By Duncan                                             S.J.R. No. 20
         77R3279 ESH-D                           
                                 A JOINT RESOLUTION
 1-1     proposing a constitutional amendment relating to the authority to
 1-2     invest and manage 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.  The[, in the bonds
1-17     of the United States, the State of Texas, or counties in said
1-18     State, or in such other securities, and under such restrictions as
1-19     may be prescribed by law; and the] State shall be responsible for
1-20     all investments.
1-21           SECTION 2.  Section 5, Article VII, Texas Constitution, is
1-22     amended by amending Subsection (d) and adding Subsections (d-1),
1-23     (d-2), and (e) to 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 two members appointed by the governor, one member
 2-3     appointed by the lieutenant governor, one member appointed by the
 2-4     speaker of the house of representatives, one member appointed by
 2-5     the State Board of Education, and the chief executive officer of
 2-6     the state agency responsible for public education, who serves as an
 2-7     ex officio member.  To be eligible for appointment to the board, a
 2-8     person must have appropriate expertise in investing institutional
 2-9     funds.  Appointed members serve staggered terms of four years, with
2-10     the terms of two or three members expiring February 1 of each
2-11     odd-numbered year.
2-12           (d-1)  In making the initial appointments to the Permanent
2-13     School Fund Investment Board:
2-14                 (1)  the governor shall appoint one person to a term
2-15     expiring February 1, 2003, and one to a term expiring February 1,
2-16     2005;
2-17                 (2)  the lieutenant governor and the speaker of the
2-18     house of representatives shall each appoint one person to a term
2-19     expiring February 1, 2005; and
2-20                 (3)  the State Board of Education shall appoint one
2-21     person to a term expiring February 1, 2003.
2-22           (d-2)  Subsection (d-1) of this section and this subsection
2-23     expire January 1, 2003.
2-24           (e)  In [Notwithstanding any other provision of this
2-25     constitution, in] managing the assets of the permanent school fund,
2-26     the Permanent School Fund Investment Board [State Board of
2-27     Education] may acquire, exchange, sell, supervise, manage, or
 3-1     retain, through procedures and subject to restrictions it
 3-2     establishes and in amounts it considers appropriate, any kind of
 3-3     investment, including investments in the Texas growth fund created
 3-4     by Article XVI, Section 70, of this constitution, that persons of
 3-5     ordinary prudence, discretion, and intelligence, exercising the
 3-6     judgment and care under the circumstances then prevailing, acquire
 3-7     or retain for their own account in the management of their affairs,
 3-8     not in regard to speculation but in regard to the permanent
 3-9     disposition of their funds, considering the probable income as well
3-10     as the probable safety of their capital.
3-11           SECTION 3.  This proposed constitutional amendment shall be
3-12     submitted to the voters at an election to be held November 6, 2001.
3-13     The ballot shall be printed to permit voting for or against the
3-14     proposition:  "The constitutional amendment providing for the
3-15     transfer of authority to invest and manage the permanent school
3-16     fund from the State Board of Education to the Permanent School Fund
3-17     Investment Board."