S.B. No. 1665
AN ACT
relating to the 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), (b), and (b-1), Government
Code, are amended to read as follows:
(a) The board of trustees shall invest and reinvest assets
of the retirement system without distinction as to their source in
accordance with Section 67, Article XVI, Texas Constitution. For
purposes of the investment authority of the board of trustees under
Section 67, Article XVI, Texas Constitution, "securities" includes
[means] any investment instrument within the meaning of the term as
defined by Section 4, The Securities Act (Article 581-4, Vernon's
Texas Civil Statutes), 15 U.S.C. Section 77b(a)(1), or 15 U.S.C.
Section 78c(a)(10), any derivative instrument, and any other
instrument commonly used by institutional investors to manage
institutional investment portfolios. An interest in a limited
partnership or investment contract is considered a security without
regard to the number of investors or the control, access to
information, or rights granted to or retained by the retirement
system. Any instrument or contract intended to manage transaction
or currency exchange risk in purchasing, selling, or holding
securities is considered to be a security. Investment decisions
are subject to the standard provided in the Texas Trust Code by
Section 117.004(b), Property Code.
(b) The [In addition to the board's authority under
Subsection (a-2), the] board of trustees may delegate discretionary
investment authority to external investment managers to invest and
manage not more than 30 percent of the total assets held in trust by
the retirement system and may contract with external [private
professional] investment [managers,] advisors[,] and consultants
to assist and advise the board and the staff of the retirement
system [in investing the assets of the retirement system].
(b-1) By accepting a delegation of discretionary investment
authority [under Subsection (a-2)] or an engagement to assist or
advise the board or the staff of the retirement system under
Subsection (b), an external [a professional] investment manager,
advisor, or consultant submits to the jurisdiction of the courts of
this state in all proceedings arising from or related to
performance of the delegated authority or engagement. An action
relating to services rendered under this section shall be brought
only in a state district court sitting in Travis County, Texas.
Chapter 2260 does not apply to a contract under this section
[Subsection (a-2) or (b)]. This subsection does not waive any
immunity of the retirement system.
SECTION 2. Sections 825.301(a-1) and (a-2), Government
Code, are repealed.
SECTION 3. 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, 2017.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1665 passed the Senate on
April 19, 2017, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1665 passed the House on
May 24, 2017, by the following vote: Yeas 143, Nays 0, three
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor