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A BILL TO BE ENTITLED
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AN ACT
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relating to the investment authority of the Teacher Retirement |
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System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 825.301(a), (b), and (b-1), Government |
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Code, are amended to read as follows: |
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(a) The board of trustees shall invest and reinvest assets |
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of the retirement system without distinction as to their source in |
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accordance with Section 67, Article XVI, Texas Constitution. For |
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purposes of the investment authority of the board of trustees under |
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Section 67, Article XVI, Texas Constitution, "securities" includes |
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[means] any investment instrument within the meaning of the term as |
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defined by Section 4, The Securities Act (Article 581-4, Vernon's |
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Texas Civil Statutes), 15 U.S.C. Section 77b(a)(1), or 15 U.S.C. |
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Section 78c(a)(10), any derivative instrument, and any other |
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instrument commonly used by institutional investors to manage |
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institutional investment portfolios. An interest in a limited |
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partnership or investment contract is considered a security without |
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regard to the number of investors or the control, access to |
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information, or rights granted to or retained by the retirement |
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system. Any instrument or contract intended to manage transaction |
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or currency exchange risk in purchasing, selling, or holding |
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securities is considered to be a security. Investment decisions |
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are subject to the standard provided in the Texas Trust Code by |
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Section 117.004(b), Property Code. |
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(b) The [In addition to the board's authority under
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Subsection (a-2), the] board of trustees may delegate discretionary |
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investment authority to external investment managers to invest and |
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manage not more than 30 percent of the total assets held in trust by |
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the retirement system and may contract with external [private
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professional] investment [managers,] advisors[,] and consultants |
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to assist and advise the board and the staff of the retirement |
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system [in investing the assets of the retirement system]. |
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(b-1) By accepting a delegation of discretionary investment |
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authority [under Subsection (a-2)] or an engagement to assist or |
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advise the board or the staff of the retirement system under |
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Subsection (b), an external [a professional] investment manager, |
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advisor, or consultant submits to the jurisdiction of the courts of |
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this state in all proceedings arising from or related to |
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performance of the delegated authority or engagement. An action |
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relating to services rendered under this section shall be brought |
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only in a state district court sitting in Travis County, Texas. |
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Chapter 2260 does not apply to a contract under this section |
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[Subsection (a-2) or (b)]. This subsection does not waive any |
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immunity of the retirement system. |
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SECTION 2. Sections 825.301(a-1) and (a-2), Government |
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Code, are repealed. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2017. |