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."
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