By Ralph K.M. Haurwitz | AMERICAN-STATESMAN STAFF
Sunday, May 29, 2011
Texas A&M University System regents would get more say on how the multibillion-dollar Permanent University Fund and other higher education endowments are invested under a measure expected to be signed by Gov. Rick Perry.
House Bill 2825, written by Rep. John Otto, R-Dayton , would give the A&M System Board of Regents authority to name two people to the University of Texas Investment Management Co.'s board of directors. At least one of the appointees would have to possess a substantial background and expertise in investments.
Currently, the UT regents appoint all nine members of UTIMCO's board. Although state law specifies that "one or more" must be from a list submitted by the A&M regents, in actual practice the UT regents select one person from a list of two.
Unchanged would be a provision that requires the UT board to name three of its members and the UT chancellor to the UTIMCO board.
No one testified for or against the measure, and it was sent to the governor this week after the House and Senate approved it without objection.
By granting appointment power to the A&M regents, the bill navigates a fine legal and political line.
Under the Texas Constitution, the UT regents have full responsibility for overseeing the Permanent University Fund. The regents nevertheless sought and obtained legislation in 1996 authorizing UTIMCO, a private, nonprofit organization that answers to them and that is subject to state open records and open meetings laws.
Bruce Zimmerman, chief executive officer of UTIMCO, said Friday that he and his staff are comfortable with the measure and have the "utmost respect and confidence" in the UT and A&M regents.
A&M Chancellor Mike McKinney told the regents at a meeting in College Station on Thursday that he was pleased that A&M would get two appointees to UTIMCO's board. Under the state constitution, the A&M System gets one-third of the Permanent University Fund's proceeds and the UT System gets two-thirds.