By: Otto (Senate Sponsor - Duncan) H.B. No. 1061
(In the Senate - Received from the House April 27, 2011;
April 29, 2011, read first time and referred to Committee on State
Affairs; May 6, 2011, reported favorably by the following vote:
Yeas 8, Nays 1; May 6, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the expiration of certain investment authority of the
Teacher Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 825.301(a-1) and (a-2), Government
Code, are amended to read as follows:
(a-1) This subsection expires September 1, 2019 [2012], and
applies to the investment and reinvestment of assets of the
retirement system only if the investment or reinvestment is made
before September 1, 2019 [2012]. In addition to any investment or
reinvestment authorized by Subsection (a), the board of trustees
may buy and sell the following, only to efficiently manage and
reduce the risk of the overall investment portfolio:
(1) futures contracts;
(2) options;
(3) options on futures contracts;
(4) forward contracts;
(5) swap contracts, including swap contracts with
embedded options;
(6) any instrument or contract intended to manage
transaction or currency exchange risk in purchasing, selling, or
holding investments; and
(7) any other instrument commonly used by
institutional investors to manage institutional investment
portfolios.
(a-2) The board of trustees may delegate investment
authority and contract with one or more private professional
investment managers for investment and management of not more than
30 percent of the total assets held in trust by the retirement
system. In a contract made under this subsection, the board of
trustees shall specify any applicable policies, requirements, or
restrictions, including criteria for determining the quality of
investments or the use of standard rating services, that the board
of trustees adopts for investments of the system. The board of
trustees may not contract under this subsection for investment and
management services to be performed on or after September 1, 2019
[2012].
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.
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