By: Duncan S.B. No. 1545
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the investment and use of the assets of certain
1-3 endowment funds of certain institutions of higher education.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection (d), Section 51.0031, Education Code,
1-6 is amended to read as follows:
1-7 (d) As used in this section, "prudent person standard" is
1-8 the standard of care described in Article VII, Section 11b, of the
1-9 Texas Constitution, and means that standard of judgment and care
1-10 that prudent investors, exercising reasonable care, skill, and
1-11 caution, would acquire or retain in light of the purposes, terms,
1-12 distribution requirements, and other circumstances of the fund then
1-13 prevailing, taking into consideration the investment of all the
1-14 assets of the fund rather than a single investment [persons of
1-15 ordinary prudence, discretion, and intelligence exercise in the
1-16 management of their affairs in regard to the investments of their
1-17 funds considering probable income as well as probable safety of
1-18 their capital].
1-19 SECTION 2. Subsection (a), Section 163.004, Property Code,
1-20 is amended to read as follows:
1-21 (a) A [Except as provided by Subsection (e), the] governing
1-22 board may appropriate for expenditure, for the uses and purposes
1-23 for which the fund is established, the net appreciation, realized
1-24 and unrealized, in the fair market value of the assets of an
1-25 endowment fund over the historic dollar value of the fund to the
2-1 extent prudent under the standard provided by Section 163.007.
2-2 SECTION 3. Subsection (e), Section 163.004, Property Code,
2-3 is repealed.
2-4 SECTION 4. This Act takes effect immediately if it is
2-5 enacted, as required by Section 39, Article III, Texas
2-6 Constitution, by a vote of two-thirds of all the members elected to
2-7 each house. If this Act does not receive the votes required for
2-8 immediate effect, this Act takes effect on August 27, 2001.