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RULE §18.1Purpose and Definitions

(a) Purpose. The comptroller is required by Government Code, §403.1041, to administer the Tobacco Settlement Permanent Trust Account (trust account) and manage the assets of the trust account with the advice of and in consultation with the Tobacco Settlement Permanent Trust Account Investment Advisory Committee (investment advisory committee). The comptroller is also required to adopt rules necessary to implement the comptroller's duties under Government Code, §403.1041, including rules distinguishing the net earnings of the trust account that may be distributed from earnings used for investment expenses and from the money and assets that are the corpus of the trust account. A rule adopted by the comptroller under this subsection must be submitted to the investment advisory committee and may not become effective before the investment advisory committee approves the rule. If the investment advisory committee disapproves a proposed rule, the investment advisory committee is required to provide the comptroller the specific reasons that the rule was disapproved.

(b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Actual distribution amount--The amount determined pursuant to §18.2 of this title (relating to Trust Account Distributions).

  (2) Adjusted current earnings--Current earnings less investment expenses.

  (3) Average market value of the trust account--Calculated using the most recent twenty (20) calendar quarter end market values.

  (4) Corpus--The cumulative value of all contributions to the trust account.

  (5) Current earnings--The sum of interest and dividend income, income from real estate and private equity investments, and total returns produced by investments designated by the governing investment policy as substitutes for fixed income earned by the trust account during the calendar year.

  (6) Investment advisory committee--The Tobacco Settlement Permanent Trust Account Investment Advisory Committee as defined by Government Code, §403.1041.

  (7) Investment expenses--Investment related expenses, not to exceed amounts established by the Texas Legislature, including, but not limited to, custodial fees, and fees for investment management, administration, investment consultants, or auditors.

  (8) Investment Policy Statement--The Investment Policy Statement - Texas Endowment Funds adopted by the Comptroller of Public Accounts for endowments managed by the Texas Treasury Safekeeping Trust Company.

  (9) Net earnings--All appreciation and income generated by the trust account.

  (10) Political subdivision--The meaning assigned by Government Code, §403.1041.

  (11) Trust account--The Tobacco Settlement Permanent Trust Account as defined by Government Code, §403.1041.

Source Note: The provisions of this §18.1 adopted to be effective November 16, 2000, 25 TexReg 11292; amended to be effective March 27, 2003, 28 TexReg 2618; amended to be effective March 6, 2006, 31 TexReg 1454; amended to be effective December 21, 2016, 41 TexReg 9939

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