SBW C.S.H.J.R. 8 75(R)BILL ANALYSIS


PENSIONS & INVESTMENTS
C.S.H.J.R. 8
By: Stiles
3-5-97
Committee Report (Substituted)



BACKGROUND 

The 74th Legislature created the Texas Tomorrow Fund, which is a prepaid
higher education tuition program. This program allows the purchaser to
enter a contract to prepay the tuition and fees for the purchaser's
beneficiary to attend a public institution of higher education. The fund's
assets are not currently guaranteed by the State Constitution, as are
other investment funds such as the Permanent University Fund, Permanent
School Fund, etc. 

Benefits/justification for doing so.


PURPOSE

This constitutional amendment would extend the state's full faith and
credit to the Texas Tomorrow Fund. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article VII, Texas Constitution, by adding Section 19.

Sec. 19.  TEXAS TOMORROW FUND.

(a) is amended by the addition of the language to define the Texas
Tomorrow Fund as a trust fund for the prepayment of tuition and fees for
institutions of higher education and is held in trust by the state for the
beneficiaries and participants and to pay for the cost of the
administration of the program and may not be diverted. 

(b) is amended by the addition of the language which specifies that the
amount contributed cannot be less than the amount anticipated for tuition
and fees and if there is not enough money in the fund to pay the tuition
and fees of the institution of higher learning then money is appropriated
out of the first money coming into the state treasury not otherwise
appropriated. 

(c) is amended by the addition of the language to specify that investments
by an entity must be made with judgement and not be for speculation, but
for the disposition of the funds. 

(d) is amended by the addition of the language to allow the comptroller to
implement this section. 

(e) is amended by the addition of the language which provides this section
with control over any conflicting section in the constitution. 

SECTION 2.  Election will be held November 4, 1997 for the submission of
the proposed constitutional amendment.  The fund will be a
constitutionally protected trust fund. 

 COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute makes minor changes in the ballot language to clarify that
the fund is constitutionally protected, so that it is not tapped into in
the future.