By Brown, et al.                                      S.J.R. No. 42
         76R8625 JRD-D                           
                                 A JOINT RESOLUTION
 1-1     proposing a constitutional amendment allowing the state to create a
 1-2     program involving the issuance of bonds backed by money received
 1-3     from the tobacco settlement to meet the vital infrastructure needs
 1-4     of the state.
 1-5           BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Article III, Texas Constitution, is amended by
 1-7     adding Section 49-k to read as follows:
 1-8           Sec. 49-k.  (a)  The legislature by general law may authorize
 1-9     specific state agencies to define vital infrastructure  needs of
1-10     the state and to develop and propose projects designed to meet
1-11     those needs, including constructing or improving or assisting in
1-12     the construction or improvement of:
1-13                 (1)  the state's public school infrastructure,
1-14     including public school buildings and other essential public
1-15     education facilities, with the purpose of state assistance under
1-16     this subdivision being to provide needed infrastructure, to help
1-17     equalize the cost of building public school infrastructure between
1-18     school districts that have relatively high taxable property values
1-19     and school districts that have relatively low taxable property
1-20     values, or to provide  local property tax relief;
1-21                 (2)  infrastructure for medical research, such as
1-22     cancer research or pediatric medical research, at state medical
1-23     research institutions;
1-24                 (3)  highways, roads, bridges, and other modes of
 2-1     public transportation, with the purpose of state assistance under
 2-2     this subdivision being to supplement the ongoing efforts of
 2-3     counties and of the Texas Department of Transportation;
 2-4                 (4)  infrastructure needed to improve the quality of
 2-5     life in various parts of the state,  such as water or wastewater
 2-6     facilities or facilities required for the maintenance of the
 2-7     environment; and
 2-8                 (5)  other infrastructure needs that meet criteria
 2-9     prescribed by general law.
2-10           (b)  The legislature by general law may provide for the
2-11     manner in which a proposed  vital infrastructure program is
2-12     approved. The procedure for approval may include a requirement that
2-13     a state agency submit a proposed vital infrastructure program to
2-14     the governor and the Legislative Budget  Board for review, comment,
2-15     and joint approval.
2-16           (c)  The legislature by general law may allow bonds to be
2-17     issued to pay for an approved vital infrastructure program.
2-18     General obligation bonds may not be issued by the state under this
2-19     section. The only money that may be pledged by the state to the
2-20     payment of the principal and interest on bonds issued under this
2-21     section is money generated by an approved vital infrastructure
2-22     program and money received by the state under the  Comprehensive
2-23     Settlement Agreement and Release filed in the case styled The State
2-24     of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, in the
2-25     United States District Court, Eastern District of Texas. For any
2-26     calendar year, not more than 80 percent of the sum of unspent and
2-27     unencumbered money received in previous years from settlement
 3-1     proceeds in the tobacco litigation, together with the projected
 3-2     amount reasonably expected to be received from those proceeds
 3-3     during that year, may be scheduled for the payment of principal and
 3-4     interest during the year on all outstanding bonds issued under this
 3-5     section.
 3-6           (d)  Bonds issued under this section must be issued subject
 3-7     to the condition that bondholders  do not have the right to demand
 3-8     payment out of a source of money that has not been specifically
 3-9     pledged to the payment of principal and interest on the bonds.
3-10           (e)  The legislature by general law may provide for the
3-11     manner in which bonds issued under this section are approved and
3-12     issued.
3-13           SECTION 2.  This proposed constitutional amendment shall be
3-14     submitted to the voters at an election to be held on November 2,
3-15     1999. The ballot shall be printed to provide for voting for or
3-16     against the proposition: "The constitutional amendment allowing the
3-17     state to issue bonds backed by money from the tobacco settlement to
3-18     pay for vital improvements to the state's infrastructure."