Texas Education Code - Section 43.006. Investment Management
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§ 43.006. INVESTMENT MANAGEMENT. (a) The State Board of
Education may delegate investment authority and contract for the
investment of the permanent school fund to the same extent as the
governing board of an institution of higher education with respect
to an institutional fund under Chapter 163, Property Code.
(b) The board may enter into a contract with a nonprofit
corporation for the corporation to invest funds under the control
and management of the board, including the permanent school fund,
as designated by the board. The corporation may not engage in any
business other than investing funds designated by the board under
the contract.
(c) The board must approve the:
(1) articles of incorporation and bylaws of the
corporation and any amendment to the articles of incorporation or
bylaws;
(2) investment policies of the corporation, including
changes to those policies;
(3) audit and ethics committee of the corporation;
and
(4) code of ethics of the corporation.
(d) The board of directors of the corporation must be
members of the State Board of Education.
(e) If an investment contract entered into under Subsection
(b) includes the permanent school fund within the scope of funds
under the control and management of the State Board of Education to
be invested by the corporation, the board shall provide for an
annual financial audit of the permanent school fund. Subject to the
legislative audit committee's approval of including the audit in
the audit plan under Section 321.013(c), Government Code, the audit
shall be performed by the state auditor.
(f) The corporation shall file quarterly reports with the
State Board of Education concerning matters required by the board.
(g) The corporation is subject to the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes).
(h) The corporation may not enter into an agreement or
transaction with a:
(1) director, officer, or employee of the corporation
acting in other than an official capacity on behalf of the
corporation;
(2) business entity in which a director, officer, or
employee of the corporation has an interest;
(3) former director, officer, or employee of the
corporation on or before the second anniversary of the date the
person ceased to be a director, officer, or employee of the
corporation; or
(4) business entity in which a former director,
officer, or employee of the corporation has an interest on or before
the second anniversary of the date the person ceased to be a
director, officer, or employee of the corporation.
(i) An agreement or transaction entered into in violation of
Subsection (h) is void.
(j) For purposes of this section, a person has an interest
in a business entity if:
(1) the person owns five percent or more of the voting
stock or shares of the business entity;
(2) the person owns five percent or more of the fair
market value of the business entity; or
(3) money received by the person from the business
entity exceeds five percent of the person's gross income for the
preceding calendar year.
(k) In this section:
(1) "Governing board" and "institutional fund" have
the meanings assigned by Chapter 163, Property Code.
(2) "Institution of higher education" has the meaning
assigned by Section 61.003.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995.
Amended by Acts 2003, 78th Leg., ch. 785, § 58, eff. Sept. 1,
2003.
Section: 43.003 43.0031 43.0032 43.0033 43.0034 43.004 43.005 43.006 43.007 43.009 43.010 43.011 43.012 43.013 43.014
Last modified: August 10, 2007
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