omissions, or
2-20 decisions of an investment manager to whom fiduciary
2-21 responsibilities have been delegated under this section.
2-22 SECTION 2. Section 825.301, Government Code, is amended by
2-23 amending Subsection (b) and adding Subsections (f), (g), and (h) to
2-24 read as follows:
2-25 (b) The board of trustees may contract with private
2-26 professional investment managers to invest on behalf of the board
3-1 or assist the board in investing the assets of the retirement
3-2 system.
3-3 (f) In a contract entered into under Subsection (b) for
3-4 investing system assets on behalf of the board of trustees, the
3-5 board shall specify any policies, requirements, or restrictions,
3-6 including criteria for determining the quality of investments and
3-7 for the use of standard rating services, that the board adopts for
3-8 investments of the system. The board at any time may, and at
3-9 frequent intervals shall, monitor the investments made by the
3-10 investment manager and may contract for professional evaluation
3-11 services to fulfill this requirement.
3-12 (g) An investment manager with whom the board of trustees
3-13 contracts under Subsection (b) who assumes fiduciary
3-14 responsibilities to the retirement system is considered to agree
3-15 that the laws of this state govern the performance of the manager's
3-16 responsibilities to the system and to submit to the jurisdiction of
3-17 the courts of this state. Venue of an action involving a breach of
3-18 a duty owed by an investment manager to the retirement system or
3-19 its participants is in Travis County.
3-20 (h) The board of trustees, a trustee, or an employee of the
3-21 retirement system is not liable, personally or in the person's
3-22 capacity as a trustee or employee, for the acts, omissions, or
3-23 decisions of an investment manager to whom fiduciary
3-24 responsibilities have been delegated under this section.
3-25 SECTION 3. Section 840.301, Government Code, is amended by
3-26 adding Subsections (d), (e), and (f) to read as follows:
4-1 (d) The board of trustees may contract with private
4-2 professional investment managers for the purposes and in the manner
4-3 provided by Section 815.301 for the investment of assets under
4-4 Chapter 815.
4-5 (e) An investment manager with whom the board of trustees
4-6 contracts under Subsection (d) who assumes fiduciary
4-7 responsibilities to the retirement system is considered to agree
4-8 that the laws of this state govern the performance of the manager's
4-9 responsibilities to the system and to submit to the jurisdiction of
4-10 the courts of this state. Venue of an action involving a breach of
4-11 a duty owed by an investment manager to the retirement system or
4-12 its participants is in Travis County.
4-13 (f) The board of trustees, a trustee, or an employee of the
4-14 retirement system is not liable, personally or in the person's
4-15 capacity as a trustee or employee, for the acts, omissions, or
4-16 decisions of an investment manager to whom fiduciary
4-17 responsibilities have been delegated under this section.
4-18 SECTION 4. This Act takes effect immediately if it receives
4-19 a vote of two-thirds of all the members elected to each house, as
4-20 provided by Section 39, Article III, Texas Constitution. If this
4-21 Act does not receive the vote necessary for immediate effect, this
4-22 Act takes effect September 1, 2001.