Amend CSHB 2641 as follows: Strike all text below the enacting clause and replace with the following: SECTION 1. Section 531.001(4), Government Code, is amended to read as follows: (4)"Health and human services agencies" includes the: (A) Children's Trust Fund of Texas Council; (B) Interagency Council on Early Childhood Intervention Services; (C) (B) Texas Department on Aging; (D) (C) Texas Commission on Alcohol and Drug Abuse; (E) (D) Texas Commission for the Blind; (F) Texas Cancer Council; (G) (E) Texas Commission for the Deaf and Hard of Hearing; (H) (F) Texas Department of Health; (I) (G) Texas Department of Human Services; (J) (H) Texas Juvenile Probation Commission; (K) (I) Texas Department of Mental Health and Mental Retardation; (L) (J) Texas Rehabilitation Commission; and (M) (K) Department of Protective and Regulatory Services. SECTION 2. Subchapter A, Chapter 531, Government Code, is amended by adding Sections 531.0055 and 531.0056 to read as follows: Sec. 531.0055. COMMISSIONER: RESPONSIBILITY RELATING TO HEALTH AND HUMAN SERVICES AGENCIES. (a) In this section: (1) "Agency director" means the director, executive director, or commissioner of a health and human services agency. (2) "Policymaking body" means the board or commission with policymaking authority over a health and human services agency. (b) Notwithstanding any other law, the commissioner shall manage and direct the operations of each health and human services agency to implement the policies established by the commissioner in consultation with each agency's policymaking body and shall supervise and direct the activities of each agency director. (c) The authority of the commissioner with regard to each health and human services agency includes authority to: (1) establish policy for the agency; (2) establish priorities across services programs provided by the agency and to coordinate and consolidate these programs as necessary to: (A) achieve the goals of the services programs as efficiently as possible; and (B) eliminate duplication of services; (3) manage the daily operations of the agency, including the organization and management of the agency and agency operating procedures; (4) allocate resources within the agency, including use of money appropriated to the agency; and (5) establish and implement personnel and employment policies. (d) The commissioner may adopt rules to implement the commissioner's authority under this section. (e) The commissioner and each agency director shall enter into a memorandum of understanding that clearly defines the responsibilities of the agency director and the commissioner. (f) The commissioner shall establish a procedure under which a policymaking body may recommend and comment on policies governing the delivery of services to persons who are served by the health and human services agency and the rights and duties of persons who are served or regulated by the agency. Subject to Section 531.0056, each policymaking body shall adopt rules as authorized by law. The commissioner and each policymaking body shall enter into a memorandum of understanding that clearly defines the authority of the policymaking body and the authority of the commissioner. Sec. 531.0056. AUTHORITY OVER RULEMAKING AT HEALTH AND HUMAN SERVICES AGENCY. (a) Notwithstanding any other law, a health and human services agency may not publish notice of the agency's intention to adopt a rule, as required by Sections 2001.023 and 2001.024, before the rule has been approved by the commissioner. A rule adopted in violation of this section is void. (b) The commissioner may waive the requirement of this section as necessary to permit emergency rulemaking in accordance with Section 2001.034. SECTION 3. Subchapter B, Chapter 531, Government Code, is amended by adding Sections 531.0246, 531.0247, and 531.0248 to read as follows: Sec. 531.0246. STATE AND REGIONAL CONSOLIDATION OF ADMINISTRATIVE SUPPORT SERVICES. (a) The commission shall require the Texas Department of Health, the Texas Department of Human Services, the Department of Protective and Regulatory Services, and the Texas Rehabilitation Commission, under the direction of the commission, to consolidate among the agencies all of the agencies' state and regional administrative support services. The consolidation shall include consolidating each agency's support services, including clerical and administrative support services and purchasing support services, with support services provided to or by the other agencies. The consolidation may include, to the extent appropriate, requiring the colocation of all or a portion of one agency's employees and programs in the same building with one or more of the other agencies' employees or programs or at a location near or adjacent to the location of one of the other agencies. (b) The commission shall adopt rules and prescribe timelines for the consolidation. (c) As part of the consolidation, the commission shall identify the administrative support services to be consolidated, specify the location at which an identified service that is not provided by a private vendor will be performed, and prescribe performance specifications for the consolidated services. (d) The commission shall establish planning and working groups composed of commission personnel and personnel from each of the affected agencies to help plan and implement the consolidation and to advise the commission regarding its duties under Subsection (c). (e) The Health and Human Services Commission, in coordination with the Texas Department of Mental Health and Mental Retardation, shall evaluate the current and long-term costs associated with serving in-patient psychiatric needs of persons living in counties now served by the Austin State Hospital, the San Antonio State Hospital, and the Kerrville State Hospital. This plants and other long-term asset management issues associated with the operation of the hospitals, as well as other issues associated with quality psychiatric care. After such determination is made, the Health and Human Services Commission shall begin to take action to influence the utilization of these state hospitals in order to ensure efficient service delivery. Sec. 531.0247. STATE AND REGIONAL CONSOLIDATION OF INFORMATION RESOURCES SERVICES. (a) The commission shall require each health and human services agency, under the direction of the commission, to consolidate among the agencies all of the agencies' state and regional information resources services. The consolidation shall include consolidating each agency's information resources support services and information resources purchasing support services with services provided to or by the other agencies. The consolidation may include, to the extent appropriate, requiring the colocation of all or a portion of one agency's employees or information resources hardware in the same building with one or more of the other agencies' employees or hardware or at a location near or adjacent to the location of one of the other agencies. (b) The commission shall adopt rules and prescribe timelines for the consolidation. (c) As part of the consolidation, the commission shall identify the information resources services to be consolidated, specify the location at which an identified service that is not provided by a private vendor will be performed, and prescribe performance specifications for the consolidated services. (d) The commission shall establish planning and working groups composed of commission personnel and personnel from each of the affected agencies to help plan and implement the consolidation and to advise the commission regarding its duties under Subsection (c). Sec. 531.0248. STATE AND REGIONAL CONSOLIDATION OF ADMINISTRATIVE HEARINGS FUNCTIONS. (a) The commission shall require the Texas Department of Health, the Texas Department of Human Services, and the Texas Department of Mental Health and Mental Retardation, under the direction of the commission, to consolidate the administrative hearings functions conducted within each agency. (b) The consolidation shall include consolidating each agency's: (1) pool of examiners or judges; (2) pool of attorneys assigned to administrative hearings functions; and (3) docketing and related administrative support services. (c) The commission shall adopt rules and prescribe timelines for the consolidation. To the extent feasible and not inconsistent with law, the rules shall require the establishment of uniform hearing processes to facilitate consolidation. (d) The commission shall establish planning and working groups composed of commission personnel and personnel from each of the affected agencies to help plan and implement the consolidation and to advise the commission regarding its duties under this section. (e) This section does not apply to administrative hearings conducted by the State Office of Administrative Hearings. SECTION 4. Sections 531.0271 and 531.028, Government Code, are amended to read as follows: Sec.531.0271. TRANSFER OF FUNDS AMONG HEALTH AND HUMAN SERVICES AGENCIES OPERATING BUDGETS. The commission may, within the limits established by and subject to (a) In addition to the provisions of the General Appropriations Act, transfer amounts appropriated to health and human services agencies among the agencies to: (1) enhance the receipt of federal money under the federal funds management system established under Section 531.028; (2) enhance the delivery of health and human services in the state; and (3) accomplish the coordination and consolidation of health and human services programs in accordance with Section 531.0055 and the coordinated strategic plan for health and human services the commission shall review and comment on. (1) the annual operating budget of each health and human services agency, and (2) the transfer of funds between budget strategies made by each health and human services agency before that transfer. (b) The commission shall issue a quarterly report regarding the projected expenditures by budget strategy of each health and human services agency compared to each agency's operating budget . Sec. 531.028. MANAGEMENT AND DISTRIBUTION OF FEDERAL FUNDS. The commissioner shall: (1) request budget execution for the transfer of funds from one agency to another; (2) establish a federal health and human services funds management system and maximize the availability of those funds; and (2) implement (3) review and comment on health and human services agency formulas for the distribution of funds to ensure that the formulas, to the extent permitted by federal law, consider such need factors as client base, population, and economic and geographic factors within the regions of the state. SECTION 5. Sections 21.004(a) and (b), Human Resources Code, are amended to read as follows: (a) The Commissioner of Human Services is the executive and administrative officer of the department. The commissioner exercises all rights, powers, and duties imposed or conferred by law on the department unless the right, power, or duty is specifically delegated by the commissioner of health and human services board to the department's agents or employees. (b) The commissioner is appointed by the commissioner of health and human services board with the advice of the board and the approval of the governor. The commissioner and serves at the pleasure of the commissioner of health and human services board . SECTION 6. Chapter 22, Human Resources Code, is amended by adding Section 22.0001 to read as follows: Sec. 22.0001. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the board and commissioner as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power of duty given to the board or commissioner by this title or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 7. Section 40.027, Human Resources Code, is amended to read as follows: Sec. 40.027. EXECUTIVE DIRECTOR. (a) The commissioner of health and human services shall appoint board shall employ the executive director with the advice of the board and the approval of the governor. The executive director serves at the pleasure of the commissioner board . (b) The executive director is the executive head of the department. The executive director shall perform the duties assigned by the commissioner of health and human services board and state law. SECTION 8. Subchapter C, Chapter 40, Human Resources Code, is amended by adding Section 40.0505 to read as follows: Sec. 40.0505. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and the duties relating to the board and executive director as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the board or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 9. Chapter 73, Human Resources Code, is amended by adding Section 73.0045 to read as follows: Sec. 73.0045. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the board and the executive director of the board as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the board or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 10. Sections 73.0052(b) and (c), Human Resources Code, are amended to read as follows: (b) The commissioner of health and human services shall appoint board shall employ an executive director with the advice of the board and the approval of the governor. The executive director serves at the pleasure of the commissioner. The , and the executive director shall establish necessary administrative units, and hire other necessary employees. (c) Utilizing established standards, the commissioner of health and human services board shall evaluate the performance of the executive director annually. SECTION 11. Chapter 74, Human Resources Code, is amended by adding Sections 74.0035 and 74.0036 to read as follows: Sec. 74.0035. EXECUTIVE DIRECTOR. The commissioner of health and human services shall appoint the executive director of the council with the advice of the council and the approval of the governor. The executive director serves at the pleasure of the commissioner. Sec. 74.0036. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the council and the executive director as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the council or the executive director of the council by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 12. Chapter 81, Human Resources Code, is amended by adding Section 81.0055 to read as follows: Sec. 81.0055. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the commission and the executive director of the commission as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the commission or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 13. Sections 81.008(a) and (b), Human Resources Code, are amended to read as follows: (a) The commissioner of health and human services commission shall appoint an executive director with the advice of the commission and the approval of the governor. The executive director serves at the pleasure of the commissioner. (b) In selecting an executive director, the commissioner of health and human services commission shall give preference to a deaf or hard of hearing person. SECTION 14. Sections 91.012(a), (b), and (d), Human Resources Code, are amended to read as follows: (a) The commissioner of health and human services commission shall annually appoint an executive director with the advice of the commission and the approval of the governor. The executive director serves at the pleasure of the commissioner. (b) The commissioner of health and human services commission shall select the executive director, according to established personnel standards, on the basis of education, training, experience, and demonstrated ability. (d) The On commission approval, the executive director: (1) shall appoint personnel necessary to efficiently accomplish commission purposes; (2) may delegate to an employee a power of the executive director except the power to adopt rules or appoint personnel; (3) shall establish appropriate administrative units within commission programs; (4) may accept and use gifts and grants to the commission to carry out the purposes of this title, if the commission determines that the conditions of the gift or grant are consistent with this title; and (5) may take other actions that the executive director considers necessary or appropriate to carry out commission purposes. SECTION 15. Subchapter C, Chapter 91, Human Resources Code, is amended by adding Section 91.0205 to read as follows: Sec. 91.0205. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the commission and executive director as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the commission or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 16. Section 101.004(a), Human Resources Code, is amended to read as follows: (a) The commissioner of health and human services board shall appoint an executive director of aging with the advice of the board and the approval of the governor. The executive director shall discharge all executive and administrative functions of the department. The executive director must be a person with executive ability and experience in the area of aging. The executive director serves at the pleasure of the commissioner board . SECTION 17. Subchapter B, Chapter 101, Human Resources Code, is amended by adding Section 101.0205 to read as follows: Sec. 101.0205. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the board and executive director as provided by Sections 531.0055 and 531.0056,Government Code. To the extent a power or duty given to the board or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 18. Section 111.017, Human Resources Code, is amended to read as follows: Sec. 111.017. COMMISSIONER. This chapter is administered by the commissioner under operational policies established by the commissioner of health and human services board . The commissioner is appointed by the commissioner of health and human services board , with the advice of the board and the approval of the governor, on the basis of education, training, experience, and demonstrated ability. The commissioner serves at the pleasure of the commissioner of health and human services. The commissioner serves as board and is secretary to the board, as well as chief administrative officer of the agency. SECTION 19. Subchapter C, Chapter 111, Human Resources Code, is amended by adding Section 111.0505 to read as follows: Sec. 111.0505. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the commission and commissioner as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the commission or commissioner by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 20. Section 141.020(a), Human Resources Code, is amended to read as follows: (a) The commissioner of health and human services shall appoint commission shall employ a director with the advice of the commission and the approval of the governor. The director serves at the pleasure of the commissioner. To be eligible for employment as the director, a person must: (1) comply with the standards required for a probation officer; and (2) have at least two years' experience in the administration and supervision of probation services. SECTION 21. Subchapter C, Chapter 141, Human Resources Code, is amended by adding Section 141.0405 to read as follows: Sec. 141.0405. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the commission and director as provided by Sections 531.0055 or 531.0056, Government Code. To the extent a power or duty given to the commission or director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 22. Section 11.012, Health and Safety Code, is amended to read as follows: Sec. 11.012. COMMISSIONER. (a) The commissioner of health and human services shall appoint board shall employ the commissioner with the advice of the board and the approval of the governor. The commissioner serves at the will of the commissioner of health and human services board . (b) Except as provided in Subsection (c), the commissioner must: (1) have at least five years of experience in the administration of public health systems; and (2) be a person licensed to practice medicine in this state. (c) The commissioner of health and human services board may, based on the qualifications and experience in administering public health systems, appoint and on two thirds vote of the board, employ a person other than a physician as the commissioner. (d) If the commissioner of health and human services appoints board employs a person as commissioner who is not a physician, then the commissioner of health and human services board shall designate a person licensed to practice medicine in this state as chief medical executive. (e) The commissioner is the executive head of the department. The commissioner shall perform the duties assigned by the commissioner of health and human services board and state law, subject to the provisions of this subtitle. (f) The commissioner of health and human services board may supplement the salary of the commissioner with the approval of the governor. The salary may not exceed 1.5 times the salary of the governor, from funds appropriated to the department. The use of funds from other sources are not limited by this subsection. SECTION 23. Subchapter A, Chapter 12, Health and Safety Code, is amended by adding Section 12.0001 to read as follows: Sec. 12.0001. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the board and commissioner as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the board or commissioner by this title or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 24. Section 102.009(b), Health and Safety Code, is amended to read as follows: (b) The council may: (1) employ an executive director and secretary, (2) appoint advisory committees necessary to implement the Texas Cancer Plan and employ necessary staff to provide administrative support; (2) (3) monitor contracts and agreements for cancer programs authorized by this chapter; (3) (4) conduct necessary studies and surveys; (4) (5) accept, transfer, and spend funds made available by the federal or state government or by any other public or private source, subject to limitations and conditions prescribed by legislative appropriation; and (5) (6) use the existing staff of an appointed official or agency to assist the council in performing its duties under this chapter. SECTION 25. Chapter 102, Health and Safety Code, is amended by adding Sections 102.0095 and 102.0096 to read as follows: Sec. 102.0095. EXECUTIVE DIRECTOR; SECRETARY. (a) The commissioner of health and human services shall appoint the executive director of the council with the advice of the council and the approval of the governor. The executive director serves at the pleasure of the commissioner. (b) The council may employ a secretary of the council. Sec. 102.0096. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the council and the executive director as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the council or the executive director of the council by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 26. Section 461.011(a), Health and Safety Code, is amended to read as follows: (a) The commissioner of health and human services commission shall employ an executive director with the advice of the commission and the approval of the governor. The executive director shall hire other necessary employees. SECTION 27. Chapter 461, Health and Safety Code, is amended by adding Section 461.0115 to read as follows: Sec. 461.0115. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the commission and executive director as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the commission or executive director by this chapter or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 28. Sections 532.011 (a), (c), (d), and (f), Health and Safety Code, are amended to read as follows: (a) The commissioner of health and human services board shall appoint a commissioner with the advice of the board and the approval of the governor. (c) The commissioner holds office at the will of the commissioner of health and human services board . (d) The Subject to board rules and basic and general policies, the commissioner: (1) Has the administrative and decisional powers granted under this subtitle; and (2) shall administer the department and this subtitle and ensure assure the effective administration of the department and its programs and services. (f) The With the board's approval, the commissioner shall: (1) establish an organizational structure within the department that will promote the effective administration of this subtitle; and (2) establish the duties and functions of the department's staff. SECTION 29. Subchapter A, Chapter 533, Health and Safety Code, is amended by adding Section 533.0001 to read as follows: Sec. 533.0001. POWERS AND DUTIES OF COMMISSIONER OF HEALTH AND HUMAN SERVICES. The commissioner of health and human services has the powers and duties relating to the board and commissioner as provided by Sections 531.0055 and 531.0056, Government Code. To the extent a power or duty given to the board or commissioner by this title or another law conflicts with Section 531.0055 or 531.0056, Government Code, Section 531.0055 or 531.0056 controls. SECTION 30. Section 531.0272, Government Code, is repealed. SECTION 31. (a) In this section, "agency director" has the meaning assigned by Section 531.0055, Government Code, as added by this Act. (b) An agency director serving on the effective date of this Act continues to serve in that position until the expiration of the term of that person's appointment or employment or until removed from the position as provided by law. A vacancy in the position of an agency director that occurs on or after the effective date of this Act shall be filled by the commissioner of health and human services as required by the change in law made by this Act. SECTION 32. (a) The commissioner of health and human services shall develop a plan for implementation of Sections 531.0055, 531.0056, 531.0246, 531.0247, and 531.0248, Government Code, as added by this Act. (b) Not later than November 1, 1999, the commissioner of health and human services shall submit the portion of the plan developed under Subsection (a) of this section that is applicable to implementation of Section 531.0247, Government Code, as added by this Act, to the Legislative Budget Board and the Department of Information Resources for review and comment. The commissioner of health and human services shall implement this portion of the plan not later than January 1, 2001. (c) Not later than January 1, 2001, the commissioner of health and human services shall submit to the governor, the lieutenant governor, and the speaker of the house of representatives a report detailing the plan developed under Subsection (a) of this section and describing the implementation of the changes in law made by this Act. SECTION 33. (a) The Health and Human Services Commission shall conduct a study to evaluate the relationship between the commission and other state agencies that provide services to individuals who also receive services from health and human services agencies, including the Texas Workforce Commission, the Texas Youth Commission, the Texas Education Agency, and Texas Department of Housing and Community Affairs. (b) Not later than January 1, 2001, the Health and Human Services Commission shall submit a report relating to the results of the study conducted under this section to the governor, lieutenant governor, and the speaker of the house of representatives. The report may include proposed legislation necessary to clarify the relationship of the Health and Human Services Commission to the agencies considered in the study as appropriate to improve the quality and efficiency of services provided in this state. SECTION 34. This Act takes effect September 1, 1999. SECTION 35. The importance of this legislation and the crowded condition of the calendars in both houses creates an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended. *END-AMDENDMENT* BEGIN-AMEND;BILL:HB585;READING:3;NUM:1* Amend HB 585 on third reading by adding the following appropriately numbered sections to the bill to read as follows and by renumbering the existing sections of the bill accordingly: SECTION _____. Chapter 441, Government Code, is amended by adding Subchapter E to read as follows: SUBCHAPTER E. PUBLIC LIBRARY ENDOWMENT AND OPERATING FUNDS Sec. 441.071. TEXAS PUBLIC LIBRARY ENDOWMENT FUND. (a) The Texas public library endowment fund is a trust fund outside the state treasury held by a bank or depository trust company and administered by the commission for the benefit of the public as provided by this section. (b) The fund consists of donations accepted by the commission under Section 441.074. (c) The corpus of the endowment fund may not be spent for any purpose. (d) Not later than September 1 of each year, the commission shall remit all or part of the interest and income earned on money in the endowment fund to the comptroller for deposit in the state treasury to the credit of the Texas public library fund. The commission shall credit to the corpus of the endowment fund any portion of the interest and income not credited to the public library fund in the treasury. Sec. 441.072. INVESTMENT AND MANAGEMENT OF ENDOWMENT FUND. (a) The commission shall appoint investment managers for the management and investment of the Texas public library endowment fund by contracting for professional investment management services with one or more organizations that are in the business of managing investments. (b) In choosing and contracting for professional investment management services and in continuing the use of an investment manager, the commission shall act prudently and in the interest of the beneficiaries of the endowment fund. (c) In making and supervising investments of the endowment fund, an investment manager and the commission shall discharge their respective duties solely in the interest of the beneficiaries of the fund: (1) for the exclusive purposes of providing benefits for the beneficiaries of the fund and defraying reasonable expenses of administering this chapter; (2) with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in a similar capacity and familiar with matters of the type would use in the conduct of an enterprise with a similar character and aims; (3) by diversifying the investments of the fund to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (4) in accordance with the documents and instruments governing the fund to the extent that the documents and instruments are consistent with this section. (d) To be eligible for appointment under this section, an investment manager must be: registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), as amended; (2) a bank as defined by that Act that has a trust department; or (3) an insurance company qualified to perform investment services under the laws of more than one state. (e) in a contract made under this section, the commission shall specify any policies, requirements, or restrictions, including criteria for determining the quality of investments and for the use of standard rating services, that the commission adopts for investments of the endowment fund. (f) A member of the commission is not liable for the acts or omissions of an investment manager appointed under Subsection (a). A member of the commission is not permitted or obligated to invest or otherwise to manage any asset of the fund subject to management by the investment manager. (g) An investment manager appointed under Subsection (a) shall acknowledge in writing the manager's fiduciary responsibilities to the endowment fund. (h) The commission may at any time and shall frequently monitor the investments made by each investment manager for the endowment fund. The commission may contract for professional evaluation services to fulfill this requirement. (i) The commission shall enter into an investment custody account agreement designating a bank or a depository trust company to serve as custodian for all assets allocated to or generated under a contract for professional investment management services. (j) Under a custody account agreement, the commission shall require the designated custodian to perform the duties and assume responsibilities for the endowment fund that are performed and assumed, in the absence of a contract, by the custodian of the endowment fund. The custodian shall furnish to the commission, annually or more frequently if required by commission rule, a sworn statement of the amount of the endowment fund assets in the custodian's custody. (k) For purposes of this section, the beneficiaries of the Texas public library endowment fund are the persons who use public libraries, public library facilities, and public library collections and the public libraries that benefit from the performance of the commission's powers and duties under this chapter. Sec. 441.073. TEXAS PUBLIC LIBRARY FUND. (a) The Texas public library fund is a special fund in the state treasury outside the general revenue fund. (b) The fund consists of money credited to the fund under Section 441.071(d) and proceeds from sales under Section 441.074(d). (c) Money in the fund may be appropriated only to the commission to perform the commission's powers and duties concerning public library development under this chapter and to pay the commission's expenses incurred under this subchapter. (d) The fund is exempt from the application of Sections 403.095 and 404.071. Interest and income from deposit and investment of money in the fund shall be allocated to the fund monthly. Sec. 441.074. DONATIONS, APPROPRIATIONS, AND SALES. (a) The commission may solicit and accept on behalf of the state donations of money, securities, and other property as it determines best further the orderly development of public library resources of the state. Money paid to the commission under this subsection shall be deposited in the Texas public library endowment fund. (b) The commission by rule shall establish an acquisition policy for accepting donations of money, securities, and other property. (c) The legislature may make appropriations to the commission to carry out the purposes of this chapter. (d) The commission may purchase and resell items it determines appropriate for the promotion of public libraries in Texas. The value of commission inventory, as determined by generally accepted accounting principles, may not exceed $50,000 at the end of any fiscal year. The net profits from those sales shall be deposited in the Texas public library fund. Sec. 441.075. PUBLIC LIBRARY FUND GRANT PROGRAM. (a) The commission shall make grants to public libraries from the Texas public library fund for facility construction projects, acquisition of books and other collection development materials and payment of actual and reasonable general and administrative expenses. The commission shall allocate amounts from the fund to direct and matching grant programs. (b) The commission shall adopt rules: (1) establishing methods for participation by local governments in a matching grant program for facility construction projects; and (2) providing allocations for a direct grant program for acquisition of books and other collection development materials according to a formula that allocates a base grant to each participating public library plus an amount that is proportional to the size of the population served. (c) To participate in a grant program under this section, a public library must maintain a level of local public library funding equal to or greater than the average funding for the three years preceding participation. The commission shall adopt rules to implement this requirement. SECTION _____. Section 404.093(b), Government Code, is amended to read as follows: (b) This subchapter does not apply to: (1) funds pledged to the payment of bonds, notes, or other debts if the funds are not otherwise required to be deposited in the treasury; (2) funds held in trust or escrow for the benefit of a person or entity other than a state agency; (3) funds set apart out of earnings derived from investment of funds held in trust for others, as administrative expenses of the trustee agency; (4) funds, grants, donations, and proceeds from funds, grants, and donations, given in trust to the Texas State Library and Archives Commission for the establishment and maintenance of regional historical resource depositories and libraries in accordance with Section 441.154 441.074 ; or (5) funds under the management of the secretary-treasurer of the Anatomical Board of the State of Texas, as provided by Section 691.008, Health and Safety Code.