(a) The commission shall appoint investment managers for the management and investment of the Texas public library endowment fund by contracting for professional investment management services with one or more organizations that are in the business of managing investments.
(b) In choosing and contracting for professional investment management services and in continuing the use of an investment manager, the commission shall act prudently and in the interest of the beneficiaries of the endowment fund.

(c) In making and supervising investments of the endowment fund, an investment manager and the commission shall discharge their respective duties solely in the interest of the beneficiaries of the fund:
(1) for the exclusive purposes of providing benefits for the beneficiaries of the fund and defraying reasonable expenses of administering this chapter;
(2) with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in a similar capacity and familiar with matters of the type would use in the conduct of an enterprise with a similar character and aims;
(3) by diversifying the investments of the fund to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(4) in accordance with the documents and instruments governing the fund to the extent that the documents and instruments are consistent with this section.
(d) To be eligible for appointment under this section, an investment manager must be:
(1) registered under the Investment Advisers Act of 1940 (15 U.S.C. § 80b-1 et seq.), as amended;
(2) a bank as defined by that Act that has a trust department; or
(3) an insurance company qualified to perform investment services under the laws of more than one state.
(e) In a contract made under this section, the commission shall specify any policies, requirements, or restrictions, including criteria for determining the quality of investments and for the use of standard rating services, that the commission adopts for investments of the endowment fund.
(f) A member of the commission is not liable for the acts or omissions of an investment manager appointed under Subsection (a). A member of the commission is not permitted or obligated to invest or otherwise to manage any asset of the fund subject to management by the investment manager.
(g) An investment manager appointed under Subsection (a) shall acknowledge in writing the manager’s fiduciary responsibilities to the endowment fund.
(h) The commission may at any time and shall frequently monitor the investments made by each investment manager for the endowment fund. The commission may contract for professional evaluation services to fulfill this requirement.
(i) The commission shall enter into an investment custody account agreement designating a bank or a depository trust company to serve as custodian for all assets allocated to or generated under a contract for professional investment management services.
(j) Under a custody account agreement, the commission shall require the designated custodian to perform the duties and assume the responsibilities for the endowment fund that are performed and assumed, in the absence of a contract, by the custodian of the endowment fund. The custodian shall furnish to the commission, annually or more frequently if required by commission rule, a sworn statement of the amount of the endowment fund assets in the custodian’s custody.
(k) For purposes of this section, the beneficiaries of the Texas public library endowment fund are the persons who use public libraries, public library facilities, and public library collections and the public libraries that benefit from the performance of the commission’s powers and duties under this chapter.