By Mowery H.J.R. No. 94
77R6798 JSA-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment to update and clarify the
1-2 provisions governing the permanent university fund.
1-3 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 10, Article VII, Texas Constitution, is
1-5 amended to read as follows:
1-6 Sec. 10. The Legislature shall [as soon as practicable
1-7 establish,] organize and provide for the maintenance, support and
1-8 direction of a University of the first class, to be located in the
1-9 city of Austin [by a vote of the people of this State,] and
1-10 styled[,] "The University of Texas", for the promotion of
1-11 literature, and the arts and sciences, and for [including] an
1-12 Agricultural[,] and Mechanical University of the first class
1-13 [department].
1-14 SECTION 2. Sections 11, 11a, 11b, and 12, Article VII, Texas
1-15 Constitution, are revised as Section 11 of that article and amended
1-16 to read as follows:
1-17 Sec. 11. (a) In order to enable the Legislature to perform
1-18 the duties set forth in [the foregoing] Section 10 of this article,
1-19 it is hereby declared all lands and other property heretofore set
1-20 apart and appropriated for the establishment and maintenance of the
1-21 University of Texas, together with all the proceeds of sales of the
1-22 same, heretofore made or hereafter to be made, and all grants,
1-23 donations and appropriations that may hereafter be made by the
1-24 State of Texas, or from any other source, except donations limited
2-1 to specific purposes, shall constitute and become a permanent
2-2 university fund [Permanent University Fund]. [And the same as
2-3 realized and received into the Treasury of the State (together with
2-4 such sums belonging to the Fund, as may now be in the Treasury),
2-5 shall be invested in bonds of the United States, the State of
2-6 Texas, or counties of said State, or in School Bonds of
2-7 municipalities, or in bonds of any city of this State, or in bonds
2-8 issued under and by virtue of the Federal Farm Loan Act approved by
2-9 the President of the United States, July 17, 1916, and amendments
2-10 thereto; and the interest accruing thereon shall be subject to
2-11 appropriation by the Legislature to accomplish the purpose declared
2-12 in the foregoing Section; provided, that the one-tenth of the
2-13 alternate Section of the lands granted to railroads, reserved by
2-14 the State, which were set apart and appropriated to the
2-15 establishment of the University of Texas, by an Act of the
2-16 Legislature of February 11, 1858, entitled, "An Act to establish
2-17 the University of Texas," shall not be included in, or constitute a
2-18 part of, the Permanent University Fund.]
2-19 (b) The [Sec. 11a. In addition to the bonds enumerated in
2-20 Section 11 of Article VII of the Constitution of the State of
2-21 Texas, the] Board of Regents of The University of Texas may invest
2-22 the permanent university fund [Permanent University Fund] in:
2-23 (1) securities, bonds, or other obligations of the
2-24 State of Texas, or counties, cities and towns, school districts,
2-25 and other political subdivisions of this state;
2-26 (2) securities, bonds or other obligations issued,
2-27 insured, or guaranteed in any manner by the United States
3-1 Government, or any of its agencies;[,] and
3-2 (3) [in] such bonds, debentures, or obligations, and
3-3 preferred and common stocks issued by corporations, associations,
3-4 or other institutions as the Board of Regents of The University of
3-5 Texas System may deem to be proper investments for said funds;
3-6 provided, however, that not more than one per cent (1%) of said
3-7 fund shall be invested in the securities of any one (1)
3-8 corporation, nor shall more than five per cent (5%) of the voting
3-9 stock of any one (1) corporation be owned; provided, further, that
3-10 stocks eligible for purchase shall be restricted to stocks of
3-11 companies incorporated within the United States which have paid
3-12 dividends for five (5) consecutive years or longer immediately
3-13 prior to the date of purchase and which, except for bank stocks and
3-14 insurance stocks, are listed upon an exchange registered with the
3-15 Securities and Exchange Commission or its successors.
3-16 (c) [In making each and all of such investments said Board
3-17 of Regents shall exercise the judgment and care under the
3-18 circumstances then prevailing which men of ordinary prudence,
3-19 discretion, and intelligence exercise in the management of their
3-20 own affairs, not in regard to speculation but in regard to the
3-21 permanent disposition of their funds, considering the probable
3-22 income therefrom as well as the probable safety of their capital.]
3-23 The interest, dividends and other income accruing from the
3-24 investments of the permanent university fund [Permanent University
3-25 Fund], except the portion thereof which is appropriated by the
3-26 operation of Section 18 of this article [Article VII] for the
3-27 payment of principal and interest on bonds or notes issued
4-1 thereunder, shall be subject to appropriation by the Legislature to
4-2 accomplish the purposes declared in Section 10 of [Article VII of]
4-3 this article [Constitution].
4-4 (d) In [This amendment shall be self-enacting, and shall
4-5 become effective upon its adoption, provided, however, that the
4-6 Legislature shall provide by law for full disclosure of all details
4-7 concerning the investments in corporate stocks and bonds and other
4-8 investments authorized herein.]
4-9 [Sec. 11b. Notwithstanding any other provision of this
4-10 constitution, in] managing the assets of the permanent university
4-11 fund, the Board of Regents of the University of Texas System may
4-12 acquire, exchange, sell, supervise, manage, or retain, through
4-13 procedures and subject to restrictions it establishes and in
4-14 amounts it considers appropriate, any kind of investment, including
4-15 investments in the Texas Growth Fund created by Article XVI,
4-16 Section 70, of this constitution, that prudent investors,
4-17 exercising reasonable care, skill, and caution, would acquire or
4-18 retain in light of the purposes, terms, distribution requirements,
4-19 and other circumstances of the fund then prevailing, taking into
4-20 consideration the investment of all the assets of the fund rather
4-21 than a single investment.
4-22 (e) [Sec. 12.] The land herein set apart to the permanent
4-23 university fund [University fund] shall be sold under such
4-24 regulations, at such times, and on such terms as may be provided by
4-25 law; and the Legislature shall provide for the prompt collection,
4-26 at maturity, of all debts due on account of University lands,
4-27 heretofore sold, or that may hereafter be sold, and shall in
5-1 neither event have the power to grant relief to the purchasers.
5-2 SECTION 3. This proposed constitutional amendment shall be
5-3 submitted to the voters at an election to be held November 6, 2001.
5-4 The ballot shall be printed to permit voting for or against the
5-5 proposition: "The constitutional amendment to update and clarify
5-6 the provisions governing the permanent university fund."