By: West S.J.R. No. 51
SENATE JOINT RESOLUTION
proposing a constitutional amendment establishing the Texas power
source fund.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 16, Texas Constitution, is amended by
adding Section 73 to read as follows:
Sec. 73. (a) In this section:
(1) "Board of trustees" means the board of trustees of
the Texas power source fund.
(2) "Fund" means the Texas power source fund.
(b) The Texas power source fund is created as a trust fund
outside the state treasury. Except as otherwise provided by this
section, the fund is subject to the general laws of this state
governing private sector trusts. Only individuals who are
residents of this state and political subdivisions of this state
may invest in the fund.
(c) The comptroller shall invest in the fund on the behalf
of this state one dollar from the general revenue fund to match each
dollar invested by other investors in the fund after the total
amount invested by other investors reaches $500 million. The
comptroller may not invest under this subsection more than $500
million.
(d) In the year of investment, an individual investor in the
fund is entitled to an incentive in the amount of non-school ad
valorem taxes owed by the investor for that tax year, but not to
exceed the lesser of 20 percent of the amount invested in the fund
during that year, the total amount of non-school ad valorem taxes
owed by the investor for that tax year, or $3,000. The board of
trustees may give the investor the incentive amount in the form of a
cash payment from the fund or as additional shares in the fund, as
the investor chooses.
(e) The fund is managed by a board of trustees consisting of
nine members appointed by the governor.
(f) Each member of the board must have demonstrated
substantial investment expertise. Each member serves for a
six-year term expiring February 1 of an odd-numbered year.
(g) The governor shall designate a presiding officer from
among the members of the board of trustees who serves a term of two
years expiring February 1 of each odd-numbered year. A member may
serve more than one term as presiding officer.
(h) The board of trustees shall manage the fund, and may:
(1) employ and retain staff, including a chief
executive officer;
(2) take any action necessary for the creation,
administration, and protection of the fund;
(3) enter into investment contracts with investors;
(4) adopt rules regarding the operation of the fund;
(5) acquire, hold, and dispose of assets;
(6) execute contracts;
(7) pay expenses of the fund based on an assessment on
investor contributions;
(8) provide for different classes of voting and
non-voting shares; and
(9) alternatively, or in combination with its own
staff, contract for the management of investments under this
section with a private investment management firm or with an
investing fund or system electing a member of the board of trustees.
(i) The board of trustees shall appoint regional investment
boards. Each part of the state must be in the territory of one
regional investment board. Each regional investment board shall
evaluate potential investment opportunities in its region and make
investment decisions in its region. The board of trustees by a vote
of six members may override an investment decision of a regional
investment board.
(j) The fund may invest only in Texas businesses. The fund
may invest in publicly traded or closely held businesses.
(k) In making investments, the board of trustees and
regional investment boards shall exercise the judgment and care
under the circumstances then prevailing that persons of ordinary
prudence, discretion, and intelligence exercise in the management
of their own affairs, not in regard to speculation but in regard to
the permanent disposition of their funds, considering the probable
income as well as the probable safety of the capital of the fund.
(l) The board of trustees shall establish and operate the
fund to the extent practicable under the generally accepted
business procedures relating to a mutual fund and shall value the
investments for determining the purchase or sales price of
participating shares of investors in the fund consistent with
investment contracts. Evidences of participation in the fund shall
be held by the comptroller of public accounts in keeping with the
custodial responsibilities of that office.
(m) On a quarterly basis, the amount of income realized on
investments under this section shall be distributed to each of the
investors in the fund in proportion to the number of participating
shares of each investor. Capital appreciation becomes a part of the
corpus of the fund and shall be distributed in accordance with the
investment contracts.
(n) The board of trustees shall make arrangements to begin
liquidation, phase out investments, and return the principal and
capital gains on investments to the investors in the fund not later
than the 10th anniversary of the date of the adoption of this
section or the date of extension of the fund, as applicable. Except
under unusual circumstances where it may be necessary to protect
investments previously made, further investments may not be made in
or by the fund after the 10th anniversary of the date of the
adoption of this section or the date of extension of the fund, as
applicable.
(o) At the regular legislative session next preceding the
10th anniversary of the date of the adoption of this section or the
date of extension of the fund, as applicable, the legislature, by
two-thirds vote of each house, may extend the duration of the fund
for 10 years.
(p) The board of trustees may purchase liability insurance
for the coverage of the trustees, employees, and agents of the
board.
(q) The legislature shall provide by law for the periodic
review of the board of trustees in the same manner and at the same
intervals as it provides for review of other state agencies, except
that the legislature shall provide that the board of trustees is not
subject to abolishment as part of the review process.
(r) The board of directors shall make an annual report to
the legislature regarding the finances and operation of the fund.
(s) The legislature by general law may provide for the
operation of the fund and may authorize an executive officer or
agency to adopt rules governing the operation of the fund.
(t) This section is self-executing and takes effect on its
adoption by the voters. All state officials named in this section
and the comptroller of public accounts shall take all necessary
actions for the implementation of this section. The legislature
shall provide by law for full disclosure of all details concerning
investments authorized by this section.
SECTION 2. This proposed constitutional amendment shall be
submitted to the voters at an election to be held November 3, 2009.
The ballot shall be printed to permit voting for or against the
proposition: "The constitutional amendment establishing the Texas
power source fund."