By Duncan S.J.R. No. 17
77R2248 ESH-D
A JOINT RESOLUTION
1-1 proposing a constitutional amendment relating to making
1-2 distributions from the permanent school fund to the available
1-3 school fund and creating the education excellence supplemental
1-4 fund.
1-5 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 5, Article VII, Texas Constitution, is
1-7 amended to read as follows:
1-8 Sec. 5. (a) The principal of all bonds and other funds, and
1-9 the principal arising from the sale of the lands hereinbefore set
1-10 apart to said school fund, shall be the permanent school fund, and
1-11 the available school fund shall consist of the distributions made
1-12 to it from the total return on all investment assets of the
1-13 permanent school fund [all the interest derivable therefrom] and
1-14 the taxes herein authorized and levied [shall be the available
1-15 school fund]. The education excellence supplemental fund shall
1-16 consist of the distributions made to it from the total return on
1-17 all investment assets of the permanent school fund. The total
1-18 amount distributed from the permanent school fund to the available
1-19 school fund and the education excellence supplemental fund in each
1-20 fiscal year must be an amount equal to:
1-21 (1) at least three percent but not more than six
1-22 percent of the market value of the permanent school fund on the
1-23 first day of that fiscal year, in accordance with the rate adopted
1-24 by a vote of two-thirds of the total membership of the State Board
2-1 of Education; or
2-2 (2) five percent of the market value of the permanent
2-3 school fund on the first day of that fiscal year, if the State
2-4 Board of Education does not adopt a rate under Subdivision (1) of
2-5 this subsection.
2-6 (b) The available school fund shall be applied annually to
2-7 the support of the public free schools. Except as provided by this
2-8 section, no law shall ever be enacted appropriating any part of the
2-9 permanent or available school fund to any other purpose whatever;
2-10 nor shall the same, or any part thereof ever be appropriated to or
2-11 used for the support of any sectarian school. The[; and the]
2-12 available school fund [herein provided] shall be distributed to the
2-13 several school districts [counties] according to their scholastic
2-14 population and applied in such manner as may be provided by law.
2-15 If the total amount to be distributed from the permanent to the
2-16 available school fund and the education excellence supplemental
2-17 fund under Subsection (a) of this section for a fiscal year,
2-18 together with all taxes or other amounts dedicated to the available
2-19 school fund for that fiscal year, is sufficient, the distribution
2-20 from the available school fund to a school district for that fiscal
2-21 year must equal the distribution from the available school fund
2-22 that the school district received for the state fiscal year
2-23 beginning September 1, 2001, adjusted as provided by general law
2-24 for inflation and changes in the district's scholastic population.
2-25 If the total amount to be distributed under Subsection (a) of this
2-26 section for a fiscal year, together with taxes or other amounts
2-27 dedicated to the available school fund for that fiscal year, is not
3-1 sufficient to make distributions to school districts as required by
3-2 this subsection, the total amount distributed under Subsection (a)
3-3 of this section for that fiscal year must be distributed to the
3-4 available school fund for distribution to the several school
3-5 districts according to their scholastic population.
3-6 (c) The education excellence supplemental fund consists of
3-7 the difference between the total amount distributed from the
3-8 permanent school fund under Subsection (a) of this section, less
3-9 the amount required, after including all taxes or other amounts
3-10 dedicated to the available school fund, to permit making the
3-11 distributions from the available school fund required under
3-12 Subsection (b) of this section. The education excellence
3-13 supplemental fund may be used only as directed by the legislature
3-14 and only for a purpose related to improving public education,
3-15 including the provision of a group health insurance program for
3-16 active or retired employees of the public schools.
3-17 (d) [(b)] The legislature by law may provide for using the
3-18 permanent school fund [and the income from the permanent school
3-19 fund] to guarantee bonds issued by school districts or by the state
3-20 for the purpose of making loans to or purchasing the bonds of
3-21 school districts for the purpose of acquisition, construction, or
3-22 improvement of instructional facilities including all furnishings
3-23 thereto. If any payment is required to be made by the permanent
3-24 school fund as a result of its guarantee of bonds issued by the
3-25 state, an amount equal to this payment shall be immediately paid by
3-26 the state from the treasury to the permanent school fund. An
3-27 amount owed by the state to the permanent school fund under this
4-1 section shall be a general obligation of the state until paid. The
4-2 amount of bonds authorized hereunder shall not exceed $750 million
4-3 or a higher amount authorized by a two-thirds record vote of both
4-4 houses of the legislature. If the proceeds of bonds issued by the
4-5 state are used to provide a loan to a school district and the
4-6 district becomes delinquent on the loan payments, the amount of the
4-7 delinquent payments shall be offset against state aid to which the
4-8 district is otherwise entitled.
4-9 (e) [(c)] The legislature may appropriate part of the
4-10 permanent [available] school fund for administration of the
4-11 permanent school fund or of a bond guarantee program established
4-12 under this section.
4-13 (f) [(d)] Notwithstanding any other provision of this
4-14 constitution, in managing the assets of the permanent school fund,
4-15 the State Board of Education may acquire, exchange, sell,
4-16 supervise, manage, or retain, through procedures and subject to
4-17 restrictions it establishes and in amounts it considers
4-18 appropriate, any kind of investment, including investments in the
4-19 Texas growth fund created by Article XVI, Section 70, of this
4-20 constitution, that persons of ordinary prudence, discretion, and
4-21 intelligence, exercising the judgment and care under the
4-22 circumstances then prevailing, acquire or retain for their own
4-23 account in the management of their affairs, not in regard to
4-24 speculation but in regard to the permanent disposition of their
4-25 funds, considering the probable income as well as the probable
4-26 safety of their capital.
4-27 (g) Notwithstanding Subsection (a)(1) of this section, the
5-1 total distribution from the permanent school fund to the available
5-2 school fund and the education excellence supplemental fund for the
5-3 state fiscal years beginning September 1, 2002, and September 1,
5-4 2003, must be an amount equal to five percent of the market value
5-5 of the permanent school fund on the first day of the appropriate
5-6 fiscal year. This subsection expires December 1, 2004.
5-7 SECTION 2. This proposed constitutional amendment shall be
5-8 submitted to the voters at an election to be held November 6, 2001.
5-9 The ballot shall be printed to permit voting for or against the
5-10 proposition: "The constitutional amendment relating to making
5-11 distributions from the permanent school fund to the available
5-12 school fund and to the creation of the education excellence
5-13 supplemental fund."