HBA-MSH, JEK H.J.R. 74 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.J.R. 74
By: Keel
Public Education
3/12/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, the investment and management of the permanent school
fund (fund) is a responsibility of the State Board of Education.  The
members of the board of education are not required to possess any
investment expertise, which makes it more difficult to manage the fund with
prudence and avoid conflicts of interest regarding advice from investment
consultants.  As proposed, House Joint Resolution 74 requires the
submission to the voters of a constitutional amendment providing for the
transfer of authority to invest and manage the permanent school fund from
the State Board of Education to the Permanent School Fund Investment Board,
and modifying the standards used to determine appropriate investment and
management decisions. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this resolution
does not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Joint Resolution 74 amends the Texas Constitution to require the
Permanent School Fund Investment Board (board) to invest and manage the
assets of the permanent school fund (fund).  The resolution sets forth
provisions relating to the appointment of nine board members.  The
resolution provides that a person must have appropriate expertise in
investing institutional funds to be eligible for appointment to the board.
The resolution authorizes the board to manage investments with the
reasonable care, skill, and caution that prudent investors would use. 

FOR ELECTION

This proposed constitutional amendment shall be submitted to the voters at
an election to be held November 6, 2001.