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


Office of House Bill AnalysisC.S.H.J.R. 74
By: Keel
Public Education
4/23/2001
Committee Report (Substituted)



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, C.S.H.J.R. 74 requires the submission to the
voters of a constitutional amendment providing for the transfer of
authority to invest and manage the 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

C.S.H.J.R. 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 permanent
provisions for the appointment of nine board members who serve staggered
terms of six years as well as provisions relating to the initial
appointments to the board.  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 of prudent
investors. 

FOR ELECTION

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

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.J.R. 74 differs from the original resolution by providing that
members of the Permanent School Fund Investment Board (board) serve
staggered terms of six years, with the term of one member appointed by each
appointing authority expiring February 1 of each odd-numbered year.  The
substitute specifies that the board must be appointed in the manner
provided by law, which may provide that provisions regarding the filling of
vacancies in state or district offices do not apply.  The substitute sets
forth provisions for the initial appointments of board members.