By Pitts H.B. No. 1673
76R3011 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the financing and administration of a program for
1-3 public library development.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 441, Government Code, is amended by
1-6 adding Subchapter E to read as follows:
1-7 SUBCHAPTER E. PUBLIC LIBRARY ENDOWMENT AND OPERATING FUNDS
1-8 Sec. 441.071. TEXAS PUBLIC LIBRARY ENDOWMENT FUND. (a) The
1-9 Texas public library endowment fund is a trust fund outside the
1-10 state treasury held by a bank or depository trust company and
1-11 administered by the commission for the benefit of the public as
1-12 provided by this section.
1-13 (b) The fund consists of donations accepted by the
1-14 commission under Section 441.074.
1-15 (c) The corpus of the endowment fund may not be spent for
1-16 any purpose.
1-17 (d) Not later than September 1 of each year, the commission
1-18 shall remit all or part of the interest and income earned on money
1-19 in the endowment fund to the comptroller for deposit in the state
1-20 treasury to the credit of the Texas public library fund. The
1-21 commission shall credit to the corpus of the endowment fund any
1-22 portion of the interest and income not credited to the public
1-23 library fund in the treasury.
1-24 Sec. 441.072. INVESTMENT AND MANAGEMENT OF ENDOWMENT FUND.
2-1 (a) The commission shall appoint investment managers for the
2-2 management and investment of the Texas public library endowment
2-3 fund by contracting for professional investment management services
2-4 with one or more organizations that are in the business of managing
2-5 investments.
2-6 (b) In choosing and contracting for professional investment
2-7 management services and in continuing the use of an investment
2-8 manager, the commission shall act prudently and in the interest of
2-9 the beneficiaries of the endowment fund.
2-10 (c) In making and supervising investments of the endowment
2-11 fund, an investment manager and the commission shall discharge
2-12 their respective duties solely in the interest of the beneficiaries
2-13 of the fund:
2-14 (1) for the exclusive purposes of providing benefits
2-15 for the beneficiaries of the fund and defraying reasonable expenses
2-16 of administering this chapter;
2-17 (2) with the care, skill, prudence, and diligence
2-18 under the prevailing circumstances that a prudent person acting in
2-19 a similar capacity and familiar with matters of the type would use
2-20 in the conduct of an enterprise with a similar character and aims;
2-21 (3) by diversifying the investments of the fund to
2-22 minimize the risk of large losses, unless under the circumstances
2-23 it is clearly prudent not to do so; and
2-24 (4) in accordance with the documents and instruments
2-25 governing the fund to the extent that the documents and instruments
2-26 are consistent with this section.
2-27 (d) To be eligible for appointment under this section, an
3-1 investment manager must be:
3-2 (1) registered under the Investment Advisers Act of
3-3 1940 (15 U.S.C. Section 80b-1 et seq.), as amended;
3-4 (2) a bank as defined by that Act that has a trust
3-5 department; or
3-6 (3) an insurance company qualified to perform
3-7 investment services under the laws of more than one state.
3-8 (e) In a contract made under this section, the commission
3-9 shall specify any policies, requirements, or restrictions,
3-10 including criteria for determining the quality of investments and
3-11 for the use of standard rating services, that the commission
3-12 adopts for investments of the endowment fund.
3-13 (f) A member of the commission is not liable for the acts or
3-14 omissions of an investment manager appointed under Subsection (a).
3-15 A member of the commission is not permitted or obligated to invest
3-16 or otherwise to manage any asset of the fund subject to management
3-17 by the investment manager.
3-18 (g) An investment manager appointed under Subsection (a)
3-19 shall acknowledge in writing the manager's fiduciary
3-20 responsibilities to the endowment fund.
3-21 (h) The commission may at any time and shall frequently
3-22 monitor the investments made by each investment manager for the
3-23 endowment fund. The commission may contract for professional
3-24 evaluation services to fulfill this requirement.
3-25 (i) The commission shall enter into an investment custody
3-26 account agreement designating a bank or a depository trust company
3-27 to serve as custodian for all assets allocated to or generated
4-1 under a contract for professional investment management services.
4-2 (j) Under a custody account agreement, the commission shall
4-3 require the designated custodian to perform the duties and assume
4-4 responsibilities for the endowment fund that are performed and
4-5 assumed, in the absence of a contract, by the custodian of the
4-6 endowment fund. The custodian shall furnish to the commission,
4-7 annually or more frequently if required by commission rule, a sworn
4-8 statement of the amount of the endowment fund assets in the
4-9 custodian's custody.
4-10 (k) For purposes of this section, the beneficiaries of the
4-11 Texas public library endowment fund are the persons who use public
4-12 libraries, public library facilities, and public library
4-13 collections and the public libraries that benefit from the
4-14 performance of the commission's powers and duties under this
4-15 chapter.
4-16 Sec. 441.073. TEXAS PUBLIC LIBRARY FUND. (a) The Texas
4-17 public library fund is a special fund in the state treasury outside
4-18 the general revenue fund.
4-19 (b) The fund consists of money credited to the fund under
4-20 Section 441.071(d) and proceeds from sales under Section
4-21 441.074(d).
4-22 (c) Money in the fund may be appropriated only to the
4-23 commission to perform the commission's powers and duties concerning
4-24 public library development under this chapter and to pay the
4-25 commission's expenses incurred under this subchapter.
4-26 (d) The fund is exempt from the application of Sections
4-27 403.095 and 404.071. Interest and income from deposit and
5-1 investment of money in the fund shall be allocated to the fund
5-2 monthly.
5-3 Sec. 441.074. DONATIONS, APPROPRIATIONS, AND SALES. (a)
5-4 The commission may solicit and accept on behalf of the state
5-5 donations of money, securities, and other property as it determines
5-6 best further the orderly development of public library resources of
5-7 the state. Money paid to the commission under this subsection
5-8 shall be deposited in the Texas public library endowment fund.
5-9 (b) The commission by rule shall establish an acquisition
5-10 policy for accepting donations of money, securities, and other
5-11 property.
5-12 (c) The legislature may make appropriations to the
5-13 commission to carry out the purposes of this chapter.
5-14 (d) The commission may purchase and resell items it
5-15 determines appropriate for the promotion of public libraries in
5-16 Texas. The value of commission inventory, as determined by
5-17 generally accepted accounting principles, may not exceed $50,000 at
5-18 the end of any fiscal year. The net profits from those sales shall
5-19 be deposited in the Texas public library fund.
5-20 Sec. 441.075. PUBLIC LIBRARY FUND GRANT PROGRAM. (a) The
5-21 commission shall make grants to public libraries from the Texas
5-22 public library fund for facility construction projects, acquisition
5-23 of books and other collection development materials, and payment of
5-24 actual and reasonable general and administrative expenses. The
5-25 commission shall allocate amounts from the fund to direct and
5-26 matching grant programs.
5-27 (b) The commission shall adopt rules:
6-1 (1) establishing methods for participation by local
6-2 governments in a matching grant program for facility construction
6-3 projects; and
6-4 (2) providing allocations for a direct grant program
6-5 for acquisition of books and other collection development materials
6-6 according to a formula that allocates a base grant to each
6-7 participating public library plus an amount that is proportional to
6-8 the size of the population served.
6-9 (c) To participate in a grant program under this section, a
6-10 public library must maintain a level of local public library
6-11 funding equal to or greater than the average funding for the three
6-12 years preceding participation. The commission shall adopt rules to
6-13 implement this requirement.
6-14 SECTION 2. Section 404.093(b), Government Code, is amended
6-15 to read as follows:
6-16 (b) This subchapter does not apply to:
6-17 (1) funds pledged to the payment of bonds, notes, or
6-18 other debts if the funds are not otherwise required to be deposited
6-19 in the treasury;
6-20 (2) funds held in trust or escrow for the benefit of a
6-21 person or entity other than a state agency;
6-22 (3) funds set apart out of earnings derived from
6-23 investment of funds held in trust for others, as administrative
6-24 expenses of the trustee agency;
6-25 (4) funds, grants, donations, and proceeds from funds,
6-26 grants, and donations, given in trust to the Texas State Library
6-27 and Archives Commission for the establishment and maintenance of
7-1 regional historical resource depositories and libraries in
7-2 accordance with Section 441.154 [441.074]; or
7-3 (5) funds under the management of the
7-4 secretary-treasurer of the Anatomical Board of the State of Texas,
7-5 as provided by Section 691.008, Health and Safety Code.
7-6 SECTION 3. This Act takes effect September 1, 1999.
7-7 SECTION 4. The importance of this legislation and the
7-8 crowded condition of the calendars in both houses create an
7-9 emergency and an imperative public necessity that the
7-10 constitutional rule requiring bills to be read on three several
7-11 days in each house be suspended, and this rule is hereby suspended.