Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

         By:  Sibley                                  S.B.  No. 616

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to standards of conduct for former directors, officers and

 1-2     employees of a nonprofit corporation under contract to invest the

 1-3     permanent university fund and the imposition of criminal penalties.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 66.08, Education Code, is  amended by

 1-6     amending Subsections (i) and (l) and adding Subsections (m), (n),

 1-7     and (o) to read as follows:

 1-8           (i)  The corporation may not enter into an agreement or

 1-9     transaction with a:

1-10                 (1)  director, officer, or employee of the corporation

1-11     acting in other than an official capacity on behalf of the

1-12     corporation; or

1-13                 (2)  business entity in which a director, officer, or

1-14     employee of the corporation has an interest[;].

1-15                 [(3)  former director, officer, or employee of the

1-16     corporation on or before the second anniversary of the date the

1-17     person ceased to be a director, officer, or employee of the

1-18     corporation; or]

1-19                 [(4)  business entity in which a former director,

1-20     officer, or employee of the corporation has an interest on or

1-21     before the second anniversary of the date the person ceased to be a

1-22     director, officer, or employee of the corporation.]

1-23           (j)  An agreement or transaction entered into in violation of

 2-1     Subsection (i) is void.

 2-2           (k)  For purposes of this section, a person has an interest

 2-3     in a business entity if:

 2-4                 (1)  the person owns five percent or more of the voting

 2-5     stock or shares of the business entity;

 2-6                 (2)  the person owns five percent or more of the fair

 2-7     market value of the business entity; or

 2-8                 (3)  money received by the person from the business

 2-9     entity exceeds five percent of the person's gross income for the

2-10     preceding calendar year.

2-11           (l)  A former director of the corporation may not make any

2-12     communication to or appearance before a director, officer, or

2-13     employee of the corporation before the second anniversary of the

2-14     date the individual ceased to be a director of the corporation if

2-15     the communication or appearance is made:

2-16                 (1)  with the intent to influence; and

2-17                 (2)  on behalf of any person in connection with any

2-18     matter on which the person seeks action by the corporation.

2-19           (m)  A former officer or employee of the corporation may not

2-20     represent any person or receive compensation for services rendered

2-21     on behalf of any person regarding a particular matter in which the

2-22     former officer or employee participated during the period of

2-23     service or employment, either through personal involvement or

2-24     because the particular matter was within the officer's or

2-25     employee's responsibility.  In this subsection, "participated" and

 3-1     "particular matter" have the meanings assigned by Section 572.054,

 3-2     Government Code.

 3-3           (n)  An individual commits an offense if the individual

 3-4     violates Subsection (l) or (m) of this section.  An offense under

 3-5     this subsection is a Class A misdemeanor.

 3-6           [(l)] (o)  In this section:

 3-7                 (1)  "Board" means the board of regents of The

 3-8     University of Texas System.

 3-9                 (2)  "Governing board," "institutional fund," and

3-10     "institution of higher education" have the meanings assigned by

3-11     Chapter 163, Property Code.

3-12           SECTION 2.  Emergency.  The importance of this legislation

3-13     and the crowded condition of the calendars in both houses create an

3-14     emergency and an imperative public necessity that the

3-15     constitutional rule requiring bills to be read on three several

3-16     days in each house be suspended, and this rule is hereby suspended,

3-17     and that this Act take effect and be in force from and after its

3-18     passage, and it is so enacted.