1-1 By: Duncan, Lindsay S.J.R. No. 20
1-2 (In the Senate - Filed February 1, 2001; February 5, 2001,
1-3 read first time and referred to Committee on Education;
1-4 March 13, 2001, rereferred to Committee on Finance; April 4, 2001,
1-5 reported adversely, with favorable Committee Substitute by the
1-6 following vote: Yeas 8, Nays 2; April 4, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.J.R. No. 20 By: Duncan
1-8 SENATE JOINT RESOLUTION
1-9 proposing a constitutional amendment relating to the authority to
1-10 invest and manage the permanent school fund.
1-11 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 4, Article VII, Texas Constitution, is
1-13 amended to read as follows:
1-14 Sec. 4. (a) The lands herein set apart to the permanent
1-15 school [Public Free School] fund[,] shall be sold under such
1-16 regulations, at such times, and on such terms as may be prescribed
1-17 by law. The[; and the] Legislature shall not have power to grant
1-18 any relief to purchasers of that land [thereof].
1-19 (b) The proceeds of [such] sales of land of the permanent
1-20 school fund must be used to acquire other land for the [Public Free
1-21 School] fund as provided by law or the proceeds shall be invested
1-22 by the comptroller of public accounts, as may be directed by the
1-23 Permanent School Fund Investment Board [of Education herein]
1-24 provided for by Section 5(d) of this article. The[, in the bonds
1-25 of the United States, the State of Texas, or counties in said
1-26 State, or in such other securities, and under such restrictions as
1-27 may be prescribed by law; and the] State shall be responsible for
1-28 all investments.
1-29 SECTION 2. Section 5, Article VII, Texas Constitution, is
1-30 amended by amending Subsection (d) and adding Subsection (d-1),
1-31 (d-2), (e), (f), (g), and (h), to read as follows:
1-32 (d) The Permanent School Fund Investment Board shall invest
1-33 and manage the assets of the permanent school fund. The board
1-34 consists of two members appointed by the governor, one member
1-35 appointed by the lieutenant governor, one member appointed by the
1-36 speaker of the house of representatives, and one member appointed
1-37 by the State Board of Education. Those members appointed by the
1-38 governor shall be subject to confirmation by the senate. In
1-39 addition, the chief executive officer of the state agency
1-40 responsible for public education shall serve as an ex officio
1-41 member. To be eligible for appointment to the board, a person must
1-42 have appropriate expertise in investing institutional funds.
1-43 Appointed members serve staggered terms of four years, with the
1-44 terms of two or three members expiring February 1 of each
1-45 odd-numbered year.
1-46 (d-1) In making the initial appointments to the Permanent
1-47 School Fund Investment Board:
1-48 (1) the governor shall appoint one person to a term
1-49 expiring February 1, 2003, and one to a term expiring February 1,
1-50 2005;
1-51 (2) the lieutenant governor and the speaker of the
1-52 house of representatives shall each appoint one person to a term
1-53 expiring February 1, 2005; and
1-54 (3) the State Board of Education shall appoint one
1-55 person to a term expiring February 1, 2003.
1-56 (d-2) Subsection (d-1) of this section and this subsection
1-57 expire January 1, 2003.
1-58 (e) An individual appointed to serve on the Permanent School
1-59 Fund Investment Board serves at the pleasure of the appointing
1-60 entity and may be removed for good cause.
1-61 (f) For purposes of this section, good cause means:
1-62 (1) a serious violation of a law relating to the
1-63 Permanent School Fund Investment Board member's official duties as
1-64 a member of the board or to the conduct of public officials
2-1 generally;
2-2 (2) gross or persistent failure to perform the board
2-3 member's duties as a member of the board;
2-4 (3) conduct that is reasonably likely to undermine the
2-5 public's trust in the board member; or
2-6 (4) conduct that constitutes a felony or a crime of
2-7 moral turpitude, if the board member is charged with or convicted
2-8 of a criminal offense.
2-9 (g) For purposes of Subsection (f) of this section, failure
2-10 to attend any meetings of the board over a period of six months, if
2-11 more than one meeting is held during that period, constitutes
2-12 persistent failure to perform the board member's duties as a member
2-13 of the board.
2-14 (h) In [Notwithstanding any other provision of this
2-15 constitution, in] managing the assets of the permanent school fund,
2-16 the Permanent School Fund Investment Board [State Board of
2-17 Education] may acquire, exchange, sell, supervise, manage, or
2-18 retain, through procedures and subject to restrictions it
2-19 establishes and in amounts it considers appropriate, any kind of
2-20 investment, including investments in the Texas growth fund created
2-21 by Article XVI, Section 70, of this constitution, that persons of
2-22 ordinary prudence, discretion, and intelligence, exercising the
2-23 judgment and care under the circumstances then prevailing, acquire
2-24 or retain for their own account in the management of their affairs,
2-25 not in regard to speculation but in regard to the permanent
2-26 disposition of their funds, considering the probable income as well
2-27 as the probable safety of their capital.
2-28 SECTION 3. This proposed constitutional amendment shall be
2-29 submitted to the voters at an election to be held November 6, 2001.
2-30 The ballot shall be printed to permit voting for or against the
2-31 proposition: "The constitutional amendment providing for the
2-32 transfer of authority to invest and manage the permanent school
2-33 fund from the State Board of Education to the Permanent School Fund
2-34 Investment Board."
2-35 * * * * *