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SENATE JOINT RESOLUTION
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proposing a constitutional amendment establishing the Texas power |
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source fund. |
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BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Article 16, Texas Constitution, is amended by |
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adding Section 73 to read as follows: |
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Sec. 73. (a) In this section: |
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(1) "Board of trustees" means the board of trustees of |
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the Texas power source fund. |
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(2) "Fund" means the Texas power source fund. |
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(b) The Texas power source fund is created as a trust fund |
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outside the state treasury. Except as otherwise provided by this |
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section, the fund is subject to the general laws of this state |
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governing private sector trusts. Only individuals who are |
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residents of this state and political subdivisions of this state |
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may invest in the fund. |
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(c) The comptroller shall invest in the fund on the behalf |
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of this state one dollar from the general revenue fund to match each |
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dollar invested by other investors in the fund after the total |
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amount invested by other investors reaches $500 million. The |
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comptroller may not invest under this subsection more than $500 |
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million. |
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(d) In the year of investment, an individual investor in the |
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fund is entitled to an incentive in the amount of non-school ad |
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valorem taxes owed by the investor for that tax year, but not to |
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exceed the lesser of 20 percent of the amount invested in the fund |
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during that year, the total amount of non-school ad valorem taxes |
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owed by the investor for that tax year, or $3,000. The board of |
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trustees may give the investor the incentive amount in the form of a |
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cash payment from the fund or as additional shares in the fund, as |
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the investor chooses. |
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(e) The fund is managed by a board of trustees consisting of |
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nine members appointed by the governor. |
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(f) Each member of the board must have demonstrated |
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substantial investment expertise. Each member serves for a |
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six-year term expiring February 1 of an odd-numbered year. |
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(g) The governor shall designate a presiding officer from |
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among the members of the board of trustees who serves a term of two |
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years expiring February 1 of each odd-numbered year. A member may |
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serve more than one term as presiding officer. |
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(h) The board of trustees shall manage the fund, and may: |
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(1) employ and retain staff, including a chief |
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executive officer; |
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(2) take any action necessary for the creation, |
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administration, and protection of the fund; |
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(3) enter into investment contracts with investors; |
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(4) adopt rules regarding the operation of the fund; |
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(5) acquire, hold, and dispose of assets; |
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(6) execute contracts; |
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(7) pay expenses of the fund based on an assessment on |
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investor contributions; |
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(8) provide for different classes of voting and |
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non-voting shares; and |
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(9) alternatively, or in combination with its own |
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staff, contract for the management of investments under this |
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section with a private investment management firm or with an |
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investing fund or system electing a member of the board of trustees. |
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(i) The board of trustees shall appoint regional investment |
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boards. Each part of the state must be in the territory of one |
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regional investment board. Each regional investment board shall |
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evaluate potential investment opportunities in its region and make |
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investment decisions in its region. The board of trustees by a vote |
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of six members may override an investment decision of a regional |
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investment board. |
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(j) The fund may invest only in Texas businesses. The fund |
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may invest in publicly traded or closely held businesses. |
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(k) In making investments, the board of trustees and |
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regional investment boards shall exercise the judgment and care |
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under the circumstances then prevailing that persons of ordinary |
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prudence, discretion, and intelligence exercise in the management |
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of their own affairs, not in regard to speculation but in regard to |
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the permanent disposition of their funds, considering the probable |
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income as well as the probable safety of the capital of the fund. |
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(l) The board of trustees shall establish and operate the |
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fund to the extent practicable under the generally accepted |
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business procedures relating to a mutual fund and shall value the |
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investments for determining the purchase or sales price of |
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participating shares of investors in the fund consistent with |
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investment contracts. Evidences of participation in the fund shall |
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be held by the comptroller of public accounts in keeping with the |
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custodial responsibilities of that office. |
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(m) On a quarterly basis, the amount of income realized on |
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investments under this section shall be distributed to each of the |
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investors in the fund in proportion to the number of participating |
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shares of each investor. Capital appreciation becomes a part of the |
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corpus of the fund and shall be distributed in accordance with the |
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investment contracts. |
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(n) The board of trustees shall make arrangements to begin |
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liquidation, phase out investments, and return the principal and |
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capital gains on investments to the investors in the fund not later |
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than the 10th anniversary of the date of the adoption of this |
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section or the date of extension of the fund, as applicable. Except |
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under unusual circumstances where it may be necessary to protect |
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investments previously made, further investments may not be made in |
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or by the fund after the 10th anniversary of the date of the |
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adoption of this section or the date of extension of the fund, as |
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applicable. |
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(o) At the regular legislative session next preceding the |
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10th anniversary of the date of the adoption of this section or the |
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date of extension of the fund, as applicable, the legislature, by |
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two-thirds vote of each house, may extend the duration of the fund |
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for 10 years. |
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(p) The board of trustees may purchase liability insurance |
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for the coverage of the trustees, employees, and agents of the |
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board. |
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(q) The legislature shall provide by law for the periodic |
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review of the board of trustees in the same manner and at the same |
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intervals as it provides for review of other state agencies, except |
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that the legislature shall provide that the board of trustees is not |
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subject to abolishment as part of the review process. |
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(r) The board of directors shall make an annual report to |
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the legislature regarding the finances and operation of the fund. |
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(s) The legislature by general law may provide for the |
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operation of the fund and may authorize an executive officer or |
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agency to adopt rules governing the operation of the fund. |
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(t) This section is self-executing and takes effect on its |
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adoption by the voters. All state officials named in this section |
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and the comptroller of public accounts shall take all necessary |
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actions for the implementation of this section. The legislature |
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shall provide by law for full disclosure of all details concerning |
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investments authorized by this section. |
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SECTION 2. This proposed constitutional amendment shall be |
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submitted to the voters at an election to be held November 3, 2009. |
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The ballot shall be printed to permit voting for or against the |
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proposition: "The constitutional amendment establishing the Texas |
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power source fund." |