By Barrientos                                          S.B. No. 948
         76R7663 T                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to establishment, funding, and administration of the Texas
 1-3     Public Library Fund.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 441, Government Code, is amended by the
 1-6     addition of new Sections 441.135, 441.136, 441.137, and Sec.
 1-7     441.138, and renumbering existing Section 441.135 to Section
 1-8     441.139, and renumbering subsequent sections, in sequence, to read
 1-9     as follows:
1-10           Sec. 441.135.  TEXAS PUBLIC LIBRARY ENDOWMENT.  (a)  The
1-11     Texas public library endowment is a trust fund outside the state
1-12     treasury.
1-13           (b)  The legislature may not appropriate money in the
1-14     endowment.
1-15           (c)  Interest and income earned on or after September 1,
1-16     1999, on money deposited in the endowment shall be deposited to the
1-17     credit of the endowment fund and then transferred by the Texas
1-18     State Library and Archives Commission on September 1 of each year
1-19     to the Public Library Fund.  Although it is not required to do so,
1-20     the commission may elect to return a portion of the interest and
1-21     earnings to the corpus of the endowment fund.
1-22           (d)  This section is exempt from the application of Sections
1-23     403.095, and 404.071.
1-24           Sec. 441.136.  TEXAS PUBLIC LIBRARY FUND.  (a)  The Texas
 2-1     Public Library fund is a special fund in the state treasury.
 2-2           (b)  Money deposited to the credit of the Texas Public
 2-3     Library Fund is hereby appropriated only to carry out the
 2-4     commission's powers and duties concerning public library
 2-5     development under this chapter and for necessary administrative
 2-6     costs incurred by the commission under Sections 441.135, 441.136,
 2-7     441.137, and 441.138.
 2-8           (c)  The fund is exempt from the application of Sections
 2-9     403.095 and 404.071.  Interest and income received from investments
2-10     of money in the Public Library Endowment shall be allocated monthly
2-11     by the comptroller to the Public Library Fund.
2-12           Sec. 441.137.  ENDOWMENT INVESTMENT AND MANAGEMENT.  (a)  The
2-13     commission shall appoint investment managers for the management and
2-14     investment of the Texas Public Library Endowment by contracting for
2-15     professional investment management services with one or more
2-16     organizations that are in the business of managing investments.
2-17           (b)  In choosing and contracting for professional investment
2-18     management services and in continuing the use of an investment
2-19     manager, the commission shall act prudently and in the interest of
2-20     the beneficiaries of the endowment fund.
2-21           (c)  In making and supervising investments of the endowment
2-22     fund, an investment manager and the commission shall discharge
2-23     their respective duties solely in the interest of the beneficiaries
2-24     of the fund:
2-25                 (1)  for the exclusive purposes of providing benefits
2-26     for the beneficiaries of the fund and defraying reasonable expenses
2-27     of administering this chapter;
 3-1                 (2)  with the care, skill, prudence, and diligence
 3-2     under the prevailing circumstances that a prudent person acting in
 3-3     a like capacity and familiar with matters of the type would use in
 3-4     the conduct of an enterprise with a like character and like aims;
 3-5                 (3)  by diversifying the investments of the fund to
 3-6     minimize the risk of large losses, unless under the circumstances
 3-7     it is clearly prudent not to do so; and
 3-8                 (4)  in accordance with the documents and instruments
 3-9     governing the fund to the extent that the documents and instruments
3-10     are consistent with this section.
3-11           (d)  To be eligible for appointment under this section, an
3-12     investment manager must be:
3-13                 (1)  registered under the Investment Advisors Act of
3-14     1940 (15 U.S.C.  Section 80b-1 et seq.);
3-15                 (2)  a bank as defined by that Act that has a trust
3-16     department; or
3-17                 (3)  an insurance company qualified to perform
3-18     investment services under the laws of more than one state.
3-19           (e)  In a contract made under this section, the commission
3-20     shall specify any policies, requirements, or restrictions,
3-21     including criteria for determining the quality of investments and
3-22     for the use of standard rating services, that the commission adopts
3-23     for investments of the endowment.
3-24           (f)  A member of the commission is not liable for the acts or
3-25     omissions of an investment manager appointed under Subsection (a).
3-26     A member of the commission is not permitted or obligated to invest
3-27     or otherwise to manage any asset of the fund subject to management
 4-1     by the investment manager.
 4-2           (g)  An investment manager appointed under Subsection (a)
 4-3     shall acknowledge in writing the manager's fiduciary
 4-4     responsibilities to the endowment.
 4-5           (h)  The commission may at any time and shall frequently
 4-6     monitor the investments made by each investment manager for the
 4-7     endowment. The commission may contract for professional evaluation
 4-8     services to fulfill this requirement.
 4-9           (i)  The commission shall enter into an investment custody
4-10     account agreement designating a bank or a depository trust company
4-11     to serve as custodian for all assets allocated to or generated
4-12     under a contract for professional investment management services.
4-13           (j)  Under a custody account agreement, the commission shall
4-14     require the designated custodian to perform the duties and assume
4-15     the responsibilities for the endowment that are performed and
4-16     assumed, in the absence of a contract, by the custodian of the
4-17     endowment. The custodian shall furnish to the commission, annually
4-18     or more frequently if required by commission rule, a sworn
4-19     statement of the amount of the endowment assets in the custodian's
4-20     custody.
4-21           (k)  For purposes of this section, the beneficiaries of the
4-22     Texas Public Library Fund are the persons who use public libraries,
4-23     public library facilities, and public library collections, and
4-24     public libraries that benefit from the performance of the
4-25     commission's powers and duties under this chapter.
4-26           Sec. 441.138.  DONATIONS; APPROPRIATIONS; SALES REVENUE;
4-27     AUDIT.  (a)  The commission may accept on behalf of the state
 5-1     donations of money, property, and securities as it determines best
 5-2     further the orderly development of public library resources of the
 5-3     state. Money paid to the commission under this Section shall be
 5-4     deposited in the Texas Public Library Fund.
 5-5           (b)  The commission by rule shall establish an acquisition
 5-6     policy for accepting donations of money, property, and securities.
 5-7           (c)  The legislature may make appropriations to the
 5-8     commission to carry out the purposes of this chapter.
 5-9           (d)  The commission may purchase and resell such items as it
5-10     determines appropriate for the promotion of public libraries in
5-11     Texas, provided that the value of inventory, as determined by
5-12     generally accepted accounting principles, shall not exceed $50,000
5-13     at the end of any fiscal year. The net profits from those sales
5-14     shall be deposited in the Texas Public Library Fund.
5-15           (e)  The financial transactions of the commission are subject
5-16     to audit by the state auditor in accordance with Chapter 321,
5-17     Government Code.
5-18           (f)  The commission shall prepare annually a complete and
5-19     detailed written report accounting for all funds received and
5-20     dispersed by the commission during the preceding fiscal year. The
5-21     annual report must meet the reporting requirements applicable to
5-22     financial reporting provided in the General Appropriations Act.
5-23           (g)  All money paid to the commission under this chapter,
5-24     other than money required to be deposited in the Texas Public
5-25     Library Endowment, is subject to Subchapter F, Chapter 404.
5-26           SECTION 2.  Section 441.006, Government Code, is amended by
5-27     the addition of Subparagraphs (16), (17), (18), and (19) to
 6-1     Subsection (a), to read as follows:
 6-2                 (16)  adopt and implement rules governing the
 6-3     allocation of the Texas Public Library Fund to public library
 6-4     facilities construction projects, to procurement of books and other
 6-5     collection development materials, and to actual and reasonable
 6-6     general and administrative costs;
 6-7                 (17)  establish by rule methods by which local
 6-8     governments may compete for matching grants for public library
 6-9     facilities construction projects;
6-10                 (18)  adopt and implement rules for allocation of
6-11     direct grants for books and other collection development materials,
6-12     according to a formula that allocates a base grant to each
6-13     participating Texas public library plus an amount that is
6-14     proportional to the size of the population served; and
6-15                 (19)  adopt and implement rules whereby, in order to
6-16     participate in the Texas Public Library Fund grant program, a
6-17     public library must maintain a level of local public library
6-18     funding equal to or greater than the average of that of the
6-19     previous three years.
6-20           SECTION 3.  This Act takes effect September 1, 1999.
6-21           SECTION 4.  The importance of this legislation and the
6-22     crowded condition of the calendars in both houses create an
6-23     emergency and an imperative public necessity that the
6-24     constitutional rule requiring bills to be read on three several
6-25     days in each house be suspended, and this rule is hereby suspended.