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  H.B. No. 1061
  relating to certain investment authority of the Teacher Retirement
  System of Texas.
         SECTION 1.  Sections 825.301(a-1) and (a-2), Government
  Code, are amended to read as follows:
         (a-1)  This subsection expires September 1, 2019 [2012], and
  applies to the investment and reinvestment of assets of the
  retirement system only if the investment or reinvestment is made
  before September 1, 2019 [2012].  In addition to any investment or
  reinvestment authorized by Subsection (a), the board of trustees
  may buy and sell the following, only to efficiently manage and
  reduce the risk of the overall investment portfolio:
               (1)  futures contracts;
               (2)  options;
               (3)  options on futures contracts;
               (4)  forward contracts;
               (5)  swap contracts, including swap contracts with
  embedded options;
               (6)  any instrument or contract intended to manage
  transaction or currency exchange risk in purchasing, selling, or
  holding investments; and
               (7)  any other instrument commonly used by
  institutional investors to manage institutional investment
         (a-2)  The board of trustees may delegate investment
  authority and contract with one or more private professional
  investment managers for investment and management of not more than
  30 percent of the total assets held in trust by the retirement
  system. In a contract made under this subsection, the board of
  trustees shall specify any applicable policies, requirements, or
  restrictions, including criteria for determining the quality of
  investments or the use of standard rating services, that the board
  of trustees adopts for investments of the system.  The board of
  trustees may not contract under this subsection for investment and
  management services to be performed on or after September 1, 2019 
         SECTION 2.  Section 825.3012, Government Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  Notwithstanding Subsection (b) of this section and
  any provision of Section 825.301, before September 1, 2019, not
  more than 10 percent of the value of the total investment portfolio
  of the retirement system may be invested in hedge funds. This
  subsection expires September 1, 2019.
         SECTION 3.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2011.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I certify that H.B. No. 1061 was passed by the House on April
  26, 2011, by the following vote:  Yeas 147, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1061 on May 16, 2011, by the following vote:  Yeas 141, Nays 0,
  2 present, not voting.
  Chief Clerk of the House   
         I certify that H.B. No. 1061 was passed by the Senate, with
  amendments, on May 10, 2011, by the following vote:  Yeas 30, Nays
  Secretary of the Senate   
  APPROVED: __________________