. 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 

Vice Chairman 

Board of Trustees 

The Teacher Retirement 

System of Texas 

State Office Building 

Auetin, Texas 

Dear Rx. Stoner 

Opinion Ro. m-971 

Bet Whether Opinion of the 

Attorney General &XI. 

WV-548 also applies to 

investment of the funds 

of the Teacher Retirement System of Teaa@. 

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 tlte rules 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 providing safeguards and standards of eligibility for investments which the Board of Regents deem proper investment8 for 

the Permanent University Fund . . .,I such action being reflected by the following emcerpt from its ainutear 

"After presentation by Vice-Chancellor 

Uolley of the,amended and edited policies governing the investment program 

for the Permanent University Pund of 

The University of Texas, a motion was 

aade by Regent Tbompocua and seconded by 

Regent Rardie to adopt the polioiea an 

amended and edited as providing safeguards 

and standards of eligibility for investments which the Board of Regents deem 

proper investments for the Permanent University Fund under the provision6 of Section lla, Article VII, Constitution of 

the State oi? Texas, which amthoriaes investment of up to 56% of the Fund in 

corporate securities. The Board of 

Regents with eight member8 present unan'imoualy 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 Investment Program," aa amended and edited 

through October 22, 1960, on the permanent 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 

thiai minute 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 evidence thereof. 

Accordingly, funds of both the Bployees Retirement and 

Teacher Retirement Systems may properly be invested in accordance 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 established 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 

BEVIBWISD FOR !tT+IEATTQBlDIJlC)IMI= 

By: Leonard Passnore