By West H.B. No. 585
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the funding of public libraries.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter D, Chapter 326, Local Government Code,
1-5 is amended by adding Section 326.072 to read as follows:
1-6 Sec. 326.072. GIFTS, GRANTS, AND DONATIONS. A district may
1-7 accept and administer a gift, grant, or donation from any source to
1-8 carry out the purposes of this chapter.
1-9 SECTION 2. Chapter 441, Government Code, is amended by
1-10 adding Subchapter E to read as follows:
1-11 SUBCHAPTER E. PUBLIC LIBRARY ENDOWMENT AND OPERATING FUNDS
1-12 Sec. 441.071. TEXAS PUBLIC LIBRARY ENDOWMENT FUND. (a) The
1-13 Texas public library endowment fund is a trust fund outside the
1-14 state treasury held by a bank or depository trust company and
1-15 administered by the Texas State Library and Archives Commission for
1-16 the benefit of the public as provided by this section.
1-17 (b) The fund consists of donations accepted by the
1-18 commission under Section 441.074.
1-19 (c) The corpus of the endowment fund may not be spent for
1-20 any purpose.
1-21 (d) Not later than September 1 of each year, the commission
1-22 shall remit all or part of the interest and income earned on money
1-23 in the endowment fund to the comptroller for deposit in the state
1-24 treasury to the credit of the Texas public library fund. The
2-1 commission shall credit to the corpus of the endowment fund any
2-2 portion of the interest and income not credited to the public
2-3 library fund in the treasury.
2-4 Sec. 441.072. INVESTMENT AND MANAGEMENT OF ENDOWMENT FUND.
2-5 (a) The Texas State Library and Archives Commission shall appoint
2-6 investment managers for the management and investment of the Texas
2-7 public library endowment fund by contracting for professional
2-8 investment management services with one or more organizations that
2-9 are in the business of managing investments.
2-10 (b) In choosing and contracting for professional investment
2-11 management services and in continuing the use of an investment
2-12 manager, the commission shall act prudently and in the interest of
2-13 the beneficiaries of the endowment fund.
2-14 (c) In making and supervising investments of the endowment
2-15 fund, an investment manager and the commission shall discharge
2-16 their respective duties solely in the interest of the beneficiaries
2-17 of the fund:
2-18 (1) for the exclusive purposes of providing benefits
2-19 for the beneficiaries of the fund and defraying reasonable expenses
2-20 of administering this chapter;
2-21 (2) with the care, skill, prudence, and diligence
2-22 under the prevailing circumstances that a prudent person acting in
2-23 a similar capacity and familiar with matters of the type would use
2-24 in the conduct of an enterprise with a similar character and aims;
2-25 (3) by diversifying the investments of the fund to
2-26 minimize the risk of large losses, unless under the circumstances
2-27 it is clearly prudent not to do so; and
3-1 (4) in accordance with the documents and instruments
3-2 governing the fund to the extent that the documents and instruments
3-3 are consistent with this section.
3-4 (d) To be eligible for appointment under this section, an
3-5 investment manager must be:
3-6 (1) registered under the Investment Advisers Act of
3-7 1940 (15 U.S.C. Section 80b-1 et seq.), as amended;
3-8 (2) a bank as defined by that Act that has a trust
3-9 department; or
3-10 (3) an insurance company qualified to perform
3-11 investment services under the laws of more than one state.
3-12 (e) In a contract made under this section, the commission
3-13 shall specify any policies, requirements, or restrictions,
3-14 including criteria for determining the quality of investments and
3-15 for the use of standard rating services, that the commission adopts
3-16 for investments of the endowment fund.
3-17 (f) A member of the commission is not liable for the acts or
3-18 omissions of an investment manager appointed under Subsection (a).
3-19 A member of the commission is not permitted or obligated to invest
3-20 or otherwise to manage any asset of the fund subject to management
3-21 by the investment manager.
3-22 (g) An investment manager appointed under Subsection (a)
3-23 shall acknowledge in writing the manager's fiduciary
3-24 responsibilities to the endowment fund.
3-25 (h) The commission may at any time and shall frequently
3-26 monitor the investments made by each investment manager for the
3-27 endowment fund. The commission may contract for professional
4-1 evaluation services to fulfill this requirement.
4-2 (i) The commission shall enter into an investment custody
4-3 account agreement designating a bank or a depository trust company
4-4 to serve as custodian for all assets allocated to or generated
4-5 under a contract for professional investment management services.
4-6 (j) Under a custody account agreement, the commission shall
4-7 require the designated custodian to perform the duties and assume
4-8 responsibilities for the endowment fund that are performed and
4-9 assumed, in the absence of a contract, by the custodian of the
4-10 endowment fund. The custodian shall furnish to the commission,
4-11 annually or more frequently if required by commission rule, a sworn
4-12 statement of the amount of the endowment fund assets in the
4-13 custodian's custody.
4-14 (k) For purposes of this section, the beneficiaries of the
4-15 Texas public library endowment fund are the persons who use public
4-16 libraries, public library facilities, and public library
4-17 collections and the public libraries that benefit from the
4-18 performance of the commission's powers and duties under this
4-19 chapter.
4-20 Sec. 441.073. TEXAS PUBLIC LIBRARY FUND. (a) The Texas
4-21 public library fund is a special fund in the state treasury outside
4-22 the general revenue fund.
4-23 (b) The fund consists of money credited to the fund under
4-24 Section 441.071(d) and proceeds from sales under Section
4-25 441.074(d).
4-26 (c) Money in the fund may be appropriated only to the Texas
4-27 State Library and Archives Commission to perform the commission's
5-1 powers and duties concerning public library development under this
5-2 chapter and to pay the commission's expenses incurred under this
5-3 subchapter.
5-4 (d) The fund is exempt from the application of Sections
5-5 403.095 and 404.071. Interest and income from deposit and
5-6 investment of money in the fund shall be allocated to the fund
5-7 monthly.
5-8 Sec. 441.074. DONATIONS, APPROPRIATIONS, AND SALES. (a) The
5-9 Texas State Library and Archives Commission may solicit and accept
5-10 on behalf of the state donations of money, securities, and other
5-11 property as it determines best further the orderly development of
5-12 public library resources of the state. Money paid to the
5-13 commission under this subsection shall be deposited in the Texas
5-14 public library endowment fund.
5-15 (b) The commission by rule shall establish an acquisition
5-16 policy for accepting donations of money, securities, and other
5-17 property.
5-18 (c) The legislature may make appropriations to the
5-19 commission to carry out the purposes of this chapter.
5-20 (d) The commission may purchase and resell items it
5-21 determines appropriate for the promotion of public libraries in
5-22 Texas. The value of commission inventory, as determined by
5-23 generally accepted accounting principles, may not exceed $50,000 at
5-24 the end of any fiscal year. The net profits from those sales shall
5-25 be deposited in the Texas public library fund.
5-26 Sec. 441.075. PUBLIC LIBRARY FUND GRANT PROGRAM. (a) The
5-27 Texas State Library and Archives Commission shall make grants to
6-1 public libraries from the Texas public library fund for facility
6-2 construction projects, acquisition of books and other collection
6-3 development materials, and payment of actual and reasonable general
6-4 and administrative expenses. The commission shall allocate amounts
6-5 from the fund to direct and matching grant programs.
6-6 (b) The commission shall adopt rules:
6-7 (1) establishing methods for participation by local
6-8 governments in a matching grant program for facility construction
6-9 projects; and
6-10 (2) providing allocations for a direct grant program
6-11 for acquisition of books and other collection development materials
6-12 according to a formula that allocates a base grant to each
6-13 participating public library plus an amount that is proportional to
6-14 the size of the population served.
6-15 (c) To participate in a grant program under this section, a
6-16 public library must maintain a level of local public library
6-17 funding equal to or greater than the average funding for the three
6-18 years preceding participation. The commission shall adopt rules to
6-19 implement this requirement.
6-20 SECTION 3. Section 404.093(b), Government Code, is amended
6-21 to read as follows:
6-22 (b) This subchapter does not apply to:
6-23 (1) funds pledged to the payment of bonds, notes, or
6-24 other debts if the funds are not otherwise required to be deposited
6-25 in the treasury;
6-26 (2) funds held in trust or escrow for the benefit of a
6-27 person or entity other than a state agency;
7-1 (3) funds set apart out of earnings derived from
7-2 investment of funds held in trust for others, as administrative
7-3 expenses of the trustee agency;
7-4 (4) funds, grants, donations, and proceeds from funds,
7-5 grants, and donations, given in trust to the Texas State Library
7-6 and Archives Commission for the establishment and maintenance of
7-7 regional historical resource depositories and libraries in
7-8 accordance with Section 441.154 [441.074]; or
7-9 (5) funds under the management of the
7-10 secretary-treasurer of the Anatomical Board of the State of Texas,
7-11 as provided by Section 691.008, Health and Safety Code.
7-12 SECTION 4. The importance of this legislation and the
7-13 crowded condition of the calendars in both houses create an
7-14 emergency and an imperative public necessity that the
7-15 constitutional rule requiring bills to be read on three several
7-16 days in each house be suspended, and this rule is hereby suspended,
7-17 and that this Act take effect and be in force from and after its
7-18 passage, and it is so enacted.