By Duncan S.B. No. 982
77R2253 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to establishing uniform minimum ethics requirements for
1-3 persons involved in the management or investment of state funds.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle F, Title 10, Government Code, is amended
1-6 by adding Chapter 2262 to read as follows:
1-7 CHAPTER 2262. ETHICS REQUIREMENTS FOR MANAGING
1-8 OR INVESTING STATE FUNDS
1-9 Sec. 2262.001. APPLICABILITY; CONSTRUCTION WITH OTHER LAW.
1-10 (a) This chapter applies in connection with the management or
1-11 investment of any state fund managed or invested:
1-12 (1) under the Texas Constitution or other law,
1-13 including Chapters 404 and 2256; and
1-14 (2) by:
1-15 (A) a public retirement system as defined by
1-16 Section 802.001 that provides service retirement, disability
1-17 retirement, or death benefits for officers or employees of the
1-18 state;
1-19 (B) an institution of higher education as
1-20 defined by Section 61.003, Education Code; or
1-21 (C) another entity that is part of state
1-22 government and that manages or invests state funds.
1-23 (b) To the extent of a conflict between this chapter and
1-24 another law, the law that imposes a stricter ethics requirement
2-1 controls.
2-2 Sec. 2262.002. ETHICS REQUIREMENTS. In addition to any
2-3 other requirements provided by law, the governing body of a state
2-4 governmental entity that manages or invests state funds shall
2-5 enforce an ethics policy as provided by this chapter for employees
2-6 of, consultants and advisors to, and brokers who provide financial
2-7 services for the state governmental entity.
2-8 Sec. 2262.003. ETHICS REQUIREMENTS FOR EMPLOYEES: FINANCIAL
2-9 DISCLOSURE STATEMENT. (a) Each employee of a state governmental
2-10 entity who exercises significant decision-making or fiduciary
2-11 authority in connection with the management or investment of state
2-12 funds, as determined by the governing body of the entity, shall
2-13 file a financial disclosure statement with a person designated by
2-14 the governing body.
2-15 (b) The content of the financial disclosure statement must
2-16 substantially comply with the requirements of Subchapter B, Chapter
2-17 572.
2-18 (c) The employee shall file the first financial statement
2-19 not later than the 30th day after the date the person is first
2-20 employed by the state governmental entity in a position in which
2-21 the employee exercises authority as described by Subsection (a),
2-22 and shall file annual statements not later than April 30 of each
2-23 subsequent year in which the employee remains employed in such a
2-24 position. The filing deadline may be postponed:
2-25 (1) by the administrative head of the state
2-26 governmental entity for not more than 60 days on written request;
2-27 and
3-1 (2) for an additional period for good cause as
3-2 determined by:
3-3 (A) the presiding officer of a multimember
3-4 governing body; or
3-5 (B) the single state official who governs the
3-6 state governmental entity.
3-7 (d) The state governmental entity shall maintain a financial
3-8 disclosure statement for at least five years after the date of its
3-9 filing.
3-10 Sec. 2262.004. ETHICS REQUIREMENTS FOR EMPLOYEES: DISCLOSURE
3-11 OF CERTAIN RELATIONSHIPS. (a) An employee of a state governmental
3-12 entity who has a business or commercial relationship that could
3-13 reasonably be expected to diminish the employee's independence of
3-14 judgment in the performance of the employee's responsibilities in
3-15 connection with the management or investment of state funds shall
3-16 disclose the relationship in writing to a person designated by the
3-17 governing body.
3-18 (b) An employee who files a disclosure statement under
3-19 Subsection (a) may not give advice or make decisions about matters
3-20 affected by the conflict of interests unless the governing body,
3-21 after consultation with the general counsel of the state
3-22 governmental entity, expressly waives this prohibition. The state
3-23 governmental entity shall maintain a written record of each waiver
3-24 and the reasons for it.
3-25 (c) The governing body may delegate the authority to waive
3-26 prohibitions under Subsection (b) to one or more designated
3-27 employees or officers. The governing body may adopt criteria for
4-1 designated employees to use to determine the kinds of relationships
4-2 that do not constitute a material conflict of interests for
4-3 purposes of Subsection (b). A multimember governing body may
4-4 delegate this authority only by adopting an order on a vote of a
4-5 majority of its members at an open meeting called and held in
4-6 compliance with Chapter 551, and the governing body shall have the
4-7 order entered into the minutes of the meeting.
4-8 Sec. 2262.005. ETHICS REQUIREMENTS FOR CONSULTANTS AND
4-9 ADVISORS. (a) The governing body by rule shall adopt standards of
4-10 conduct applicable to consultants and advisors who advise the state
4-11 governmental entity in connection with the management or investment
4-12 of state funds and who:
4-13 (1) may reasonably be expected to receive more than
4-14 $10,000 in compensation from the entity during a fiscal year; or
4-15 (2) render important investment or funds management
4-16 advice to the entity, as determined by the governing body.
4-17 (b) A consultant or advisor who advises a state governmental
4-18 entity in connection with the management or investment of state
4-19 funds shall disclose in writing to the administrative head of the
4-20 entity any relationship the consultant or advisor has with any
4-21 party to a transaction with the state governmental entity, other
4-22 than a relationship necessary to the investment or funds management
4-23 services that the consultant or advisor performs for the state
4-24 governmental entity, if the relationship could reasonably be
4-25 expected to diminish the person's independence of judgment in the
4-26 performance of the person's responsibilities to the state
4-27 governmental entity.
5-1 (c) The advisor or consultant shall disclose a relationship
5-2 described by Subsection (b) without regard to whether the
5-3 relationship is a direct, indirect, personal, private, commercial,
5-4 or business relationship.
5-5 Sec. 2262.006. DISCLOSURE OF CERTAIN EXPENDITURES BY
5-6 CONSULTANTS, ADVISORS, AND BROKERS. The governing body by rule
5-7 shall require consultants and advisors who provide investment or
5-8 funds management advice to the state governmental entity and
5-9 brokers who provide financial services to the state governmental
5-10 entity to file regularly with the entity a report detailing any
5-11 expenditure of more than $50 made on behalf of a member of the
5-12 governing body or an employee of the state governmental entity.
5-13 Sec. 2262.007. PUBLIC INFORMATION. (a) Statements,
5-14 waivers, and reports filed under this chapter are public
5-15 information subject to required disclosure in accordance with
5-16 Chapter 552.
5-17 (b) The governing body shall designate an employee to be the
5-18 custodian of the statements, waivers, and reports for purposes of
5-19 public disclosure.
5-20 Sec. 2262.008. FORMS. The governing body shall prescribe
5-21 forms for financial disclosure statements, disclosure statements of
5-22 conflicts of interests, and waivers of the prohibition against
5-23 involvement in a matter affected by a conflict of interests.
5-24 SECTION 2. Each state governmental entity required to adopt
5-25 rules under Chapter 2262, Government Code, as added by this Act,
5-26 shall adopt its initial rules in time for the rules to take effect
5-27 not later than January 1, 2002.
6-1 SECTION 3. This Act takes effect September 1, 2001.