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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 opinionyou 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 Texa8may be followedby
our system and bow much discxetionwe 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.
OpinioaNo. WW-548, dated January 16, 1959, concemw iare&- rent of the retirement **funds** of the EmployeesRetirement 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 investmentof funda of the TeacherRetirement System in such securities is authorisedby 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 constitutionalprovisions are practically identical,as are the applicableportions **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 amendedpolicies l . . . as providing safeguardsand standardsof eligibility for investments which the Board of Regents deem proper investment8 **for** the PermanentUniversity Fund

. . .,I such actionbeing reflectedby the following emcerpt from its ainutear

"Afterpresentationby Vice-Chancellor Uolley of the,amended **and** edited policies governing the investmentprogram for the PermanentUniversity Pund of The Universityof Texas, a motion was **aade** by Regent Tbompocua and secondedby 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 PermanentUniversity Fund under the provision6 of Section lla, ArticleVII, Constitution of the State oi?

Texas,which amthoriaes investment of up to 56% of the Fund in corporate securities. The Board of Regentswith 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 'PolicieeGoverning PermanentWniveneity 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 "PoliciesQoverning PermanentWniversity Pund of The University of Texas InveatmentProgram,* so adopted,
on pages 11 to 15, both inclusive. the Board of Regent8has formally approvedby name more than one hundred thirty (139)corporation8whose corporatebonds, preferred **etocka** and common stocks are eligible for purchaseby the Permanent University Fund. Additionally, in paragraph IV B oa page 3, it is provided that corporatebonds issuedby corporations not on this approved list are approvedby the **Board** of Regents for purchase either on original offering **or** in theRonorable Leon Stone,Rage 3 (UU-921)

**secondary market**  provided such corporatebonds meet the etandarde and requirements there set **out.**
While thebest evidence is the actual investmeatof the ?ermanentUniversityFund (seeOn-548). we believe that thiai minute **order of**  October 22, lg60,by theRoard of Regents also constitutesclear and sufficient evidence aa 

### to what corporate securities the **Board** of Regents deems to be proper investments **for** the PermanentUniversity Bund, **and** that similar actions properly takenby that Roard in the futurewill also afford, under aiotiag law, sufficient evi**dence** thereof. Accordingly, funds **of** both the Bployees Retirement **and** Teacher Retirement Systemsmay properlybe invested in accordancewith the said minute order.

SumwARY
Attorney general's Opinion Ro. WW-548 applies to investmentof the funds of the TeacherRetirement System, and said fundsmay not be invested 1~ corporate stocks and bonds other than tkoae In which the PermanentUniversity Fund of The Rnivexsity of Texam is invested, or may be invested under tke staadards establishedby **the Board**  **of Regents.** 

Very trulyyours,

WILL WI~QR **Attorneir** General of Texan

Assistant - / EWR-SHonorable 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