By Junell H.J.R. No. 54
77R642 ESH-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment relating to the use of income
1-2 and appreciation of the permanent school fund.
1-3 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 5, Article VII, Texas Constitution, is
1-5 amended to read as follows:
1-6 Sec. 5. (a) The permanent school fund consists of all land
1-7 appropriated for public schools by this constitution or the other
1-8 laws of this state and other properties belonging to the permanent
1-9 school fund. The available school fund consists of the
1-10 distributions made to it from the total return on all investment
1-11 assets of [principal of all bonds and other funds, and the
1-12 principal arising from the sale of the lands hereinbefore set apart
1-13 to said school fund, shall be] the permanent school fund, [and all
1-14 the interest derivable therefrom and] the taxes [herein] authorized
1-15 by this constitution or general law to be part of [and levied shall
1-16 be] the available school fund, and appropriations made to the
1-17 available school fund by the legislature. The public school
1-18 employee health insurance fund consists of the distributions made
1-19 to it from the total return on all investment assets of the
1-20 permanent school fund and appropriations made to the public school
1-21 employee health insurance fund by the legislature. The total
1-22 amount distributed from the permanent school fund to the available
1-23 school fund and the public school employee health insurance fund in
1-24 each fiscal year must be an amount equal to the lesser of:
2-1 (1) five percent of the average of:
2-2 (A) the market value of the permanent school
2-3 fund on the first day of that fiscal year; and
2-4 (B) the market value of the permanent school
2-5 fund on the first day of the two preceding fiscal years; or
2-6 (2) a portion of the total return on all investment
2-7 assets of the permanent school fund such that the portion of the
2-8 total return retained in the permanent school fund is sufficient,
2-9 as determined by the comptroller of public accounts, to preserve
2-10 the purchasing power of the permanent school fund for the current
2-11 fiscal year and the next nine fiscal years.
2-12 (b) Eighty percent of the annual distribution from the
2-13 permanent school fund under Subsection (a) of this section shall be
2-14 transferred to the available school fund, and twenty percent shall
2-15 be transferred to the public school employee health insurance fund.
2-16 (c) The expenses of managing permanent school fund land and
2-17 investments shall be paid by the permanent school fund.
2-18 (d) The available school fund shall be applied annually to
2-19 the support of the public free schools. Except as provided by this
2-20 section, the legislature may not enact a [no] law [shall ever be
2-21 enacted] appropriating any part of the permanent school fund or
2-22 available school fund to any other purpose. The permanent school
2-23 fund and the available school fund may not [whatever; nor shall the
2-24 same, or any part thereof ever] be appropriated to or used for the
2-25 support of any sectarian school. The [; and the] available school
2-26 fund [herein provided] shall be distributed to the several counties
2-27 according to their scholastic population and applied in the [such]
3-1 manner [as may be] provided by law.
3-2 (e) The public school employee health insurance fund may be
3-3 used only for providing and administering a group health program
3-4 for active and retired public school employees. The legislature by
3-5 general law shall designate an agency to provide and administer
3-6 that program.
3-7 (f) [(b)] The legislature by law may provide for using the
3-8 permanent school fund [and the income from the permanent school
3-9 fund] to guarantee bonds issued by school districts or by the state
3-10 for the purpose of making loans to or purchasing the bonds of
3-11 school districts for the purpose of acquisition, construction, or
3-12 improvement of instructional facilities including all furnishings
3-13 thereto. If any payment is required to be made by the permanent
3-14 school fund as a result of its guarantee of bonds issued by the
3-15 state, an amount equal to this payment shall be immediately paid by
3-16 the state from the treasury to the permanent school fund. An
3-17 amount owed by the state to the permanent school fund under this
3-18 section shall be a general obligation of the state until paid. The
3-19 amount of bonds authorized hereunder shall not exceed $750 million
3-20 or a higher amount authorized by a two-thirds record vote of both
3-21 houses of the legislature. If the proceeds of bonds issued by the
3-22 state are used to provide a loan to a school district and the
3-23 district becomes delinquent on the loan payments, the amount of the
3-24 delinquent payments shall be offset against state aid to which the
3-25 district is otherwise entitled.
3-26 (g) [(c)] The legislature may appropriate part of the
3-27 available school fund for administration of [the permanent school
4-1 fund or of] a bond guarantee program established under this
4-2 section.
4-3 (h) [(d)] Notwithstanding any other provision of this
4-4 constitution, in managing the assets of the permanent school fund,
4-5 the State Board of Education may acquire, exchange, sell,
4-6 supervise, manage, or retain, through procedures and subject to
4-7 restrictions it establishes and in amounts it considers
4-8 appropriate, any kind of investment, including investments in the
4-9 Texas growth fund created by Article XVI, Section 70, of this
4-10 constitution, that persons of ordinary prudence, discretion, and
4-11 intelligence, exercising the judgment and care under the
4-12 circumstances then prevailing, acquire or retain for their own
4-13 account in the management of their affairs, not in regard to
4-14 speculation but in regard to the permanent disposition of their
4-15 funds, considering the probable income as well as the probable
4-16 safety of their capital.
4-17 SECTION 2. This proposed constitutional amendment shall be
4-18 submitted to the voters at an election to be held November 6, 2001.
4-19 The ballot shall be printed to permit voting for or against the
4-20 proposition: "The constitutional amendment relating to the use of
4-21 income and appreciation of the permanent school fund and
4-22 authorizing the use of a portion of that income and appreciation to
4-23 provide and administer a group health program for active and
4-24 retired public school employees."