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.