78R3759 SMJ-D

By:  Davis of Dallas                                              H.B. No. 3476



A BILL TO BE ENTITLED

AN ACT

relating to the authority of the boards of trustees of certain state 
retirement systems to contract with professional investment 
managers.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 815.301, Government Code, is amended by 
amending Subsections (b) and (c) and adding Subsection (g) to read 
as follows:
	(b)  The board of trustees may delegate its authority under 
Subsection (a) to the executive director or an investment manager 
with whom the board contracts under Subsection (c).  The board of 
trustees, [or] the executive director, or the investment manager
may, under the standard of care provided by Section 815.307, invest 
and reinvest any of the retirement system's assets and may 
commingle assets of the trust fund and the law enforcement and 
custodial officer supplemental retirement fund with the assets of 
the Judicial Retirement System of Texas Plan Two for investment 
purposes, as long as proportionate ownership records are maintained 
and credited.  Investments may include home office facilities, 
including land, equipment, and office building, used in 
administering the retirement system.
	(c)  The board of trustees may contract with private 
professional investment managers to invest on behalf of the board 
or assist the board in investing the assets of the retirement 
system.
	(g)  In a contract entered into under Subsection (c) for 
investing system assets on behalf of the board of trustees, the 
board shall specify any policies, requirements, or restrictions, 
including criteria for determining the quality of investments and 
for the use of standard rating services, that the board adopts for 
investments of the system.  The board at any time may, and at 
frequent intervals shall, monitor the investments made by the 
investment manager and may contract for professional evaluation 
services to fulfill this requirement.
	SECTION 2.  Section 825.301, Government Code, is amended by 
amending Subsection (b) and adding Subsection (f) to read as 
follows:
	(b)  The board of trustees may contract with private 
professional investment managers to invest on behalf of the board 
or assist the board in investing the assets of the retirement 
system.
	(f)  In a contract entered into under Subsection (b) for 
investing system assets on behalf of the board of trustees, the 
board shall specify any policies, requirements, or restrictions, 
including criteria for determining the quality of investments and 
for the use of standard rating services, that the board adopts for 
investments of the system.  The board at any time may, and at 
frequent intervals shall, monitor the investments made by the 
investment manager and may contract for professional evaluation 
services to fulfill this requirement.
	SECTION 3.  Section 840.301, Government Code, is amended by 
adding Subsection (d) to read as follows:
	(d)  The board of trustees may contract with private 
professional investment managers for the purposes and in the manner 
provided by Section 815.301 for the investment of assets under 
Chapter 815.
	SECTION 4.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.