1-1 AN ACT
1-2 relating to ethics requirements in regard to management and
1-3 investment of the permanent school fund.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 43, Education Code, is amended by adding
1-6 Sections 43.0031-43.0034 to read as follows:
1-7 Sec. 43.0031. PERMANENT SCHOOL FUND ETHICS POLICY. (a) In
1-8 addition to any other requirements provided by law, the State Board
1-9 of Education shall adopt and enforce an ethics policy that provides
1-10 standards of conduct relating to the management and investment of
1-11 the permanent school fund. The ethics policy must include
1-12 provisions that address the following issues as they apply to the
1-13 management and investment of the permanent school fund and to
1-14 persons responsible for managing and investing the fund:
1-15 (1) general ethical standards;
1-16 (2) conflicts of interest;
1-17 (3) prohibited transactions and interests;
1-18 (4) the acceptance of gifts and entertainment;
1-19 (5) compliance with applicable professional standards;
1-20 (6) ethics training; and
1-21 (7) compliance with and enforcement of the ethics
1-22 policy.
1-23 (b) The ethics policy must include provisions applicable to:
1-24 (1) members of the State Board of Education;
2-1 (2) the commissioner;
2-2 (3) employees of the agency; and
2-3 (4) any person who provides services to the board
2-4 relating to the management or investment of the permanent school
2-5 fund.
2-6 (c) Not later than the 45th day before the date on which the
2-7 board intends to adopt a proposed ethics policy or an amendment to
2-8 or revision of an adopted ethics policy, the board shall submit a
2-9 copy of the proposed policy, amendment, or revision to the Texas
2-10 Ethics Commission and the state auditor for review and comments.
2-11 The board shall consider any comments from the commission or state
2-12 auditor before adopting the proposed policy.
2-13 (d) The provisions of the ethics policy that apply to a
2-14 person who provides services to the board relating to the
2-15 management or investment of the permanent school fund must be based
2-16 on the Code of Ethics and the Standards of Professional Conduct
2-17 prescribed by the Association for Investment Management and
2-18 Research or other ethics standards adopted by another appropriate
2-19 professionally recognized entity.
2-20 (e) The board shall ensure that applicable provisions of the
2-21 ethics policy are included in any contract under which a person
2-22 provides services to the board relating to the management and
2-23 investment of the permanent school fund.
2-24 Sec. 43.0032. CONFLICTS OF INTEREST. (a) A member of the
2-25 State Board of Education, the commissioner, an employee of the
2-26 agency, or a person who provides services to the board that relate
2-27 to the management or investment of the permanent school fund who
3-1 has a business, commercial, or other relationship that could
3-2 reasonably be expected to diminish the person's independence of
3-3 judgment in the performance of the person's responsibilities
3-4 relating to the management or investment of the fund shall disclose
3-5 the relationship in writing to the board.
3-6 (b) The board or the board's designee shall, in the ethics
3-7 policy adopted under Section 43.0031, define the kinds of
3-8 relationships that may create a possible conflict of interest.
3-9 (c) A person who files a statement under Subsection (a)
3-10 disclosing a possible conflict of interest may not give advice or
3-11 make decisions about a matter affected by the possible conflict of
3-12 interest unless the board, after consultation with the general
3-13 counsel of the agency, expressly waives this prohibition. The
3-14 board may delegate the authority to waive the prohibition
3-15 established by this subsection.
3-16 Sec. 43.0033. REPORTS OF EXPENDITURES. A consultant,
3-17 advisor, broker, or other person providing services to the State
3-18 Board of Education relating to the management and investment of the
3-19 permanent school fund shall file with the board regularly, as
3-20 determined by the board, a report that describes in detail any
3-21 expenditure of more than $50 made by the person on behalf of:
3-22 (1) a member of the board;
3-23 (2) the commissioner; or
3-24 (3) an employee of the agency or of a nonprofit
3-25 corporation created under Section 43.006.
3-26 Sec. 43.0034. FORMS; PUBLIC INFORMATION. (a) The board
3-27 shall prescribe forms for:
4-1 (1) statements of possible conflicts of interest and
4-2 waivers of possible conflicts of interest under Section 43.0032;
4-3 and
4-4 (2) reports of expenditures under Section 43.0033.
4-5 (b) A statement, waiver, or report described by Subsection
4-6 (a) is public information.
4-7 (c) The board shall designate an employee of the agency to
4-8 act as custodian of statements, waivers, and reports described by
4-9 Subsection (a) for purposes of public disclosure.
4-10 SECTION 2. This Act takes effect September 1, 1999.
4-11 SECTION 3. Not later than January 1, 2000, the State Board
4-12 of Education shall adopt an ethics policy as required by Section
4-13 43.0031, Education Code, as added by this Act, and each form for a
4-14 statement, waiver, or report described by Section 43.0034,
4-15 Education Code, as added by this Act.
4-16 SECTION 4. The importance of this legislation and the
4-17 crowded condition of the calendars in both houses create an
4-18 emergency and an imperative public necessity that the
4-19 constitutional rule requiring bills to be read on three several
4-20 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3739 was passed by the House on May
3, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3739 was passed by the Senate on May
26, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor