Texas 2019 - 86th Regular

Texas Senate Bill SB2440 Compare Versions

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1	1	By: Taylor S.B. No. 2440
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the Texas school finance system, including the creation
7	7	of the bicentennial education fund, the establishment of the Texas
8	8	Education Investment Management Organization, and the management
9	9	and investment of the permanent school fund.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 31.021(a), Education Code, as amended by
12	12	Acts 2017, 85th Leg., R.S., Ch. 705 (H.B. 3526), is amended to read
13	13	as follows:
14	14	(a) The state technology and instructional materials fund
15	15	consists of:
16	16	(1) an amount set aside by the Texas Education
17	17	Investment Management Organization State Board of Education from
18	18	the available school fund, in accordance with Section 43.001(d);
19	19	and
20	20	(2) all amounts lawfully paid into the fund from any
21	21	other source.
22	22	SECTION 2. Section 31.021(a), Education Code, as amended by
23	23	Acts 2017, 85th Leg., R.S., Ch. 581 (S.B. 810), is amended to read
24	24	as follows:
25	25	(a) The state instructional materials and technology fund
26	26	consists of:
27	27	(1) an amount set aside by the Texas Education
28	28	Investment Management Organization State Board of Education from
29	29	the available school fund, in accordance with Section 43.001(d);
30	30	and
31	31	(2) all amounts lawfully paid into the fund from any
32	32	other source.
33	33	SECTION 3. The heading to Section 43.001, Education Code,
34	34	is amended to read as follows:
35	35	Sec. 43.001. COMPOSITION OF PERMANENT SCHOOL FUND, AND
36	36	AVAILABLE SCHOOL FUND, AND BICENTENNIAL EDUCATION FUND.
37	37	SECTION 4. Section 43.001, Education Code, is amended by
38	38	adding Subsection (b-1) and amending Subsection (d) to read as
39	39	follows:
40	40	(b-1) The bicentennial education fund, which shall be
41	41	dedicated to providing funding for merit-based teacher pay and
42	42	incentivizing academic improvement among historically
43	43	underperforming student groups, consists of:
44	44	(1) the distributions to the fund from the permanent
45	45	school fund as provided by Section 5(a-2), Article VII, Texas
46	46	Constitution; and
47	47	(2) all other appropriations to the bicentennial
48	48	education fund made by the legislature for public school purposes.
49	49	(d) Each biennium the Texas Education Investment Management
50	50	Organization State Board of Education shall allocate a portion set
51	51	aside an amount equal to 50 percent of the distribution for that
52	52	biennium from the permanent school fund to the available school
53	53	fund as provided by Section 5(a), Article VII, Texas Constitution,
54	54	to be placed, subject to the General Appropriations Act, in the
55	55	state instructional materials and technology fund established
56	56	under Section 31.021.
57	57	SECTION 5. Chapter 43, Education Code, is amended by adding
58	58	Section 43.0011 to read as follows:
59	59	Sec. 43.0011. PURPOSE OF PERMANENT SCHOOL FUND. The
60	60	purpose of the permanent school fund is to maximize available
61	61	revenue distributions for the education of students enrolled in the
62	62	public education system.
63	63	SECTION 6. Chapter 43, Education Code, is amended by adding
64	64	Section 43.0021 to read as follows:
65	65	Sec. 43.0021. TEXAS EDUCATION INVESTMENT MANAGEMENT
66	66	ORGANIZATION. (a) The Texas Education Investment Management
67	67	Organization is composed of nine members appointed by the governor,
68	68	five of whom must have a substantial background and expertise in
69	69	investments. The Governor shall appoint one member State Board of
70	70	Education as one of the members of the organization. The Governor
71	71	shall appoint one member of the School Land Board as one of the
72	72	members of the organization.
73	73	(b) Appointments to the board shall be made without regard
74	74	to race, color, disability, sex, religion, age, or national origin.
75	75	(c) Members of the board serve staggered six-year terms,
76	76	with the terms of as near to one-third of the members as possible
77	77	expiring on January 31 of each odd-numbered year.
78	78	(d) The governor shall designate a member of the board as
79	79	presiding officer to serve in that capacity at the pleasure of the
80	80	governor.
81	81	SECTION 7. Sections 43.003 through 43.0051, Education Code,
82	82	are amended to read as follows:
83	83	Sec. 43.003. INVESTMENT OF PERMANENT SCHOOL FUND. In
84	84	compliance with this section, the Texas Education Investment
85	85	Management Organization State Board of Education may invest the
86	86	permanent school fund in the types of securities, which must be
87	87	carefully examined by the organization State Board of Education and
88	88	be found to be safe and proper investments for the fund as specified
89	89	below:
90	90	(1) securities, bonds, or other obligations issued,
91	91	insured, or guaranteed in any manner by the United States
92	92	Government or any of its agencies and in bonds issued by this state;
93	93	(2) obligations and pledges of The University of
94	94	Texas;
95	95	(3) corporate bonds, debentures, or obligations of
96	96	United States corporations of at least "A" rating;
97	97	(4) obligations of United States corporations that
98	98	mature in less than one year and are of the highest rating available
99	99	at the time of investment;
100	100	(5) bonds issued, assumed, or guaranteed by the
101	101	Inter-American Development Bank, the International Bank of
102	102	Reconstruction and Development (the World Bank), the African
103	103	Development Bank, the Asian Development Bank, and the International
104	104	Finance Corporation;
105	105	(6) bonds of counties, school districts,
106	106	municipalities, road precincts, drainage, irrigation, navigation,
107	107	and levee districts in this state, subject to the following
108	108	requirements:
109	109	(A) the securities, before purchase, must have
110	110	been diligently investigated by the attorney general both as to
111	111	form and as to legal compliance with applicable laws;
112	112	(B) the attorney general's certificate of
113	113	validity procured by the party offering the bonds, obligations, or
114	114	pledges must accompany the securities when they are submitted for
115	115	registration to the comptroller, who must preserve the
116	116	certificates;
117	117	(C) the public securities, if purchased, and when
118	118	certified and registered as specified under Paragraph (B), are
119	119	incontestable unless issued fraudulently or in violation of a
120	120	constitutional limitation, and the certificates of the attorney
121	121	general are prima facie evidence of the validity of the bonds and
122	122	bond coupons; and
123	123	(D) after the issuing political subdivision has
124	124	received the proceeds from the sales of the securities, the issuing
125	125	agency is estopped to deny their validity, and the securities are
126	126	valid and binding obligations;
127	127	(7) preferred stocks and common stocks that the
128	128	organization State Board of Education considers proper investments
129	129	for the permanent school fund, subject to the following
130	130	requirements:
131	131	(A) in making all of those investments, the
132	132	organization State Board of Education shall exercise the judgment
133	133	and care under the circumstances then prevailing that persons of
134	134	ordinary prudence, discretion, and intelligence exercise in the
135	135	management of their own affairs, not in regard to speculation but in
136	136	regard to the permanent disposition of their funds, considering the
137	137	probable income as well as the probable safety of their capital;
138	138	(B) the company issuing the stock must be
139	139	incorporated in the United States, and the stocks must have paid
140	140	dividends for five consecutive years or longer immediately before
141	141	the date of purchase and the stocks, except for bank stocks and
142	142	insurance stocks, must be listed on an exchange registered with the
143	143	Securities and Exchange Commission or its successors; and
144	144	(C) not more than one percent of the permanent
145	145	school fund may be invested in stock issued by one corporation and
146	146	not more than five percent of the voting stock of any one
147	147	corporation will be owned; and
148	148	(8) notwithstanding any other law or provision of this
149	149	code, first lien real estate mortgage securities insured by the
150	150	Federal Housing Administration under the National Housing Act of
151	151	the United States, or in any other first lien real estate mortgage
152	152	securities guaranteed in whole or in part by the United States.
153	153	Sec. 43.0031. PERMANENT SCHOOL FUND ETHICS POLICY. (a) In
154	154	addition to any other requirements provided by law, the Texas
155	155	Education Investment Management Organization State Board of
156	156	Education shall adopt and enforce an ethics policy that provides
157	157	standards of conduct relating to the management and investment of
158	158	the permanent school fund. The ethics policy must include
159	159	provisions that address the following issues as they apply to the
160	160	management and investment of the permanent school fund and to
161	161	persons responsible for managing and investing the fund:
162	162	(1) general ethical standards;
163	163	(2) conflicts of interest;
164	164	(3) prohibited transactions and interests;
165	165	(4) the acceptance of gifts and entertainment;
166	166	(5) compliance with applicable professional
167	167	standards;
168	168	(6) ethics training; and
169	169	(7) compliance with and enforcement of the ethics
170	170	policy.
171	171	(b) The ethics policy must include provisions applicable
172	172	to:
173	173	(1) members of the Texas Education Investment
174	174	Management Organization State Board of Education;
175	175	(2) the commissioner;
176	176	(3) employees of the agency; and
177	177	(4) any person who provides services to the
178	178	organization board relating to the management or investment of the
179	179	permanent school fund.
180	180	(c) Not later than the 45th day before the date on which the
181	181	organization board intends to adopt a proposed ethics policy or an
182	182	amendment to or revision of an adopted ethics policy, the
183	183	organization board shall submit a copy of the proposed policy,
184	184	amendment, or revision to the Texas Ethics Commission and the state
185	185	auditor for review and comments. The organization board shall
186	186	consider any comments from the commission or state auditor before
187	187	adopting the proposed policy.
188	188	(d) The provisions of the ethics policy that apply to a
189	189	person who provides services to the organization board relating to
190	190	the management or investment of the permanent school fund must be
191	191	based on the Code of Ethics and the Standards of Professional
192	192	Conduct prescribed by the Association for Investment Management and
193	193	Research or other ethics standards adopted by another appropriate
194	194	professionally recognized entity.
195	195	(e) The organization board shall ensure that applicable
196	196	provisions of the ethics policy are included in any contract under
197	197	which a person provides services to the organization board relating
198	198	to the management and investment of the permanent school fund.
199	199	Sec. 43.0032. CONFLICTS OF INTEREST. (a) A member of the
200	200	Texas Education Investment Management Organization State Board of
201	201	Education, the commissioner, an employee of the agency, or a person
202	202	who provides services to the organization board that relate to the
203	203	management or investment of the permanent school fund who has a
204	204	business, commercial, or other relationship that could reasonably
205	205	be expected to diminish the person's independence of judgment in
206	206	the performance of the person's responsibilities relating to the
207	207	management or investment of the fund shall disclose the
208	208	relationship in writing to the organization board.
209	209	(b) The organization board or the organization's board's
210	210	designee shall, in the ethics policy adopted under Section 43.0031,
211	211	define the kinds of relationships that may create a possible
212	212	conflict of interest.
213	213	(c) A person who files a statement under Subsection (a)
214	214	disclosing a possible conflict of interest may not give advice or
215	215	make decisions about a matter affected by the possible conflict of
216	216	interest unless the organization board, after consultation with the
217	217	general counsel of the agency, expressly waives this prohibition.
218	218	The organization board may delegate the authority to waive the
219	219	prohibition established by this subsection.
220	220	Sec. 43.0033. REPORTS OF EXPENDITURES. A consultant,
221	221	advisor, broker, or other person providing services to the Texas
222	222	Education Investment Management Organization State Board of
223	223	Education relating to the management and investment of the
224	224	permanent school fund shall file with the organization board
225	225	regularly, as determined by the organization board, a report that
226	226	describes in detail any expenditure of more than $50 made by the
227	227	person on behalf of:
228	228	(1) a member of the organization board; or
229	229	(2) the commissioner; or
230	230	(3) an employee of the agency or of a nonprofit
231	231	corporation created under Section 43.006.
232	232	Sec. 43.0034. FORMS; PUBLIC INFORMATION. (a) The
233	233	organization board shall prescribe forms for:
234	234	(1) statements of possible conflicts of interest and
235	235	waivers of possible conflicts of interest under Section 43.0032;
236	236	and
237	237	(2) reports of expenditures under Section 43.0033.
238	238	(b) A statement, waiver, or report described by Subsection
239	239	(a) is public information.
240	240	(c) The organization board shall designate an employee of
241	241	the agency to act as custodian of statements, waivers, and reports
242	242	described by Subsection (a) for purposes of public disclosure.
243	243	Sec. 43.004. WRITTEN INVESTMENT OBJECTIVES; PERFORMANCE
244	244	EVALUATION. (a) The Texas Education Investment Management
245	245	Organization State Board of Education shall develop written
246	246	investment objectives concerning the investment of the permanent
247	247	school fund. The objectives may address desired rates of return,
248	248	risks involved, investment time frames, and any other relevant
249	249	considerations.
250	250	(b) The organization board shall employ a well-recognized
251	251	performance measurement service to evaluate and analyze the
252	252	investment results of the permanent school fund. The service shall
253	253	compare investment results with the written investment objectives
254	254	developed by the organization board, and shall also compare the
255	255	investment of the permanent school fund with the investment of
256	256	other public and private funds.
257	257	Sec. 43.005. EXTERNAL INVESTMENT MANAGERS. (a) The Texas
258	258	Education Investment Management Organization State Board of
259	259	Education may contract with private professional investment
260	260	managers to assist the board in making investments of the permanent
261	261	school fund. A contract under this subsection must be approved by
262	262	the organization board or otherwise entered into in accordance with
263	263	board rules relating to contracting authority.
264	264	(b) The Texas Education Investment Management Organization
265	265	State Board of Education by rule may delegate a power or duty
266	266	relating to the investment of the permanent school fund to a
267	267	committee, officer, employee, or other agent of the organization
268	268	board.
269	269	Sec. 43.0051. TRANSFERS TO REAL ESTATE SPECIAL FUND ACCOUNT
270	270	OF THE PERMANENT SCHOOL FUND. The Texas Education Investment
271	271	Management Organization State Board of Education may transfer funds
272	272	from the portion of the permanent school fund managed by the
273	273	organization State Board of Education to the real estate special
274	274	fund account of the permanent school fund if the organization State
275	275	Board of Education determines, using the standard of care set forth
276	276	in Subsection (f), Section 5, Article VII, Texas Constitution, that
277	277	such transfer is in the best interest of the permanent school fund.
278	278	SECTION 8. Sections 43.007 through 43.012, Education Code,
279	279	are amended to read as follows:
280	280	Sec. 43.007. PURCHASE AND SALE OR EXCHANGE OF SECURITIES.
281	281	(a) The Texas Education Investment Management Organization State
282	282	Board of Education may authorize the purchase of all of the types of
283	283	securities in which it is authorized by law to invest the permanent
284	284	school fund in either registered or negotiable form. The
285	285	organization board may authorize the reissue of those securities
286	286	held at any time for the account of the permanent school fund in
287	287	either registered or negotiable form. The organization State Board
288	288	of Education may authorize the sale of any of the securities held
289	289	for the account of the permanent school fund and reinvest the
290	290	proceeds of sale for the fund and may authorize the exchange of any
291	291	of the securities held for the account of the permanent school fund.
292	292	(b) In making purchases, sales, exchanges, and reissues,
293	293	the organization State Board of Education shall exercise the
294	294	judgment and care under the circumstances then prevailing that
295	295	persons of ordinary prudence, discretion, and intelligence
296	296	exercise in the management of their own affairs not in regard to
297	297	speculation but in regard to the permanent disposition of their
298	298	funds, considering the probable income as well as the probable
299	299	safety of their capital.
300	300	(c) When any securities are sold, reissued, or exchanged as
301	301	provided by Subsection (a), the custodian of the securities shall
302	302	deliver the securities sold, reissued, or exchanged in accordance
303	303	with the directions of the organization State Board of Education.
304	304	Sec. 43.009. PREPAYMENT OF CERTAIN BONDS HELD BY THE
305	305	PERMANENT SCHOOL FUND. (a) The Texas Education Investment
306	306	Management Organization State Board of Education may authorize the
307	307	governing body of any political subdivision in this state to pay off
308	308	and discharge, at any interest paying date whether the bonds are
309	309	matured or not, all or any part of any outstanding bond indebtedness
310	310	owned by the permanent school fund.
311	311	(b) The governing body of a political subdivision desiring
312	312	to pay off and discharge any bonded indebtedness owned by the fund
313	313	shall apply in writing to the organization State Board of
314	314	Education, not later than the 30th day before any interest paying
315	315	date on the bonds, describing the bonds or part of the bonds it
316	316	desires to pay off and discharge. The application must be
317	317	accompanied by an affidavit stating that only tax money collected
318	318	from a tax levy made for the specific purpose of providing a sinking
319	319	fund and paying interest on the particular bonds to be redeemed will
320	320	be spent in redeeming, taking up, or paying off the bonds.
321	321	(c) The organization State Board of Education, on receiving
322	322	the application and affidavit, shall take action on them in the
323	323	manner it considers best and shall notify the applicant whether the
324	324	application is refused or granted in whole or in part.
325	325	(d) A person who has a duty under this section may not give
326	326	or receive any commission, premium, or compensation for the
327	327	performance of that duty.
328	328	(e) Only tax money collected from tax levies made for the
329	329	specific purpose of providing a sinking fund and paying interest on
330	330	the particular bonds to be redeemed may be spent in redeeming,
331	331	taking up, or paying off of bonds as provided by this section,
332	332	unless the bonds are being redeemed for the purpose of being
333	333	refunded.
334	334	Sec. 43.010. DEFAULT OF SCHOOL DISTRICT SECURITIES HELD BY
335	335	THE PERMANENT SCHOOL FUND. (a) If interest or principal has not
336	336	been paid for two years or more on any bonds issued by any school
337	337	district and held by the permanent school fund, the Texas Education
338	338	Investment Management Organization State Board of Education may:
339	339	(1) compel the district to levy a tax sufficient to
340	340	meet the interest and principal payments then or later due; or
341	341	(2) if the district furnishes to the organization
342	342	State Board of Education
343	343	satisfactory proof that the district's taxing ability
344	344	is insufficient, require the district to:
345	345	(A) exhaust all legal remedies in collecting
346	346	delinquent taxes; and
347	347	(B) levy a tax at the maximum lawful rate on the
348	348	bona fide valuation of taxable property located in the district.
349	349	(b) Revenue collected by either method specified by
350	350	Subsection (a) shall be distributed proportionately to all owners
351	351	of the defaulted securities in compliance with the following:
352	352	(1) the proportionate share for each owner is based on
353	353	the interest and principal requirements of the original security
354	354	before authorized refunding; and
355	355	(2) prior acceptance of refunding securities does not
356	356	reduce an owner's proportionate share.
357	357	(c) As long as any school district is delinquent in its
358	358	payments of principal or interest on any of its bonds owned by the
359	359	permanent school fund, the organization State Board of Education
360	360	may specify the method of crediting payments to the state made by
361	361	the district as to principal and interest.
362	362	(d) The comptroller may not issue any warrant from the
363	363	foundation school fund to or for the benefit of any district that
364	364	has been for as long as two years in default in the payment of
365	365	principal or interest on any security owned by the permanent school
366	366	fund until the organization State Board of Education certifies that
367	367	the district has satisfactorily complied with the appropriate
368	368	provisions of this section, in which event the comptroller shall
369	369	resume making payments to or for the benefit of the district,
370	370	including the making of pretermitted payments.
371	371	Sec. 43.011. AUTHORIZED REFUNDING OF DEFAULTED SCHOOL
372	372	BONDS. (a) In compliance with this section, the Texas Education
373	373	Investment Management Organization State Board of Education may
374	374	revise, readjust, modify, refinance, or refund defaulted bonds
375	375	issued by any school district in this state and owned by either the
376	376	permanent school fund or the available school fund.
377	377	(b) Application must be made to the organization State Board
378	378	of Education by the district that issued the bonds and must show
379	379	that:
380	380	(1) delinquent interest totals at least 50 percent of
381	381	the principal amount of the bonds; and
382	382	(2) taxable valuation has decreased to such an extent
383	383	that a full application of the proceeds of the voted authorized tax
384	384	authorized to be levied on the $100 taxable property valuation will
385	385	not meet interest and principal annually maturing on the bonds.
386	386	(c) The organization State Board of Education may effect a
387	387	refunding of the debt due and to become due only if the organization
388	388	board finds that:
389	389	(1) the district is unable to pay the sums already
390	390	matured and the sums contracted to be paid as they mature by paying
391	391	annually to the organization State Board of Education the full
392	392	proceeds of a 50-cent tax levy on the $100 of all taxable valuation
393	393	of property in the district;
394	394	(2) the taxable valuation of property in the district
395	395	has decreased at least 75 percent since the bonds were issued and
396	396	that the decrease was not caused by the district or any of its
397	397	officials;
398	398	(3) the district for a period of at least five years
399	399	before applying to the organization State Board of Education for
400	400	refunding has levied a tax of 50 cents on the $100 of taxable
401	401	valuation of property in the district, and that despite such
402	402	levies, the aggregate amount due the organization State Board of
403	403	Education exceeds the aggregate amount due at the beginning of the
404	404	period;
405	405	(4) the district has not authorized and sold
406	406	additional bonds during the five-year period immediately preceding
407	407	the application; and
408	408	(5) the district has in good faith endeavored to pay
409	409	its debt in accordance with the contract evidenced by the bonds held
410	410	for the account of the permanent school fund or the available school
411	411	fund.
412	412	(d) If the conditions specified by Subsection (c) are found
413	413	to exist, the district is, for purposes of this section, insolvent,
414	414	and the organization State Board of Education may exchange the
415	415	bonds, interest coupons, and other evidences of indebtedness for
416	416	new refunding bonds of the district issued in compliance with the
417	417	following:
418	418	(1) the principal amount of the refunding bonds may
419	419	not be less than the total amount of the bonds, matured interest
420	420	coupons, accrued interest, and interest on delinquent interest then
421	421	actually due to the permanent school fund or the available school
422	422	fund; and
423	423	(2) the rate of interest to be borne by the refunding
424	424	bonds may be lower than that borne by the bonds to be refunded if in
425	425	consideration of the interest reduction the district agrees to levy
426	426	a tax each year for a period of 40 years at a rate sufficient to
427	427	produce annually a sum equal to 90 percent of the amount that can be
428	428	calculated by the levy of a tax at the rate of 50 cents on the $100
429	429	of taxable valuation of property as determined by the latest
430	430	approved tax roll of the district, and in determining the rate of
431	431	interest to be borne by the refunding bonds, the organization State
432	432	Board of Education shall be governed by the following:
433	433	(A) the organization State Board of Education may
434	434	require the rate to be a percent per annum as in its judgment will
435	435	represent the maximum rate that can be paid by the district and
436	436	still permit an orderly and certain retirement of the refunding
437	437	bonds within 40 years from their date;
438	438	(B) the interest rate of refunding bonds to be
439	439	received in exchange for bonds owned by the permanent school fund
440	440	may not be less than the minimum rate at which bonds may then be
441	441	purchased as investments for the permanent school fund; and
442	442	(C) the rate of interest of refunding bonds to be
443	443	received in exchange for bonds owned by the available school fund
444	444	may be set by the organization State Board of Education at any rate
445	445	the organization board considers feasible, and the refunding bonds
446	446	may, at the discretion of the organization State Board of
447	447	Education, be made non-interest bearing to a date fixed by the
448	448	board.
449	449	(e) The organization State Board of Education may not make a
450	450	revision, readjustment, modification, refinancing, or refunding
451	451	that will release or extinguish any debt or obligation then due and
452	452	payable to the permanent school fund or to the available school
453	453	fund.
454	454	(f) Except as otherwise provided or permitted by this
455	455	section, the refunding of the bonds of school districts authorized
456	456	by this section must be in compliance with the general provisions
457	457	with regard to the refunding of school district bonds.
458	458	Sec. 43.012. REFUNDING OTHER DEFAULTED OBLIGATIONS. (a)
459	459	Defaulted obligations, other than bonds of school districts as
460	460	provided by Section 43.011, due the available school fund may be
461	461	refinanced or refunded with the approval of the Texas Education
462	462	Investment Management Organization State Board of Education in
463	463	compliance with this section.
464	464	(b) In this section, "defaulted obligations" includes
465	465	delinquent interest whether represented by coupons or not, interest
466	466	on delinquent interest, and any other form of obligation due the
467	467	available school fund.
468	468	(c) The obligor must apply to the organization State Board
469	469	of Education and show:
470	470	(1) that the obligations due the available school fund
471	471	have been in default in whole or in part for a continuous period of
472	472	at least 15 years; and
473	473	(2) that the obligor is not in default in the payment
474	474	of the principal of any bonds owned by the permanent school fund.
475	475	(d) If the organization State Board of Education finds that
476	476	the requirements provided by Subsection (c) have been met, it may
477	477	approve a refinancing or the issuance of refunding bonds on the
478	478	conditions:
479	479	(1) that the refunding bonds must mature serially in
480	480	not exceeding 40 years from the date of issuance;
481	481	(2) that the principal amount of the refunding bonds
482	482	may be not less than the total amount of the obligations then in
483	483	default and due the available school fund; and
484	484	(3) that the refunding bonds must bear interest at a
485	485	rate or rates determined by the organization State Board of
486	486	Education to be for the best interest of the available school fund.
487	487	(e) The organization State Board of Education may accept
488	488	refunding bonds in lieu of either matured or unmatured bonds held
489	489	for the benefit of the permanent school fund if the rate of interest
490	490	on the new refunding bonds is at least the same rate as that of the
491	491	bonds being refunded.
492	492	(f) Refunding bonds issued with the approval or pursuant to
493	493	a refunding agreement with the organization State Board of
494	494	Education in compliance with either this section or Section 43.011
495	495	shall, on the order of the organization State Board of Education, be
496	496	exchanged by the comptroller for the defaulted obligations they
497	497	have been issued to refund.
498	498	SECTION 9. Sections 43.014 and 43.015, Education Code, are
499	499	amended to read as follows:
500	500	Sec. 43.014. DUTIES OF COMPTROLLER. (a) On or before July
501	501	1 of each year, the comptroller shall estimate the amount of the
502	502	available school fund receivable from every source during the
503	503	following school year and report the estimate to the Texas
504	504	Education Investment Management Organization State Board of
505	505	Education.
506	506	(b) On or before the meeting of each regular session of the
507	507	legislature, the comptroller shall report to the legislature an
508	508	estimate of the amount of the available school fund that is to be
509	509	received for the following two years, and the sources from which
510	510	that amount accrues, and that is subject to appropriation for the
511	511	establishment and support of public schools.
512	512	(c) On or before the first working day of each month, the
513	513	comptroller shall certify to the commissioner the total amount of
514	514	money collected from every source during the preceding month and on
515	515	hand to the credit of the available school fund.
516	516	(d) On receipt of certificates issued to the comptroller by
517	517	the commissioner, the comptroller shall draw warrants in favor of
518	518	the treasurer of the available school fund of each school district
519	519	for the amounts stated in the certificates. All such warrants shall
520	520	be registered.
521	521	Sec. 43.015. DUTIES OF COMPTROLLER. (a) Not later than the
522	522	30th day before the first day of each regular session of the
523	523	legislature and not later than the 10th day before the first day of
524	524	any special session at which there can be legislation respecting
525	525	the public schools, the comptroller shall report to the governor
526	526	the condition of the permanent school fund and the available school
527	527	fund, the amount of each fund, and the manner of its disbursement.
528	528	(b) The comptroller shall provide the Texas Education
529	529	Investment Management Organization State Board of Education with
530	530	the reports specified by Subsection (a) and with additional reports
531	531	concerning those funds requested by the organization State Board of
532	532	Education.
533	533	(c) The comptroller shall ensure that no portion of either
534	534	the permanent school fund or the available school fund is used to
535	535	pay any warrant drawn against any other fund.
536	536	(d) The comptroller shall receive and hold in a special
537	537	deposit and account for all properties belonging to the available
538	538	school fund. All warrants drawn on that fund by the comptroller
539	539	pursuant to a certificate of the commissioner must be registered by
540	540	the comptroller and then transmitted to the commissioner, and when
541	541	properly endorsed shall be paid by the comptroller in the order of
542	542	their presentation.
543	543	(e) On order of the organization State Board of Education,
544	544	the comptroller shall exchange or accept refunding bonds in lieu
545	545	of:
546	546	(1) either matured or unmatured bonds held for the
547	547	benefit of the permanent school fund, which are being refunded
548	548	under this chapter;
549	549	(2) defaulted obligations held for the benefit of the
550	550	available school fund if the refunding bonds are issued in
551	551	compliance with Section 43.012;
552	552	(3) defaulted obligations of any school district of
553	553	this state held for the benefit of the permanent school fund or the
554	554	available school fund if the refunding bonds are issued in
555	555	compliance with Section 43.011; or
556	556	(4) refunding bonds of any school district of this
557	557	state for school bonds not matured held by the comptroller for the
558	558	permanent school fund if the new refunding bonds are issued by the
559	559	school district in compliance with this code.
560	560	(f) The comptroller shall be the custodian of all securities
561	561	enumerated in Section 43.003(6) and of other securities as
562	562	designated by the organization State Board of Education in which
563	563	the school funds of the state are invested. The comptroller shall
564	564	keep those securities in the comptroller's custody until paid off,
565	565	discharged, delivered as required by the organization State Board
566	566	of Education, or otherwise disposed of by the proper authorities of
567	567	the state, and on the proper installment of any interest or
568	568	dividend, shall see that the proper credit is given, and the coupons
569	569	on bonds, when paid, shall be separated from the bonds and cancelled
570	570	by the comptroller.
571	571	SECTION 10. Sections 43.017 through 43.019, Education Code,
572	572	are amended to read as follows:
573	573	Sec. 43.017. USE OF COMMERCIAL BANKS AS AGENTS FOR
574	574	COLLECTION OF INCOME FROM PERMANENT SCHOOL FUND INVESTMENTS. (a)
575	575	The Texas Education Investment Management Organization State Board
576	576	of Education may contract with one or more commercial banks to
577	577	receive payments of dividends and interest on securities in which
578	578	the state permanent school funds are invested and transmit that
579	579	money with identification of its source to the comptroller for the
580	580	account of the available school fund by the fastest available
581	581	means.
582	582	(b) In choosing each commercial bank with which to contract
583	583	as authorized by Subsection (a), the organization State Board of
584	584	Education shall assure itself of:
585	585	(1) the financial stability of the bank;
586	586	(2) the location of the bank with respect to its
587	587	proximity to the banks on which checks are drawn in payment of
588	588	dividends and interest on securities of the permanent school fund;
589	589	(3) the experience and reliability of the bank in
590	590	acting as agent for others in the similar collection and
591	591	expeditious remittance of money; and
592	592	(4) the reasonableness of the bank's charges for the
593	593	services, both in amount of the charges and in relation to the
594	594	increased investment earnings of the available school fund that
595	595	will result from speedier receipt by the comptroller of the money.
596	596	Sec. 43.018. PARTICIPATION IN FULLY SECURED SECURITIES LOAN
597	597	PROGRAMS. (a) The Texas Education Investment Management
598	598	Organization State Board of Education may contract with a
599	599	commercial bank to serve both as a custodian of securities in which
600	600	the state permanent school funds are invested and to lend those
601	601	securities, under the conditions prescribed by Subsection (b), to
602	602	securities brokers and dealers on short-term loan.
603	603	(b) The organization State Board of Education may contract
604	604	with a commercial bank pursuant to this section only if:
605	605	(1) the bank is located in a city having a major stock
606	606	exchange;
607	607	(2) the bank is experienced in the operation of a fully
608	608	secured securities loan program;
609	609	(3) the bank has adequate capital in the prudent
610	610	judgment of the organization State Board of Education to assure the
611	611	safety of the securities entrusted to it as a custodian;
612	612	(4) the bank will require of any securities broker or
613	613	dealer to which it lends securities owned by the state permanent
614	614	school fund that the broker or dealer deliver to it cash collateral
615	615	for the loan of securities, and that the cash collateral will at all
616	616	times be not less than 100 percent of the market value of the
617	617	securities lent;
618	618	(5) the bank executes an indemnification agreement,
619	619	satisfactory in form and content to the organization State Board of
620	620	Education, fully indemnifying the permanent and available school
621	621	funds against loss resulting from the bank's service as custodian
622	622	of securities of the permanent school fund and its operation of a
623	623	securities loan program using securities of the permanent school
624	624	fund;
625	625	(6) the bank will speedily collect and remit on the day
626	626	of collection by the fastest available means to the comptroller any
627	627	dividends and interest collectible by it on securities held by it as
628	628	custodian, together with identification as to the source of the
629	629	dividends or interest; and
630	630	(7) the bank is the bank agreeing to pay to the
631	631	available school fund the largest sum or highest percentage of the
632	632	income derived by the bank from use of the securities of the
633	633	permanent school fund in the operation of a securities loan
634	634	program.
635	635	Sec. 43.019. ACCOUNTING TREATMENT OF CERTAIN EXCHANGES.
636	636	The Texas Education Investment Management Organization State Board
637	637	of Education may account for the exchange of permanent school fund
638	638	securities in a closely related sale and purchase transaction in a
639	639	manner in which the gain or loss on the sale is deferred as an
640	640	adjustment to the book value of the security purchased, if:
641	641	(1) the security sold and the security purchased have
642	642	a fixed maturity value;
643	643	(2) the organization board is authorized by law to
644	644	invest the permanent school fund in the security purchased;
645	645	(3) the sale is made in clear contemplation of
646	646	reinvesting substantially all of the proceeds;
647	647	(4) substantially all of the proceeds are reinvested;
648	648	(5) the transaction is completed within a reasonable
649	649	time after the sale, not to exceed 30 business days; and
650	650	(6) the transaction results in an improvement in
651	651	effective income yield, taking into consideration the deferral of
652	652	any gain or loss on the sale.
653	653	SECTION 11. Section 51.011, Natural Resources Code, is
654	654	amended by amending Subsection (a) and adding Subsections (a-3) and
655	655	(a-4) to read as follows:
656	656	(a) Any land or[,] mineral or royalty interest[, real estate
657	657	investment, or other interest, including revenue received from
658	658	those sources,] that is set apart to the permanent school fund under
659	659	the constitution and laws of this state together with the mineral
660	660	estate in riverbeds, channels, and the tidelands, including
661	661	islands, shall be controlled, sold, and leased by [subject to the
662	662	sole and exclusive management and control of] the school land board
663	663	and the commissioner under the provisions of this chapter and other
664	664	applicable law.
665	665	(a-3) All revenue received from mineral or royalty
666	666	interests described by Subsection (a), including bonus payments,
667	667	surface lease revenues, royalties, and any other type of revenue
668	668	received from those interests, shall be transferred each month to
669	669	the Texas Education Investment Management Organization for
670	670	investment in the permanent school fund.
671	671	SECTION 12. Section 32.012, Natural Resources Code, is
672	672	amended to read as follows:
673	673	Sec. 32.012. MEMBERS OF THE BOARD. (a) The board is
674	674	composed of:
675	675	(1) the commissioner;
676	676	(2) two citizens [a citizen] of the state appointed by
677	677	the governor with the advice and consent of the senate; and
678	678	(3) two citizens [a citizen] of the state appointed by
679	679	the attorney general with the advice and consent of the senate.
680	680	(a-1) One citizen appointed by the governor and one citizen
681	681	appointed by the attorney general must be selected from lists of
682	682	nominees submitted by the State Board of Education. The State Board
683	683	of Education shall submit to the governor or the attorney general,
684	684	as applicable, a list of six nominees for a vacant position
685	685	described by this subsection. The governor or attorney general, as
686	686	applicable, may request that the State Board of Education submit a
687	687	second list of six nominees if the governor or attorney general does
688	688	not choose to appoint a nominee from the first list.
689	689	(b) The authority of the attorney general to appoint [one of
690	690	the] members of the board, including the authority to make
691	691	appointments during the recess of the senate, is the same as the
692	692	authority of the governor to fill vacancies in state offices under
693	693	the Texas Constitution.
694	694	(c) Each appointment made by the governor and the attorney
695	695	general shall be made in accordance with and subject to the
696	696	provisions of the Texas Constitution authorizing the filling of
697	697	vacancies in state offices by appointment of the governor.
698	698	SECTION 13. Subchapter B, Chapter 32, Natural Resources
699	699	Code, is amended by adding Section 32.0161 to read as follows:
700	700	Sec. 32.0161. ANNUAL JOINT MEETING. The board and the Texas
701	701	Education Investment Management Organization shall hold an annual
702	702	joint public meeting to discuss the allocation of the assets of the
703	703	permanent school fund and the investment of the money in the fund.
704	704	SECTION 14. Subchapter B, Chapter 32, Natural Resources
705	705	Code, is amended by adding Section 32.0191 to read as follows:
706	706	Sec. 32.0191. SEPARATION OF RESPONSIBILITIES. The board
707	707	shall develop and implement policies that clearly separate the
708	708	policymaking responsibilities of the board and the management
709	709	responsibilities of the commissioner and the staff of the land
710	710	office.
711	711	SECTION 15. Subchapter B, Chapter 32, Natural Resources
712	712	Code, is amended by adding Section 32.027 to read as follows:
713	713	Sec. 32.027. MEMBER TRAINING. (a) A person who is
714	714	appointed to and qualifies for office as a member of the board may
715	715	not vote, deliberate, or be counted as a member in attendance at a
716	716	meeting of the board until the person completes a training program
717	717	that complies with this section.
718	718	(b) The training program must provide the person with
719	719	information regarding:
720	720	(1) the law governing board operations;
721	721	(2) the programs, functions, rules, and budget of the
722	722	board;
723	723	(3) the board's investment programs and strategies;
724	724	(4) the permanent school fund, including a
725	725	comprehensive overview of the law governing the fund;
726	726	(5) the scope of and limitations on the rulemaking
727	727	authority of the board;
728	728	(6) the results of the most recent formal audit of the
729	729	board;
730	730	(7) the requirements of:
731	731	(A) laws relating to open meetings, public
732	732	information, administrative procedure, and disclosure of conflicts
733	733	of interest; and
734	734	(B) other laws applicable to members of a state
735	735	policymaking body in performing their duties; and
736	736	(8) any applicable ethics policies adopted by the
737	737	board or the Texas Ethics Commission.
738	738	(c) A person appointed to the board is entitled to
739	739	reimbursement, as provided by the General Appropriations Act, for
740	740	the travel expenses incurred in attending the training program
741	741	regardless of whether the attendance at the program occurs before
742	742	or after the person qualifies for office.
743	743	(d) The commissioner shall create a training manual that
744	744	includes the information required by Subsection (b).
745	745	(e) The commissioner shall distribute a copy of the training
746	746	manual annually to each appointed member of the board. On receipt
747	747	of the training manual, each appointed member of the board shall
748	748	sign and submit to the commissioner a statement acknowledging
749	749	receipt of the training manual.
750	750	SECTION 16. Subchapter B, Chapter 32, Natural Resources
751	751	Code, is amended by adding Section 32.028 to read as follows:
752	752	Sec. 32.028. COMPLAINTS. (a) The board shall maintain a
753	753	system to promptly and efficiently act on complaints filed with the
754	754	board. The board shall maintain information about parties to the
755	755	complaint, the subject matter of the complaint, a summary of the
756	756	results of the review or investigation of the complaint, and its
757	757	disposition.
758	758	(b) The board shall make information available describing
759	759	its procedures for complaint investigation and resolution.
760	760	(c) The board shall periodically notify the complaint
761	761	parties of the status of the complaint until final disposition.
762	762	SECTION 17. Section 51.017, Natural Resources Code, is
763	763	amended to read as follows:
764	764	On request, the commissioner shall furnish to the Texas
765	765	Education Investment Management Organization or the Commissioner
766	766	of Education State Board of Education all available data.
767	767	SECTION 18. Section 51.401, Natural Resources Code, is
768	768	amended by amending Subsection (a) and adding Subsections (c), (d),
769	769	and (d-1) to read as follows:
770	770	(a) The board may designate money [funds] received from the
771	771	sale of real property or [any land,] mineral or royalty interests
772	772	[interest, real estate investment, or other interest, including
773	773	revenue received from those sources, that is] set apart to the
774	774	permanent school fund under the constitution and laws of this state
775	775	together with the mineral estate in riverbeds, channels, and the
776	776	tidelands, including islands, for deposit in the real estate
777	777	special fund account of the permanent school fund in the State
778	778	Treasury to be used by the board to acquire fee or lesser interests
779	779	in real property, including mineral or royalty interests, for the
780	780	use and benefit of the permanent school fund, as provided by Section
781	781	51.402 [this subchapter].
782	782	(c) Money received from the sale of real property, including
783	783	mineral or royalty interests, and designated under this subchapter
784	784	for the acquisition of real property, including mineral or royalty
785	785	interests, must be used by the board not later than one year after
786	786	the date of the sale from which the money is derived.
787	787	(d) Any money from a specific sale that remains in the real
788	788	estate special fund account for longer than one year shall be
789	789	immediately deposited in the State Treasury to the credit of the
790	790	Texas Education Investment Management Organization for investment
791	791	in the permanent school fund.
792	792	(d-1) Each quarter, the board shall provide a cashflow
793	793	report to the Texas Education Investment Management Organization
794	794	that specifies the use of all funds designated under Subsection (a)
795	795	and the amount of time that money from each specific sale has
796	796	remained in the real estate special fund account.
797	797	SECTION 19. Section 51.402, Natural Resources Code, is
798	798	amended by amending Subsections (b) and (c) to read as follows:
799	799	(b) Before acquiring real property, including mineral or
800	800	royalty interests, [using funds] under Subsection (a), the board
801	801	must determine, using the prudent investor standard, that the
802	802	acquisition is [use of the funds for the intended purpose is
803	803	authorized by Subsection (a) and] in the best interest of the
804	804	permanent school fund. [A determination by the board on the use of
805	805	funds under this section is conclusive unless the determination was
806	806	made as a result of fraud or obvious error.]
807	807	(c) Notwithstanding Subsection (a) of this section, on
808	808	January 1 of each even-numbered year, the sum of any funds
809	809	designated under Section 51.401 not being used for a purpose listed
810	810	in Subsection (a) of this section and the market value of the
811	811	investments in real estate made under this section [on January 1 of
812	812	each even-numbered year] may not exceed an amount that is equal to
813	813	15 percent of the sum of:
814	814	(1) the funds held by the board and the State Board of
815	815	Education as part of the permanent school fund; and
816	816	(2) the market value of the assets held by the board
817	817	and the State Board of Education as part of the permanent school
818	818	fund [on that date].
819	819	SECTION 20. Sections 51.4021(a) and (b), Natural Resources
820	820	Code, are amended to read as follows:
821	821	(a) In consultation with the Texas Education Investment
822	822	Management Organization the The board may appoint investment
823	823	managers, consultants, or advisors to invest or assist the board in
824	824	investing the money designated under Section 51.401, to the extent
825	825	the investment of the money is authorized under this chapter, by
826	826	contracting for professional investment management or investment
827	827	advisory services with one or more organizations that are in the
828	828	business of managing or advising on the management of real estate
829	829	investments.
830	830	(b) To be eligible for appointment under this section, an
831	831	investment manager, consultant, or advisor shall agree to abide by
832	832	the policies, requirements, or restrictions, including ethical
833	833	standards and disclosure policies and criteria for determining the
834	834	quality of investments and for the use of standard rating services,
835	835	that the board adopts for real estate investments of the permanent
836	836	school fund. Money designated under Section 51.401 may only be
837	837	invested to the extent the board has the authority under this
838	838	chapter to make the investment, and may not be invested in a real
839	839	estate investment trust, as defined by Section 200.001, Business
840	840	Organizations Code, or otherwise invested in a manner not
841	841	authorized under this chapter.
842	842	SECTION 21. Sections 51.408(a), (b), (d), and (e), Natural
843	843	Resources Code, are amended to read as follows:
844	844	(a) In addition to any other requirements provided by law,
845	845	the board shall adopt and enforce an ethics policy that provides
846	846	standards of conduct relating to the management and investment of
847	847	the funds designated for that purpose under Section 51.401. The
848	848	ethics policy must include provisions that address the following
849	849	issues as they apply to the management and investment of the funds
850	850	and to persons responsible for acquiring or managing real property
851	851	or mineral or royalty interests of the permanent school fund or
852	852	[and] investing the funds to the extent authorized by this chapter:
853	853	(1) general ethical standards;
854	854	(2) conflicts of interest;
855	855	(3) prohibited transactions and interests;
856	856	(4) the acceptance of gifts and entertainment;
857	857	(5) compliance with applicable professional
858	858	standards;
859	859	(6) ethics training; and
860	860	(7) compliance with and enforcement of the ethics
861	861	policy.
862	862	(b) The ethics policy must include provisions applicable
863	863	to:
864	864	(1) members of the board;
865	865	(2) the commissioner;
866	866	(3) employees of the board; and
867	867	(4) any person who provides services to the board
868	868	relating to the management [or investment] of the funds designated
869	869	under Section 51.401 or the investment of funds to the extent
870	870	authorized by this chapter.
871	871	(d) The provisions of the ethics policy that apply to a
872	872	person who provides services to the board relating to the
873	873	management [or investment] of the funds designated under Section
874	874	51.401 or the investment of those funds to the extent authorized by
875	875	this chapter must be based on the Code of Ethics and the Standards
876	876	of Professional Conduct prescribed by the Association for
877	877	Investment Management and Research or other ethics standards
878	878	adopted by another appropriate professionally recognized entity.
879	879	(e) The board shall ensure that applicable provisions of the
880	880	ethics policy are included in any contract under which a person
881	881	provides services to the board relating to the management [and
882	882	investment] of the funds designated under Section 51.401 or the
883	883	investment of those funds to the extent authorized by this chapter.
884	884	SECTION 22. Section 51.409(a), Natural Resources Code, is
885	885	amended to read as follows:
886	886	(a) A member of the board, the commissioner, an employee of
887	887	the board, or a person who provides services to the board that
888	888	relate to the management [or investment] of the funds designated
889	889	under Section 51.401 or the investment of those funds to the extent
890	890	authorized under this chapter who has a business, commercial, or
891	891	other relationship that could reasonably be expected to diminish
892	892	the person's independence of judgment in the performance of the
893	893	person's responsibilities relating to the management of public
894	894	school lands or investment of the funds shall disclose the
895	895	relationship in writing to the board.
896	896	SECTION 23. Section 51.410, Natural Resources Code, is
897	897	amended to read as follows:
898	898	Sec. 51.410. REPORTS OF EXPENDITURES. A consultant,
899	899	advisor, broker, or other person providing services to the board
900	900	relating to the management [and investment] of the funds designated
901	901	under Section 51.401 or the investment of those funds to the extent
902	902	authorized by this chapter shall file with the board regularly, as
903	903	determined by the board, a report that describes in detail any
904	904	expenditure of more than $50 made by the person on behalf of:
905	905	(1) a member of the board;
906	906	(2) the commissioner; or
907	907	(3) an employee of the board.
908	908	SECTION 24. Section 51.412, Natural Resources Code, is
909	909	amended to read as follows:
910	910	Sec. 51.412. REPORTS TO LEGISLATURE. [(a)] Not later than
911	911	September 1 of each [even-numbered] year, the board shall submit to
912	912	the legislature a report that includes [, specifically and in
913	913	detail, assesses the direct and indirect economic impact, as
914	914	anticipated by the board, of the investment of funds designated
915	915	under Section 51.401 for deposit in the real estate special fund
916	916	account of the permanent school fund. The board may not disclose
917	917	information under this section that is confidential under
918	918	applicable state or federal law. The report must include] the
919	919	following information:
920	920	(1) the total amount of money received under this
921	921	chapter and designated under [by] Section 51.401 for deposit in the
922	922	real estate special fund account of the permanent school fund that
923	923	the board intends to use for a purpose authorized under that section
924	924	[invest];
925	925	(2) [the rate of return the board expects to attain on
926	926	the investment;
927	927	[(3)] the amount of money the board expects to
928	928	distribute to the available school fund or the State Board of
929	929	Education for investment in the permanent school fund under Section
930	930	51.413 [after making the investments];
931	931	(3) [(4)] the distribution [of the board's
932	932	investments] by county of real property interests, including
933	933	mineral or royalty interests, and including the actual or expected
934	934	revenues from the interests, that were acquired by the board for the
935	935	use and benefit of the permanent school fund since the most recently
936	936	submitted report under this section;
937	937	(4) the market value of all investments and assets
938	938	managed by the board and the total market value of the permanent
939	939	school fund;
940	940	[(5) the effect of the board's investments on the level
941	941	of employment, personal income, and capital investment in the
942	942	state;] and
943	943	(5) [(6)] any other information the board considers
944	944	necessary to include in the report.
945	945	[(b) Not later than January 1 of each odd-numbered year, the
946	946	board shall submit to the legislature a report that assesses the
947	947	return and economic impact of the investments reported to the
948	948	legislature before the preceding regular legislative session.]
949	949	SECTION 25. Section 51.413(a), Natural Resources Code, is
950	950	amended to read as follows:
951	951	(a) The board may, by a resolution adopted at a regular
952	952	meeting, release from the real estate special fund account funds
953	953	previously designated under Section 51.401 or used under Section
954	954	51.402 to acquire real property, including mineral or royalty
955	955	interests, [managed, used, or encumbered under Section 51.402 or
956	956	Section 51.4021] to be deposited in the State Treasury to the credit
957	957	of:
958	958	(1) the available school fund; or
959	959	(2) the State Board of Education for investment in the
960	960	permanent school fund.
961	961	SECTION 26. The following provisions are repealed:
962	962	(1) Section 43.006, Education Code; and
963	963	(2) Section 51.011 (a-2), Natural Resources Code.
964	964	SECTION 27. As soon as practicable after the appointment of
965	965	the members of the Texas Education Investment Management
966	966	Organization, the School Board of Education and the School Land
967	967	Board shall provide for the transfer of powers, duties, functions,
968	968	programs, and activities under this Act. The transfer must be
969	969	completed by August 1, 2020.
970	970	SECTION 28. Not later than September 1, 2020, the governor
971	971	and the attorney general shall appoint members to the School Land
972	972	Board in accordance with Section 32.012(a-1), Natural Resources
973	973	Code, as added by this Act.
974	974	SECTION 29. Section 32.027, Natural Resources Code, as
975	975	added by this Act, applies to a member of the School Land Board
976	976	appointed before, on, or after the effective date of this Act. A
977	977	member of the School Land Board may not vote, deliberate, or be
978	978	counted as a member in attendance at a meeting of the board held on
979	979	or after December 1, 2019, until the member completes the training.
980	980	SECTION 30. This Act takes effect on the date the
981	981	constitutional amendment proposed by the 86th Legislature, Regular
982	982	Session, 2019, relating to the creation of the bicentennial
983	983	education fund, the dedication of funds for teacher pay and
984	984	historically underperforming student groups, and the transfer of
985	985	the management and investment of the permanent school fund to an
986	986	entity designated by the legislature.