By:  Montford                                         S.B. No. 1397
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to certain constitutionally dedicated funds for certain
    1-2  public institutions of higher education and to the creation,
    1-3  composition, and financing of the higher education fund; making an
    1-4  appropriation.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Subchapter B, Chapter 62, Education Code, is
    1-7  amended by adding Sections 62.024, 62.025, and 62.026 to read as
    1-8  follows:
    1-9        Sec. 62.024.  AMOUNT OF APPROPRIATION INCREASED.  (a)  In
   1-10  accordance with Article VII, Section 17(a), of the Texas
   1-11  Constitution, the amount of the annual constitutional appropriation
   1-12  under that subsection is increased to $225 million.
   1-13        (b)  This section expires on September 1 after the date the
   1-14  comptroller certifies that the value of the higher education fund
   1-15  is $2 billion.
   1-16        Sec. 62.025.  TRANSFER OF PART OF APPROPRIATION.  (a)  Not
   1-17  later than November 1 of each state fiscal year, the comptroller
   1-18  shall deposit $50 million of the annual constitutional
   1-19  appropriation under Article VII, Section 17(a), of the Texas
   1-20  Constitution to the credit of the higher education fund.
   1-21        (b)  The comptroller may adopt rules to administer this
   1-22  section.
   1-23        (c)  The transfer required by this section expires on
   1-24  September 1 after the date the comptroller certifies that the value
    2-1  of the higher education fund is $2 billion.
    2-2        Sec. 62.026.  HIGHER EDUCATION FUND.  (a)  The higher
    2-3  education fund is a fund outside the state treasury in the custody
    2-4  of the state treasurer.
    2-5        (b)  The fund consists of the $50 million transferred to the
    2-6  fund each state fiscal year under Section 62.025 of this code and
    2-7  interest, dividends, and other income earned from the investment of
    2-8  the fund.
    2-9        (c)  Distributions from the fund may be used only for the
   2-10  purposes provided by Article VII, Section 17(a), of the Texas
   2-11  Constitution.
   2-12        (d)  The state treasurer shall administer the fund and invest
   2-13  the fund in the same manner as the permanent university fund.
   2-14        (e)  The state treasurer may deduct a reasonable amount for
   2-15  administrative expenses from the interest, dividends, and other
   2-16  income earned from the investment of the fund.  The amount deducted
   2-17  shall be deposited to the credit of the general revenue fund.
   2-18        (f)  The comptroller shall certify the date on which the
   2-19  value of the fund is $2 billion and publish that certification in
   2-20  the Texas Register.
   2-21        (g)  Beginning with the first state fiscal year that begins
   2-22  on or after the date the comptroller certifies that the value of
   2-23  the higher education fund is $2 billion, the state treasurer, not
   2-24  later than November 1 of each fiscal year, shall distribute in
   2-25  accordance with Article VII, Section 17(i), of the Texas
   2-26  Constitution the interest, dividends, and other income earned from
   2-27  the investment of the fund, less the amount of administrative
    3-1  expenses deducted under Subsection (e) of this section, to the
    3-2  eligible institutions in accordance with the allocation formula
    3-3  under Section 62.021(a) of this code.
    3-4        SECTION 2.  This Act takes effect September 1, 1995.
    3-5        SECTION 3.  The importance of this legislation and the
    3-6  crowded condition of the calendars in both houses create an
    3-7  emergency and an imperative public necessity that the
    3-8  constitutional rule requiring bills to be read on three several
    3-9  days in each house be suspended, and this rule is hereby suspended.