AN ACT

 1-1     relating to the standards of conduct for former directors,

 1-2     officers, and employees of a nonprofit corporation under contract

 1-3     to invest the permanent university fund or certain other university

 1-4     funds; providing a penalty.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 66.08, Education Code, is amended by

 1-7     amending Subsection (i), adding new Subsections (l), (m), and (n),

 1-8     and redesignating existing Subsection (l) as Subsection (o) and

 1-9     amending that subsection to read as follows:

1-10           (i)  The corporation may not enter into an agreement or

1-11     transaction with a:

1-12                 (1)  director, officer, or employee of the corporation

1-13     acting in other than an official capacity on behalf of the

1-14     corporation; or

1-15                 (2)  business entity in which a director, officer, or

1-16     employee of the corporation has an interest[;]

1-17                 [(3)  former director, officer, or employee of the

1-18     corporation on or before the second anniversary of the date the

1-19     person ceased to be a director, officer, or employee of the

1-20     corporation; or]

1-21                 [(4)  business entity in which a former director,

1-22     officer, or employee of the corporation has an interest on or

1-23     before the second anniversary of the date the person ceased to be a

 2-1     director, officer, or employee of the corporation].

 2-2           (l)  A former director of the corporation may not make any

 2-3     communication to or appearance before a director, officer, or

 2-4     employee of the corporation before the second anniversary of the

 2-5     date an individual ceased to be a director of the corporation if

 2-6     the communication or appearance is made:

 2-7                 (1)  with the intent to influence; and

 2-8                 (2)  on behalf of any person in connection with any

 2-9     matter on which the person seeks action by the corporation.

2-10           (m)  A former officer or employee of the corporation may not

2-11     represent any person or receive compensation for services rendered

2-12     on behalf of any person regarding a particular matter in which the

2-13     former officer or employee participated during the period of

2-14     service or employment with the corporation, either through personal

2-15     involvement or because the particular matter was within the

2-16     officer's or employee's responsibility.

2-17           (n)  An individual who violates Subsection (l) or (m) commits

2-18     an offense.  An offense under this subsection is a Class A

2-19     misdemeanor.

2-20           (o) [(l)]  In this section:

2-21                 (1)  "Board" means the board of regents of The

2-22     University of Texas System.

2-23                 (2)  "Governing board," "institutional fund," and

2-24     "institution of higher education" have the meanings assigned by

2-25     Chapter 163, Property Code.

 3-1                 (3)  "Participated" means to have taken action as an

 3-2     officer or employee through decision, approval, disapproval,

 3-3     recommendation, giving advice, investigation, or similar action.

 3-4                 (4)  "Particular matter" means a specific

 3-5     investigation, application, request for a ruling or determination,

 3-6     rulemaking proceeding, contract, claim, charge, accusation, arrest,

 3-7     or judicial or other proceeding.

 3-8           SECTION 2.  The importance of this legislation and the

 3-9     crowded condition of the calendars in both houses create an

3-10     emergency and an imperative public necessity that the

3-11     constitutional rule requiring bills to be read on three several

3-12     days in each house be suspended, and this rule is hereby suspended,

3-13     and that this Act take effect and be in force from and after its

3-14     passage, and it is so enacted.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 616 passed the Senate on

         March 20, 1997, by the following vote:  Yeas 31, Nays 0.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 616 passed the House on

         April 9, 1997, by the following vote:  Yeas 147, Nays 0, one

         present not voting.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor