Enrolled Bill Summary

House Joint Resolution 58 proposes a constitutional amendment to redirect certain investments of the permanent university fund (PUF) from a prudent person standard to a prudent investor standard. Under the amendment, the available university fund consists of distributions from the total return on all PUF investment assets, including capital appreciation, rather than being restricted to dividends, interest, and income. The amendment gives The University of Texas board of regents authority to determine such distributions, so as to provide a stable and predictable stream to the available university fund while maintaining the purchasing power of PUF investments and distributions. The amendment establishes a minimum annual distribution equal to the amount necessary to pay principal and interest on issued bonds and notes and a maximum of seven percent of the average net fair market value of PUF investment assets except as necessary to make the bond and note payments. If the purchasing power of investments for any rolling 10-year period is not preserved, distribution increases are prohibited until the purchasing power is restored. Temporary provisions of the amendment preserve existing obligations on bonds or notes issued before January 1, 2000.