The opinion
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THE ATTORNEY GENERAL
OF %-EXAS
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\ 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