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.