SRC-ARR H.B. 3739 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 3739
By: Greenberg (West)
Education
5/11/1999
Engrossed


DIGEST 

Current law does not require consultants, advisors, brokers, or other
persons providing services for the permanent school fund to file
expenditure reports.  H.B.  3739 sets forth ethics requirements in regard
to management and investment of the permanent school fund. 

PURPOSE

As proposed, H.B. 3739 sets forth ethics requirements in regard to
management and investment of the permanent school fund.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 43, Education Code, by adding Section
43.0031-43.0034, as follows: 

Sec. 43.0031. PERMANENT SCHOOL FUND ETHIC POLICY. Requires the State Board
of Education (board) to adopt and enforce an ethics policy that provides
standards of conduct relating to the management and investment of the
permanent school fund. Requires the ethics policy to include provisions
that address certain issues as they apply to the management and investment
of the permanent school fund and to persons responsible for managing and
investing the fund. Requires the policy to include provisions  applicable
to certain persons. Requires the board to submit a copy of the proposed
policy, amendments, or review and comments, not later than a certain date.
Requires the board to consider any comments from the commission or state
auditor before adopting the proposed policy. Requires the provisions of the
ethics policy that apply to a person who provides services to the board
relating to the management or investment of the permanent school fund to be
based on the Code or Ethics and the Standard of Professional Conduct
prescribed by the Association of Investment Management and Research of
other ethics standards adopted by another appropriate professional
recognized entity. Requires the board to ensure that applicable provisions
of the ethics policy are included in any contract under which a person
provides services to the board relating to the management and investment of
the permanent school fund. 

Sec. 43.0032. CONFLICTS OF INTEREST. Requires certain persons to disclose
their relationship in writing to the board. Requires the board's designee,
in the ethics policy adopt under Section 43.0031, to define the kinds of
relationship that may create a possible conflict of interest. Prohibits a
person who files a statement under Subsection (a) disclosing a possible
conflict of interest from giving advice or make decisions about a matter
affected by the possible conflict of interest unless the board, after
consultation with the general counsel of the agency, expressly waives this
prohibition. Authorizes the board to delegate the authority to waive this
prohibition.  

Sec. 43.0033. REPORTS OF EXPENDITURES. Requires certain persons providing
services to the board relating to the management and investment of the
permanent school fund to file with the board regularly, as determined by
the board, a report that describes in detail any expenditure of more than
$50 made by the person on behalf of certain persons.  
 
Sec. 43.0034. FORMS; PUBLIC INFORMATION. Requires the board to prescribe
forms for certain information. Provides that a statement, waiver, or report
described by Subsection (a) is public information. Requires the board to
designate an employee of the agency to act as custodian of statements,
waivers, and reports described by Subsection (a) for purposes of public
disclosure. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Requires the board, not later than January 1, 2000, to adopt an
ethics policy as required by Section 43.0031, Education Code, as added by
this Act, and each form for a statement, waiver, or report described by
Section 43.0034, Education Code, as added by this Act. 

SECTION 4.  Emergency clause.