SRC-JLB C.S.S.B. 650 78(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 650
78R9601 JJT-FBy: Shapleigh
Government Organization
3/21/2003
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, state investments of public funds are managed by state agencies
in concert with national investment brokerage firms.  The Freedom of
Information Act (FOIA) requires that governmental agencies disclose their
records to any person requesting them, barring those records containing
information specifically exempted by one of the statutory exemptions.
However, in regards to private investment of public funds, agencies have
bypassed FOIA requests to disclose information regarding private
investments.  This lack of disclosure does not allow for a comparison
among other Texas and national funds and the potential for better fund
management of state dollars.  Expanding existing disclosure policy would
make it easier for the public to discern how much money the state
investment funds pay in commissions and fees.  C.S.S.B. 650 requires state
investment funds to require the posting of all investment funds
administered by or under a contract with any entity of state government on
the Internet, except for the Texas Workers Compensation Insurance Fund and
requires companies retained by and used by the agencies, in relation to
the investment of the funds, to disclose the race, ethnicity, and gender
of the controlling ownership of each business and their principal place of
business.  The bill does not affect the Public Funds Investment Act, which
regulates what can and cannot be bought. C.S.S.B 650 requires corporations
or other entities with whom the board of regents of The University of
Texas System contracts to follow certain guidelines but does not require
the disclosure of certain information.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency.  

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 2054F, Government Code, by adding Section
2054.114, as follows: 
 
Sec. 2054.114.  REQUIRED POSTING OF STATE INVESTMENT FUND INFORMATION ON
INTERNET.  (a)  Redefines "state investment fund." 

(b)  Requires the entity of state government responsible for administering
a state investment fund to, on or before the sixtieth day of each calendar
quarter, post a report containing the information specified by Subsection
(c) for the previous calendar quarter on a generally accessible Internet
site maintained by or for certain entities. 

  (c)  Requires the report to state certain information.

(d)  Provides that this section does not apply to the Texas Workers'
Compensation Insurance Fund created under Article 5.76-3, Insurance Code. 

SECTION 2.  Amends Section 66.08, Education Code, by adding Subsection
(p), to require the corporation or any other entity with whom the board of
regents of The University of Texas System contracts for the investment of
the permanent university fund or other funds under the management and
control of the board to require any person with whom the corporation or
other investing entity enters into any agreement, including a limited
partnership or joint venture agreement, of investment of a portion of
those funds to disclose to the board the annual performance of all
investments, joint ventures, partnerships or limited partnerships, or
other business activities that the person managed or participated in
managing for the preceding five years.  Requires the disclosure to include
a general description of the nature of each of those investments or other
activities.  Requires the person to make the disclosure before the
corporation or other investing entity may enter into an agreement with the
person to invest any funds, and the board to make the information
available to the public in the manner provided by Chapter 552, Government
Code, for other public information.  Provides that this subsection does
not require the disclosure of information regarding the internal
operations of the person or of any investment or other activity managed by
the person, or of the name or identity of any other person participating
in an investment or other activity for which disclosure is required.   
 
SECTION 3.  Effective date:  upon passage or September 1, 2003.


SUMMARY OF COMMITTEE CHANGES

SECTION 1.  Differs from original in proposed Section 2054.114(a), Chapter
2054F, Government Code, by redefining "state investment fund" and by
amending text in Section 2054.114(b) stating "on or before the first day"
to "on or before the sixtieth day." 

SECTION 2.  Differs from original by renumbering the original SECTION 2 as
SECTION 3 and adding a new SECTION 2 which proposes Section 66.08(p),
Education Code.