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.