86R10359 JXC-D

By: Watson, et al. S.B. No. 608

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the School Land Board.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 32.003, Natural Resources Code, is amended to read as follows:

Sec. 32.003. APPLICATION OF SUNSET ACT. The School Land Board is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished September 1, 2031 [2019].

SECTION 2. Section 32.012, Natural Resources Code, is amended to read as follows:

Sec. 32.012. MEMBERS OF THE BOARD. (a) The board is composed of:

(1) the commissioner;

(2) two citizens [a citizen] of the state appointed by the governor with the advice and consent of the senate; and

(3) two citizens [a citizen] of the state appointed by the attorney general with the advice and consent of the senate.

(a-1) One citizen appointed by the governor and one citizen appointed by the attorney general must be selected from lists of nominees submitted by the State Board of Education. The State Board of Education shall submit to the governor or the attorney general, as applicable, a list of six nominees for a vacant position described by this subsection. The governor or attorney general, as applicable, may request that the State Board of Education submit a second list of six nominees if the governor or attorney general does not choose to appoint a nominee from the first list.

(b) The authority of the attorney general to appoint [one of the] members of the board, including the authority to make appointments during the recess of the senate, is the same as the authority of the governor to fill vacancies in state offices under the Texas Constitution.

(c) Each appointment made by the governor and the attorney general shall be made in accordance with and subject to the provisions of the Texas Constitution authorizing the filling of vacancies in state offices by appointment of the governor.

SECTION 3. Subchapter B, Chapter 32, Natural Resources Code, is amended by adding Section 32.0161 to read as follows:

Sec. 32.0161. ANNUAL JOINT MEETING. The board and the State Board of Education shall hold an annual joint public meeting to discuss the allocation of the assets of the permanent school fund and the investment of the money in the fund.

SECTION 4. Subchapter B, Chapter 32, Natural Resources Code, is amended by adding Section 32.0191 to read as follows:

Sec. 32.0191. SEPARATION OF RESPONSIBILITIES. The board shall develop and implement policies that clearly separate the policymaking responsibilities of the board and the management responsibilities of the commissioner and the staff of the land office.

SECTION 5. Subchapter B, Chapter 32, Natural Resources Code, is amended by adding Section 32.027 to read as follows:

Sec. 32.027. MEMBER TRAINING. (a) A person who is appointed to and qualifies for office as a member of the board may not vote, deliberate, or be counted as a member in attendance at a meeting of the board until the person completes a training program that complies with this section.

(b) The training program must provide the person with information regarding:

(1) the law governing board operations;

(2) the programs, functions, rules, and budget of the board;

(3) the board's investment programs and strategies;

(4) the permanent school fund, including a comprehensive overview of the law governing the fund;

(5) the scope of and limitations on the rulemaking authority of the board;

(6) the results of the most recent formal audit of the board;

(7) the requirements of:

(A) laws relating to open meetings, public information, administrative procedure, and disclosure of conflicts of interest; and

(B) other laws applicable to members of a state policymaking body in performing their duties; and

(8) any applicable ethics policies adopted by the board or the Texas Ethics Commission.

(c) A person appointed to the board is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

(d) The commissioner shall create a training manual that includes the information required by Subsection (b).

(e) The commissioner shall distribute a copy of the training manual annually to each appointed member of the board. On receipt of the training manual, each appointed member of the board shall sign and submit to the commissioner a statement acknowledging receipt of the training manual.

SECTION 6. Subchapter B, Chapter 32, Natural Resources Code, is amended by adding Section 32.028 to read as follows:

Sec. 32.028. COMPLAINTS. (a) The board shall maintain a system to promptly and efficiently act on complaints filed with the board. The board shall maintain information about parties to the complaint, the subject matter of the complaint, a summary of the results of the review or investigation of the complaint, and its disposition.

(b) The board shall make information available describing its procedures for complaint investigation and resolution.

(c) The board shall periodically notify the complaint parties of the status of the complaint until final disposition.

SECTION 7. Sections 51.402(a) and (c), Natural Resources Code, are amended to read as follows:

(a) The board may use funds [the money] designated under Section 51.401 for any of the following purposes:

(1) to add to a tract of public school land to form a tract of sufficient size to be manageable;

(2) to add contiguous land to public school land;

(3) to acquire, as public school land, interests in real property for biological, commercial, geological, cultural, or recreational purposes;

(4) to acquire mineral and royalty interests for the use and benefit of the permanent school fund;

(5) to protect, maintain, or enhance the value of public school land;

(6) to acquire interests in real estate;

(7) to pay reasonable fees for professional services related to a permanent school fund investment; or

(8) to acquire, sell, lease, trade, improve, maintain, protect, or use land, mineral and royalty interests, or real estate investments, an investment or interest in public infrastructure, or other interests, at such prices and under such terms and conditions the board determines to be in the best interest of the permanent school fund.

(c) Notwithstanding Subsection (a) of this section, on January 1 of each even-numbered year, the sum of any funds designated under Section 51.401 not being used for a purpose listed in Subsection (a) of this section and the market value of the investments in real estate made under this section [on January 1 of each even-numbered year] may not exceed an amount that is equal to 15 percent of the sum of:

(1) the funds held by the board and the State Board of Education as part of the permanent school fund; and

(2) the market value of the assets held by the board and the State Board of Education as part of the permanent school fund [on that date].

SECTION 8. Sections 51.4021(a) and (b), Natural Resources Code, are amended to read as follows:

(a) The board may appoint investment managers, consultants, or advisors to invest or assist the board in investing funds [the money] designated under Section 51.401 by contracting for professional investment management or investment advisory services with one or more organizations that are in the business of managing or advising on the management of real estate investments.

(b) To be eligible for appointment under this section, an investment manager, consultant, or advisor shall agree to abide by the policies, requirements, or restrictions, including ethical standards and disclosure policies and criteria for determining the quality of investments and for the use of standard rating services, that the board adopts for real estate investments of the permanent school fund. Funds [Money] designated under Section 51.401 may not be invested in a real estate investment trust, as defined by Section 200.001, Business Organizations Code.

SECTION 9. Section 51.412, Natural Resources Code, is amended to read as follows:

Sec. 51.412. REPORTS TO LEGISLATURE. (a) Not later than September 1 of each even-numbered year, the board shall submit to the legislature a report that, specifically and in detail, assesses the direct and indirect economic impact, as anticipated by the board, of the investment of funds designated under Section 51.401 for deposit in the real estate special fund account of the permanent school fund.

(b) The board may not disclose information under this section that is confidential under applicable state or federal law.

(c) The report must include the following information:

(1) the total amount of the funds [money] designated by Section 51.401 for deposit in the real estate special fund account of the permanent school fund that the board intends to invest;

(2) the rate of return the board expects to attain on the investment;

(3) the amount of the funds [money] the board expects to distribute to the available school fund or the State Board of Education for investment in the permanent school fund after making the investments;

(4) the distribution of the board's investments by county;

(5) the effect of the board's investments on the level of employment, personal income, and capital investment in the state; and

(6) any other information the board considers necessary to include in the report.

[(b) Not later than January 1 of each odd-numbered year, the board shall submit to the legislature a report that assesses the return and economic impact of the investments reported to the legislature before the preceding regular legislative session.]

SECTION 10. Section 51.413(b), Natural Resources Code, is amended to read as follows:

(b) The board shall adopt rules to establish the procedure that will be used by the board to determine the date a transfer will be made and the amount of the funds [money] that will be transferred to the available school fund or to the State Board of Education for investment in the permanent school fund from the real estate special fund account as provided by Subsection (a).

SECTION 11. Section 51.4131, Natural Resources Code, is amended to read as follows:

Sec. 51.4131. REPORT ON ANTICIPATED TRANSFER OF FUNDS. Not later than September 1 of each even-numbered year, the board shall submit to the legislature, comptroller, State Board of Education, and Legislative Budget Board a report that, specifically and in detail, states the date a transfer will be made and the amount of the funds [money] the board will transfer during the subsequent state fiscal biennium from the real estate special fund account of the permanent school fund established under Section 51.401 to the available school fund or the State Board of Education for investment in the permanent school fund.

SECTION 12. Not later than September 1, 2020, the governor and the attorney general shall appoint members to the School Land Board in accordance with Section 32.012(a-1), Natural Resources Code, as added by this Act.

SECTION 13. Section 32.027, Natural Resources Code, as added by this Act, applies to a member of the School Land Board appointed before, on, or after the effective date of this Act. A member of the School Land Board may not vote, deliberate, or be counted as a member in attendance at a meeting of the board held on or after December 1, 2019, until the member completes the training.

SECTION 14. This Act takes effect September 1, 2019.