HBA-CBW H.B. 2523 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2523 By: Wilson State Affairs 3/23/2001 Introduced BACKGROUND AND PURPOSE Currently, there is no uniformity in the way in which the state or a state agency or official makes investments. Some of the investments have not been profitable, resulting in losses of millions of dollars. A centralized investment entity may be able to guide and direct such investments to provide more profitable results. House Bill 2523 establishes the State Investment Commission (commission) to centralize state investments, and to manage and direct the investments of all money held by an entity of the state. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the State Investment Commission in SECTION 1 (Section 2262.103, Government Code) and to all applicable state agencies or officials in SECTION 1 (Section 2262.151, Government Code) of this bill. ANALYSIS House Bill 2523 amends the Government Code to establish the State Investment Commission (commission) and provides that the commission has full authority to manage or direct the investment of all money held, in trust or otherwise, by the state or by a state agency or official. The bill establishes that the commission is composed of six commissioners appointed by the governor with the advice and consent of the senate to six-year staggered terms. The bill provides that the terms of two commissioners expire June 1 of each oddnumbered year and sets forth provisions regarding the eligibility requirements for appointment to the commission. The bill requires the governor to designate a commissioner as presiding officer of the commission and provides that other officers of the commission are selected from among the commissioners by agreement of the commissioners or by election. The bill requires the commission to employ a general manager to direct the daily affairs of the commission. The bill requires the commission to monitor, and authorizes it to audit, any account or fund of money held by the state or by an entity of the state. The bill requires the commission by rule to develop suggested and mandatory investment policies and guidelines for money subject to the jurisdiction of the commission and to review investment rules, policies, and guidelines of state agencies and officials. The bill authorizes the commission to order changes to a rule, policy, or guideline that does not meet the commission's approval. The bill sets forth provisions regarding the commission's direct and indirect control of investments held by a state entity. The bill sets forth provisions regarding the duties of state agencies and officials with respect to the policies and guidelines of the commission, and requires them to comply with an order of the commission regarding matters related to the investment of money. The bill authorizes a state agency or of trial to adopt rules, guidelines, or policies for matters not addressed by commission rules, provided that such rules, policies, and guideline are consistent with those of the commission. EFFECTIVE DATE This Act takes effect on the date the constitutional amendment proposed by the 77 Legislative, Regular Session, 2001, providing for the establishment of the State Investment Commission takes effect. If the proposed constitutional amendment is not approved by the voters, the Act has no effect.