By Duncan                                             S.B. No. 1545
         Substitute the following for S.B. No. 1545:
         By George                                         C.S.S.B. No. 1545
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the investment of the assets of certain funds of
 1-3     certain institutions of higher education.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Sections 51.0031(a), (c), and (d), Education Code,
 1-6     are amended to read as follows:
 1-7           (a)  A governing board may deposit funds under its control as
 1-8     provided in Section 51.003 [of this code], may invest funds under
 1-9     its control in accordance with Chapter 2256, Government Code and,
1-10     with regard to donations, gifts, and trusts, may establish
1-11     endowment funds that operate as trusts and are managed under
1-12     prudent investor [person] standards.
1-13           (c)  If a governing board has under its control at least $25
1-14     million in book value of endowment funds, such governing board may
1-15     invest all funds described in this section under prudent investor
1-16     [person] standards.
1-17           (d)  As used in this section, "prudent investor [person]
1-18     standard" is the standard of care described in Section 11b, Article
1-19     VII, [Section 11b, of the] Texas Constitution [, and means that
1-20     standard of judgment and care that persons of ordinary prudence,
1-21     discretion, and intelligence exercise in the management of their
1-22     affairs in regard to the investments of their funds considering
1-23     probable income as well as probable safety of their capital].
1-24           SECTION 2. This Act takes effect immediately if it receives a
 2-1     vote of two-thirds of all the members elected to each house, as
 2-2     provided by Section 39, Article III, Texas Constitution.  If this
 2-3     Act does not receive the vote necessary for immediate effect, this
 2-4     Act takes effect September 1, 2001.