By:  Shapleigh                                                    S.B. No. 650
	(In the Senate - Filed February 21, 2003; February 27, 2003, 
read first time and referred to Committee on Government 
Organization; March 24, 2003, reported adversely, with favorable 
Committee Substitute by the following vote:  Yeas 6, Nays 0; 
March 24, 2003, sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 650                                    By:  Armbrister


A BILL TO BE ENTITLED

AN ACT


relating to requiring the disclosure of certain information by 
state investment funds, including requiring state investment funds 
to post certain information on the Internet.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter F, Chapter 2054, Government Code, is 
amended by adding Section 2054.114 to read as follows:
	Sec. 2054.114.  REQUIRED POSTING OF STATE INVESTMENT FUND 
INFORMATION ON INTERNET.  (a)  In this section, "state investment 
fund" means any investment fund that is investing public funds and 
that is administered by or under a contract with any entity of state 
government, including a fund:
		(1)  established by statute or by the Texas 
Constitution; or         
		(2)  administered by or under a contract with:                         
			(A)  a public retirement system, as defined by 
Section 802.001, that provides service retirement, disability 
retirement, or death benefits for officers or employees of the 
state;
			(B)  an institution of higher education, as 
defined by Section 61.003, Education Code; or
			(C)  any other entity that is part of state 
government.             
	(b)  The entity of state government responsible for 
administering a state investment fund shall, on or before the 60th 
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:
		(1)  the fund; or                                                      
		(2)  the state governmental entity, if a generally 
accessible Internet site is not maintained by or for the fund.
	(c)  The report must state:                                             
		(1)  all purchases and sales by or for the fund of 
domestic equity securities and bonds in the following summary form:
			(A)  company name;                                                    
			(B)  total amount of shares traded;                                   
			(C)  total commissions paid; and                                      
			(D)  the ratio of the amount of the commissions to 
the number of shares;
		(2)  the fund's investment managers, investment 
custodians, investment performance measurement consultants, 
securities lending agents, and any other ancillary consultants in 
the following summary form:
			(A)  company name;                                                    
			(B)  average fund assets under management;                            
			(C)  fees paid by the fund; and                                       
			(D)  average basis points that fees paid by the 
fund represent in relation to the average assets of the fund under 
management; and
		(3)  the dollar amounts of fees, commissions, and other 
amounts paid in connection with the administration of the fund, as 
described under Subdivisions (1) and (2), to businesses, 
categorized according to:
			(A)  the race, ethnicity, and gender of the 
controlling ownership of each business;
			(B)  the principal place of business of each 
business; and          
			(C)  the status of each business as a historically 
underutilized business.
	(d)  This section does not apply to the Texas Mutual 
Insurance Company created under Article 5.76-3, Insurance Code.
	SECTION 2.  Section 66.08, Education Code, is amended by 
adding Subsection (p) to read as follows:
	(p)  The corporation or any other entity with whom the board 
contracts for the investment of the permanent university fund or 
other funds under the management and control of the board must 
require any person with whom the corporation or other investing 
entity enters into any agreement, including a limited partnership 
or joint venture agreement, for 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.  The 
disclosure must include a general description of the nature of each 
of those investments or other activities.  The person must 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 shall make the information available to the public in the 
manner provided by Chapter 552, Government Code, for other public 
information.  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.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.



* * * * *