By Hochberg                                           H.J.R. No. 45
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                 A JOINT RESOLUTION
 1-1     proposing a constitutional amendment relating to the distribution
 1-2     of the Permanent School Fund.
 1-3           BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 5(a), Article VII, Texas Constitution, is
 1-5     amended to read as follows:
 1-6           (a)  The principal of all bonds and other funds, and the
 1-7     principal arising from the sale of the lands hereinbefore set apart
 1-8     to said school fund, shall be the permanent school fund, and [all
 1-9     the interest derivable therefrom and the taxes herein authorized
1-10     and levied] the distribution therefrom as provided in Subsections
1-11     (e) and (f) of this section shall be the available school fund.
1-12     The available school fund shall be applied annually to the support
1-13     of the public free schools.  Except as provided by this section, no
1-14     law shall ever be enacted appropriating any part of the permanent
1-15     or available school fund to any other purpose whatever; nor shall
1-16     the same, or any part thereof ever be appropriated to or used for
1-17     the support of any sectarian school; and the available school fund
1-18     herein provided shall be distributed to the several counties
1-19     according to their scholastic population and applied in such manner
1-20     as may be provided by law.
1-21           SECTION 2.  Section 5, Article VII, Texas Constitution, is
 2-1     amended by adding Subsections (e), (f), and (g) as follows:
 2-2                 (e)  The State Board of Education shall annually
 2-3     determine the total return, including income and net appreciation,
 2-4     on the permanent school fund.  Notwithstanding any other provision
 2-5     of this constitution, except as provided by Subsection (f) of this
 2-6     section, the annual distribution of the available school fund is
 2-7     the lesser of the total return on the permanent school fund or an
 2-8     amount computed by multiplying the permanent school fund's market
 2-9     value at the end of the fiscal year by the adjusted average return
2-10     on the permanent school fund.  For purposes of this subsection, the
2-11     adjusted average return on the permanent school fund is the average
2-12     of the total return on the fund for the preceding five years, as a
2-13     percentage of the fund's market value, less the sum of the average
2-14     annual inflation rate, as determined by the comptroller of public
2-15     accounts, for the preceding five years, and the average annual rate
2-16     of growth in student enrollment in this state for the preceding
2-17     five years.
2-18                 (f)  The annual distribution from the available school
2-19     fund may not be less than two percent of the average of the market
2-20     value of the permanent school fund at the end of each of the five
2-21     preceding fiscal years.
2-22                 (g)  The State Board of Education shall modify the
2-23     distribution of the available school fund provided in this section
2-24     as necessary only to comply with Internal Revenue Service rulings
2-25     regarding the use of the permanent school fund and income from the
 3-1     permanent school fund to guarantee bonds as provided under
 3-2     Subsection (b) of this section.
 3-3           SECTION 3.  This proposed constitutional amendment shall be
 3-4     submitted to the voters at an election to be held November 2, 1999.
 3-5     The ballot shall be printed to permit voting for or against the
 3-6     proposition:  "The constitutional amendment providing for more
 3-7     efficient investment of the Permanent School Fund."