1-1 By: Lucio S.B. No. 691
1-2 (In the Senate - Filed February 24, 1999; March 1, 1999, read
1-3 first time and referred to Committee on Education; April 6, 1999,
1-4 reported favorably by the following vote: Yeas 8, Nays 0;
1-5 April 6, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the financing and administration of a program for
1-9 public library development.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Chapter 441, Government Code, is amended by
1-12 adding Subchapter E to read as follows:
1-13 SUBCHAPTER E. PUBLIC LIBRARY ENDOWMENT AND OPERATING FUNDS
1-14 Sec. 441.071. TEXAS PUBLIC LIBRARY ENDOWMENT FUND. (a) The
1-15 Texas public library endowment fund is a trust fund outside the
1-16 state treasury held by a bank or depository trust company and
1-17 administered by the commission for the benefit of the public as
1-18 provided by this section.
1-19 (b) The fund consists of donations accepted by the
1-20 commission under Section 441.074.
1-21 (c) The corpus of the endowment fund may not be spent for
1-22 any purpose.
1-23 (d) Not later than September 1 of each year, the commission
1-24 shall remit all or part of the interest and income earned on money
1-25 in the endowment fund to the comptroller for deposit in the state
1-26 treasury to the credit of the Texas public library fund. The
1-27 commission shall credit to the corpus of the endowment fund any
1-28 portion of the interest and income not credited to the public
1-29 library fund in the treasury.
1-30 Sec. 441.072. INVESTMENT AND MANAGEMENT OF ENDOWMENT FUND.
1-31 (a) The commission shall appoint investment managers for the
1-32 management and investment of the Texas public library endowment
1-33 fund by contracting for professional investment management services
1-34 with one or more organizations that are in the business of managing
1-35 investments.
1-36 (b) In choosing and contracting for professional investment
1-37 management services and in continuing the use of an investment
1-38 manager, the commission shall act prudently and in the interest of
1-39 the beneficiaries of the endowment fund.
1-40 (c) In making and supervising investments of the endowment
1-41 fund, an investment manager and the commission shall discharge
1-42 their respective duties solely in the interest of the beneficiaries
1-43 of the fund:
1-44 (1) for the exclusive purposes of providing benefits
1-45 for the beneficiaries of the fund and defraying reasonable expenses
1-46 of administering this chapter;
1-47 (2) with the care, skill, prudence, and diligence
1-48 under the prevailing circumstances that a prudent person acting in
1-49 a similar capacity and familiar with matters of the type would use
1-50 in the conduct of an enterprise with a similar character and aims;
1-51 (3) by diversifying the investments of the fund to
1-52 minimize the risk of large losses, unless under the circumstances
1-53 it is clearly prudent not to do so; and
1-54 (4) in accordance with the documents and instruments
1-55 governing the fund to the extent that the documents and instruments
1-56 are consistent with this section.
1-57 (d) To be eligible for appointment under this section, an
1-58 investment manager must be:
1-59 (1) registered under the Investment Advisers Act of
1-60 1940 (15 U.S.C. Section 80b-1 et seq.), as amended;
1-61 (2) a bank as defined by that Act that has a trust
1-62 department; or
1-63 (3) an insurance company qualified to perform
1-64 investment services under the laws of more than one state.
2-1 (e) In a contract made under this section, the commission
2-2 shall specify any policies, requirements, or restrictions,
2-3 including criteria for determining the quality of investments and
2-4 for the use of standard rating services, that the commission
2-5 adopts for investments of the endowment fund.
2-6 (f) A member of the commission is not liable for the acts or
2-7 omissions of an investment manager appointed under Subsection (a).
2-8 A member of the commission is not permitted or obligated to invest
2-9 or otherwise to manage any asset of the fund subject to management
2-10 by the investment manager.
2-11 (g) An investment manager appointed under Subsection
2-12 (a) shall acknowledge in writing the manager's fiduciary
2-13 responsibilities to the endowment fund.
2-14 (h) The commission may at any time and shall frequently
2-15 monitor the investments made by each investment manager for the
2-16 endowment fund. The commission may contract for professional
2-17 evaluation services to fulfill this requirement.
2-18 (i) The commission shall enter into an investment custody
2-19 account agreement designating a bank or a depository trust company
2-20 to serve as custodian for all assets allocated to or generated
2-21 under a contract for professional investment management services.
2-22 (j) Under a custody account agreement, the commission shall
2-23 require the designated custodian to perform the duties and assume
2-24 the responsibilities for the endowment fund that are performed and
2-25 assumed, in the absence of a contract, by the custodian of the
2-26 endowment fund. The custodian shall furnish to the commission,
2-27 annually or more frequently if required by commission rule, a sworn
2-28 statement of the amount of the endowment fund assets in the
2-29 custodian's custody.
2-30 (k) For purposes of this section, the beneficiaries of the
2-31 Texas public library endowment fund are the persons who use public
2-32 libraries, public library facilities, and public library
2-33 collections and the public libraries that benefit from the
2-34 performance of the commission's powers and duties under this
2-35 chapter.
2-36 Sec. 441.073. TEXAS PUBLIC LIBRARY FUND. (a) The Texas
2-37 public library fund is a special fund in the state treasury outside
2-38 the general revenue fund.
2-39 (b) The public library fund consists of money credited to
2-40 the fund under Section 441.071(d) and proceeds from sales under
2-41 Section 441.074(d).
2-42 (c) Money in the public library fund may be appropriated
2-43 only to the commission to perform the commission's powers and
2-44 duties concerning public library development under this chapter and
2-45 to pay the commission's expenses incurred under this subchapter.
2-46 (d) The public library fund is exempt from the application
2-47 of Sections 403.095 and 404.071. Interest and income from deposit
2-48 and investment of money in the fund shall be allocated to the fund
2-49 monthly.
2-50 Sec. 441.074. DONATIONS, APPROPRIATIONS, AND SALES.
2-51 (a) The commission may solicit and accept on behalf of the state
2-52 donations of money, securities, and other property as it determines
2-53 best further the orderly development of public library resources of
2-54 the state. Money paid to the commission under this subsection
2-55 shall be deposited in the Texas public library endowment fund.
2-56 (b) The commission by rule shall establish an acquisition
2-57 policy for accepting donations of money, securities, and other
2-58 property.
2-59 (c) The legislature may make appropriations to the
2-60 commission to carry out the purposes of this chapter.
2-61 (d) The commission may purchase and resell items it
2-62 determines appropriate for the promotion of public libraries in
2-63 Texas. The value of commission inventory, as determined by
2-64 generally accepted accounting principles, may not exceed $50,000 at
2-65 the end of any fiscal year. The net profits from those sales shall
2-66 be deposited in the Texas public library fund.
2-67 Sec. 441.075. PUBLIC LIBRARY FUND GRANT PROGRAM. (a) The
2-68 commission shall make grants to public libraries from the Texas
2-69 public library fund for facility construction projects, acquisition
3-1 of books and other collection development materials, and payment of
3-2 actual and reasonable general and administrative expenses. The
3-3 commission shall allocate amounts from the fund to direct and
3-4 matching grant programs.
3-5 (b) The commission shall adopt rules:
3-6 (1) establishing methods for participation by local
3-7 governments in a matching grant program for facility construction
3-8 projects; and
3-9 (2) providing allocations for a direct grant program
3-10 for acquisition of books and other collection development materials
3-11 according to a formula that allocates a base grant to each
3-12 participating public library plus an amount that is proportional to
3-13 the size of the population served.
3-14 (c) To participate in a grant program under this section, a
3-15 public library must maintain a level of local public library
3-16 funding equal to or greater than the average funding for the three
3-17 years preceding participation. The commission shall adopt rules to
3-18 implement this requirement.
3-19 SECTION 2. Subsection (b), Section 404.093, Government Code,
3-20 is amended to read as follows:
3-21 (b) This subchapter does not apply to:
3-22 (1) funds pledged to the payment of bonds, notes, or
3-23 other debts if the funds are not otherwise required to be deposited
3-24 in the treasury;
3-25 (2) funds held in trust or escrow for the benefit of a
3-26 person or entity other than a state agency;
3-27 (3) funds set apart out of earnings derived from
3-28 investment of funds held in trust for others, as administrative
3-29 expenses of the trustee agency;
3-30 (4) funds, grants, donations, and proceeds from funds,
3-31 grants, and donations, given in trust to the Texas State Library
3-32 and Archives Commission for the establishment and maintenance of
3-33 regional historical resource depositories and libraries in
3-34 accordance with Section 441.154 [441.074]; or
3-35 (5) funds under the management of the
3-36 secretary-treasurer of the Anatomical Board of the State of Texas,
3-37 as provided by Section 691.008, Health and Safety Code.
3-38 SECTION 3. This Act takes effect September 1, 1999.
3-39 SECTION 4. The importance of this legislation and the
3-40 crowded condition of the calendars in both houses create an
3-41 emergency and an imperative public necessity that the
3-42 constitutional rule requiring bills to be read on three several
3-43 days in each house be suspended, and this rule is hereby suspended.
3-44 * * * * *