By:  Duncan                                           S.B. No. 1545
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                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 [persons of ordinary prudence, discretion, and intelligence
1-11     exercise in the management of their affairs in regard to the
1-12     investments of their funds considering probable income as well as
1-13     probable safety of their capital] prudent investors, exercising
1-14     reasonable care, skill, and caution, would acquire or retain in
1-15     light of the purposes, terms, distribution requirements, and other
1-16     circumstances of the fund then prevailing, taking into
1-17     consideration the investment of all the assets of the fund rather
1-18     than a single investment.
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
 2-1     and unrealized, in the fair market value of the assets of an
 2-2     endowment fund over the historic dollar value of the fund to the
 2-3     extent prudent under the standard provided by Section 163.007.
 2-4           SECTION 3.  Subsection (e), Section 163.004, Property Code is
 2-5     repealed.
 2-6           SECTION 4.  This Act takes effect immediately if it is
 2-7     enacted, as required by Section 39, Article III, Texas
 2-8     Constitution, by a vote of two-thirds of all the members elected to
 2-9     each house.  If this Act does not receive the votes required for
2-10     immediate effect, this Act takes effect on August 27, 2001.