Untitled Texas Attorney General Opinion

. I .- -, THE ATTORNEY GENERAL OF %-EXAS f ~za~‘“‘-A~i.“x’~~ “---~‘-..---. --’ “-.‘-‘.. 1 \ AUSTIN U.~XAS WILL WILSON Ax-rORNEY GENERAL December 8, 1960 Honorable Leon Stone Opinion Ro. m-971 Vice Chairman Board of Trustees Bet Whether Opinion of the The Teacher Retirement Attorney General &XI. System of Texas WV-548 also applies to State Office Building investment of the funds Auetin, Texas of the Teacher Retire- ment System of Teaa@. Dear Rx. Stoner In regueeting an opinion you ask whether Opinion Ho. UW-948, written to the mployeea Retirement System of Texas, applies to the Teacher Retirement System and Whether tlterules of tbe Board of Regents of The University of Texa8 may be followed by our system and bow much discxetion we have in following these policies: Opinion of the Attorney General Ho. WU-548, a copy -of which & attached, should be read aa a part of this opinion. Opinioa No. WW-548, dated January 16, 1959, concemw iare&- rent of the retirement funds of the Employees Retirement System in corporate stocks and bonds and ia based primarily upon the applicable language contained ia Section 62(a), an amended, of Article Xv1 of the Constitution of Texan, and in Section 71 of Article 6228a, V.C.S., as amended. The investment of funda of the Teacher Retirement System in such securities is authorised by Sectioa 48a, aa amended, of Article III of the Constitution of Texas, and by Section 13 of Article 2922-1, V.C.S., as amended, and since tbe applicable portions of each of the said constitutional provisions are practically identical, as are the applicable portions of the two 6tatutes, Opinion Ho. NW-548 would apply also to such investment of Teacher Betiremeat funda. Honorable Leon Stone, paga 2 (m-971 ) On October 22, 1960, the Board of Regents of The University of Texas adopted certain amended policies l . . . as pro- viding safeguards and standards of eligibility for invest- ments which the Board of Regents deem proper investment8 for the Permanent University Fund . . .,I such action being re- flected by the following emcerpt from its ainutear "After presentation by Vice-Chancellor Uolley of the,amended and edited poli- cies governing the investment program for the Permanent University Pund of The University of Texas, a motion was aade by Regent Tbompocuaand seconded by Regent Rardie to adopt the polioiea an amended and edited as providing safeguards and standards of eligibility for invest- ments which the Board of Regents deem proper investments for the Permanent Uni- versity Fund under the provision6 of Sec- tion lla, Article VII, Constitution of the State oi?Texas, which amthoriaes in- vestment of up to 56% of the Fund in corporate securities. The Board of Regents with eight member8 present unan'i- moualy adopted the policies ae amended and edited and directed tbe Secretary of the Board to spread the full copy of the 'Policiee Governing Permanent Wniveneity Pund of The University of Texan Invest- ment Program," aa amended and edited through October 22, 1960, on the perma- nent minutes of the Board of Regents." In the amended "Policies Qoverning Permanent Wniversity Pund of The University of Texas Inveatment Program,* so adopted, on pages 11 to 15, both inclusive. the Board of Regent8 has formally approved by name more than one hundred thirty (139) corporation8 whose corporate bonds, preferred etocka and common stocks are eligible for purchase by the Permanent University Fund. Additionally, in paragraph IV B oa page 3, it is provided that corporate bonds issued by corporations not on this approved list are approved by the Board of Regents for purchase either on original offering or in the Ronorable Leon Stone, Rage 3 (UU-921) secondary market provided such corporate bonds meet the etandarde and requirements there set out. While the best evidence is the actual investmeat of the ?ermanent University Fund (see On-548). we believe that thiaiminute order of October 22, lg60, by the Roard of Regents also constitutes clear and sufficient evidence aa to what corporate securities the Board of Regents deems to be proper investments for the Permanent University Bund, and that similar actions properly taken by that Roard in the future will also afford, under aiotiag law, sufficient evi- dence thereof. Accordingly, funds of both the Bployees Retirement and Teacher Retirement Systems may properly be invested in ac- cordance with the said minute order. SumwARY Attorney general's Opinion Ro. WW-548 applies to investment of the funds of the Teacher Retirement System, and said funds may not be invested 1~ corporate stocks and bonds other than tkoae In which the Permanent University Fund of The Rnivexsity of Texam is invested, or may be invested under tke staadards es- tablished by the Board of Regents. Very truly yours, WILL WI~QR Attorneir General of Texan Assistant - / EWR-S Honorable Leon Stone, page 4 (W-971 ) OPIlfIOBl ColllrlITTrn W. V. Geppert, Chairman Marietta HcOregor Payne W. Ray Scraggs IUner IleVey Tom UcFarling BEVIBWISDFOR !tT+IEATTQBlDIJlC)IMI= By: Leonard Passnore