By: Lucio S.B. No. 691
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the financing and administration of a program for
1-2 public library development.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 441, Government Code, is amended by
1-5 adding Subchapter E to read as follows:
1-6 SUBCHAPTER E. PUBLIC LIBRARY ENDOWMENT AND OPERATING FUNDS
1-7 Sec. 441.071. TEXAS PUBLIC LIBRARY ENDOWMENT FUND. (a) The
1-8 Texas public library endowment fund is a trust fund outside the
1-9 state treasury held by a bank or depository trust company and
1-10 administered by the commission for the benefit of the public as
1-11 provided by this section.
1-12 (b) The fund consists of donations accepted by the
1-13 commission under Section 441.074.
1-14 (c) The corpus of the endowment fund may not be spent for
1-15 any purpose.
1-16 (d) Not later than September 1 of each year, the commission
1-17 shall remit all or part of the interest and income earned on money
1-18 in the endowment fund to the comptroller for deposit in the state
1-19 treasury to the credit of the Texas public library fund. The
1-20 commission shall credit to the corpus of the endowment fund any
1-21 portion of the interest and income not credited to the public
1-22 library fund in the treasury.
1-23 Sec. 441.072. INVESTMENT AND MANAGEMENT OF ENDOWMENT FUND.
1-24 (a) The commission shall appoint investment managers for the
2-1 management and investment of the Texas public library endowment
2-2 fund by contracting for professional investment management services
2-3 with one or more organizations that are in the business of managing
2-4 investments.
2-5 (b) In choosing and contracting for professional investment
2-6 management services and in continuing the use of an investment
2-7 manager, the commission shall act prudently and in the interest of
2-8 the beneficiaries of the endowment fund.
2-9 (c) In making and supervising investments of the endowment
2-10 fund, an investment manager and the commission shall discharge
2-11 their respective duties solely in the interest of the beneficiaries
2-12 of the fund:
2-13 (1) for the exclusive purposes of providing benefits
2-14 for the beneficiaries of the fund and defraying reasonable expenses
2-15 of administering this chapter;
2-16 (2) with the care, skill, prudence, and diligence
2-17 under the prevailing circumstances that a prudent person acting in
2-18 a similar capacity and familiar with matters of the type would use
2-19 in the conduct of an enterprise with a similar character and aims;
2-20 (3) by diversifying the investments of the fund to
2-21 minimize the risk of large losses, unless under the circumstances
2-22 it is clearly prudent not to do so; and
2-23 (4) in accordance with the documents and instruments
2-24 governing the fund to the extent that the documents and instruments
2-25 are consistent with this section.
2-26 (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
3-19 (a) 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
4-1 to serve as custodian for all assets allocated to or generated
4-2 under a contract for professional investment management services.
4-3 (j) Under a custody account agreement, the commission shall
4-4 require the designated custodian to perform the duties and assume
4-5 the responsibilities for the endowment fund that are performed and
4-6 assumed, in the absence of a contract, by the custodian of the
4-7 endowment fund. The custodian shall furnish to the commission,
4-8 annually or more frequently if required by commission rule, a sworn
4-9 statement of the amount of the endowment fund assets in the
4-10 custodian's custody.
4-11 (k) For purposes of this section, the beneficiaries of the
4-12 Texas public library endowment fund are the persons who use public
4-13 libraries, public library facilities, and public library
4-14 collections and the public libraries that benefit from the
4-15 performance of the commission's powers and duties under this
4-16 chapter.
4-17 Sec. 441.073. TEXAS PUBLIC LIBRARY FUND. (a) The Texas
4-18 public library fund is a special fund in the state treasury outside
4-19 the general revenue fund.
4-20 (b) The public library fund consists of money credited to
4-21 the fund under Section 441.071(d) and proceeds from sales under
4-22 Section 441.074(d).
4-23 (c) Money in the public library fund may be appropriated
4-24 only to the commission to perform the commission's powers and
4-25 duties concerning public library development under this chapter and
4-26 to pay the commission's expenses incurred under this subchapter.
5-1 (d) The public library fund is exempt from the application
5-2 of Sections 403.095 and 404.071. Interest and income from deposit
5-3 and investment of money in the fund shall be allocated to the fund
5-4 monthly.
5-5 Sec. 441.074. DONATIONS, APPROPRIATIONS, AND SALES.
5-6 (a) The commission may solicit and accept on behalf of the state
5-7 donations of money, securities, and other property as it determines
5-8 best further the orderly development of public library resources of
5-9 the state. Money paid to the commission under this subsection
5-10 shall be deposited in the Texas public library endowment fund.
5-11 (b) The commission by rule shall establish an acquisition
5-12 policy for accepting donations of money, securities, and other
5-13 property.
5-14 (c) The legislature may make appropriations to the
5-15 commission to carry out the purposes of this chapter.
5-16 (d) The commission may purchase and resell items it
5-17 determines appropriate for the promotion of public libraries in
5-18 Texas. The value of commission inventory, as determined by
5-19 generally accepted accounting principles, may not exceed $50,000 at
5-20 the end of any fiscal year. The net profits from those sales shall
5-21 be deposited in the Texas public library fund.
5-22 Sec. 441.075. PUBLIC LIBRARY FUND GRANT PROGRAM. (a) The
5-23 commission shall make grants to public libraries from the Texas
5-24 public library fund for facility construction projects, acquisition
5-25 of books and other collection development materials, and payment of
5-26 actual and reasonable general and administrative expenses. The
6-1 commission shall allocate amounts from the fund to direct and
6-2 matching grant programs.
6-3 (b) The commission shall adopt rules:
6-4 (1) establishing methods for participation by local
6-5 governments in a matching grant program for facility construction
6-6 projects; and
6-7 (2) providing allocations for a direct grant program
6-8 for acquisition of books and other collection development materials
6-9 according to a formula that allocates a base grant to each
6-10 participating public library plus an amount that is proportional to
6-11 the size of the population served.
6-12 (c) To participate in a grant program under this section, a
6-13 public library must maintain a level of local public library
6-14 funding equal to or greater than the average funding for the three
6-15 years preceding participation. The commission shall adopt rules to
6-16 implement this requirement.
6-17 SECTION 2. Subsection (b), Section 404.093, Government Code,
6-18 is amended to read as follows:
6-19 (b) This subchapter does not apply to:
6-20 (1) funds pledged to the payment of bonds, notes, or
6-21 other debts if the funds are not otherwise required to be deposited
6-22 in the treasury;
6-23 (2) funds held in trust or escrow for the benefit of a
6-24 person or entity other than a state agency;
6-25 (3) funds set apart out of earnings derived from
6-26 investment of funds held in trust for others, as administrative
7-1 expenses of the trustee agency;
7-2 (4) funds, grants, donations, and proceeds from funds,
7-3 grants, and donations, given in trust to the Texas State Library
7-4 and Archives Commission for the establishment and maintenance of
7-5 regional historical resource depositories and libraries in
7-6 accordance with Section 441.154 [441.074]; or
7-7 (5) funds under the management of the
7-8 secretary-treasurer of the Anatomical Board of the State of Texas,
7-9 as provided by Section 691.008, Health and Safety Code.
7-10 SECTION 3. This Act takes effect September 1, 1999.
7-11 SECTION 4. The importance of this legislation and the
7-12 crowded condition of the calendars in both houses create an
7-13 emergency and an imperative public necessity that the
7-14 constitutional rule requiring bills to be read on three several
7-15 days in each house be suspended, and this rule is hereby suspended.