Amend HJR 68 by adding appropriately numbered SECTIONS to
read as follows, and renumbering remaining SECTIONS accordingly:
SECTION ____. Section 5, Article VII, Texas Constitution,
is amended to read as follows:
Sec. 5. (a) The permanent school fund consists of all land
appropriated for public schools by this constitution or the other
laws of this state, other properties belonging to the permanent
school fund, and all revenue derived from the land or other
properties. The available school fund consists of the
distributions made to it from the total return on all investment
assets of [principal of all bonds and other funds, and the principal
arising from the sale of the lands hereinbefore set apart to said
school fund, shall be] the permanent school fund, [and all the
interest derivable therefrom and] the taxes [herein] authorized by
this constitution or general law to be part of [and levied shall be]
the available school fund, and appropriations made to the available
school fund by the legislature. The total amount distributed from
the permanent school fund to the available school fund:
(1) in each year of a state fiscal biennium must be an
amount that is not more than six percent of the average of the
market value of the permanent school fund, excluding real property
belonging to the fund that is managed, sold, or acquired under
Section 4 of this article, on the last day of each of the 16 state
fiscal quarters preceding the regular session of the legislature
that begins before that state fiscal biennium, in accordance with
the rate adopted by:
(A) a vote of two-thirds of the total membership
of the State Board of Education, taken before the regular session of
the legislature convenes; or
(B) the legislature by general law or
appropriation, if the State Board of Education does not adopt a rate
as provided by Paragraph (A) of this subdivision;
(2) over the ten-year period consisting of the current
state fiscal year and the nine preceding state fiscal years may not
exceed the total return on all investment assets of the permanent
school fund over the same ten-year period; and
(3) may not exceed a portion of the total return on all
investment assets of the permanent school fund such that the
portion of the total return retained in the permanent school fund is
sufficient, as determined by the comptroller of public accounts, to
preserve the purchasing power of the permanent school fund for the
current fiscal year and the next nine fiscal years.
(b) The expenses of managing permanent school fund land and
investments shall be paid by appropriation from the permanent
school fund.
(c) The available school fund shall be applied annually to
the support of the public free schools. Except as provided by this
section, the legislature may not enact a [no] law [shall ever be
enacted] appropriating any part of the permanent school fund or
available school fund to any other purpose. The permanent school
fund and the available school fund may not [whatever; nor shall the
same, or any part thereof ever] be appropriated to or used for the
support of any sectarian school. The[; and the] available school
fund [herein provided] shall be distributed to the several counties
according to their scholastic population and applied in the [such]
manner [as may be] provided by law.
(d) [(b)] The legislature by law may provide for using the
permanent school fund [and the income from the permanent school
fund] to guarantee bonds issued by school districts or by the state
for the purpose of making loans to or purchasing the bonds of school
districts for the purpose of acquisition, construction, or
improvement of instructional facilities including all furnishings
thereto. If any payment is required to be made by the permanent
school fund as a result of its guarantee of bonds issued by the
state, an amount equal to this payment shall be immediately paid by
the state from the treasury to the permanent school fund. An amount
owed by the state to the permanent school fund under this section
shall be a general obligation of the state until paid. The amount
of bonds authorized hereunder shall not exceed $750 million or a
higher amount authorized by a two-thirds record vote of both houses
of the legislature. If the proceeds of bonds issued by the state
are used to provide a loan to a school district and the district
becomes delinquent on the loan payments, the amount of the
delinquent payments shall be offset against state aid to which the
district is otherwise entitled.
(e) [(c)] The legislature may appropriate part of the
available school fund for administration of [the permanent school
fund or of] a bond guarantee program established under this
section.
(f) [(d)] Notwithstanding any other provision of this
constitution, in managing the assets of the permanent school fund,
the State Board of Education may acquire, exchange, sell,
supervise, manage, or retain, through procedures and subject to
restrictions it establishes and in amounts it considers
appropriate, any kind of investment, including investments in the
Texas growth fund created by Article XVI, Section 70, of this
constitution, that persons of ordinary prudence, discretion, and
intelligence, exercising the judgment and care under the
circumstances then prevailing, acquire or retain for their own
account in the management of their affairs, not in regard to
speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable
safety of their capital.
(g) Notwithstanding Subsection (a) of this section, the
total amount distributed from the permanent school fund to the
available school fund for the state fiscal years beginning
September 1, 2003, and September 1, 2004, must be an amount equal to
the lesser of:
(1) five percent of the average of the market value of
the permanent school fund, excluding real property belonging to the
fund that is managed, sold, or acquired under Section 4 of this
article, on the last day of each of the 16 state fiscal quarters
preceding the regular session of the 78th Legislature; or
(2) a portion of the total return on all investment
assets of the permanent school fund such that the portion of the
total return retained in the permanent school fund is sufficient,
as determined by the comptroller of public accounts, to preserve
the purchasing power of the permanent school fund for the current
fiscal year and the next nine fiscal years.
(h) Subsection (g) of this section and this subsection
expire December 1, 2006.
SECTION ____. This proposed constitutional amendment shall
be submitted to the voters at an election to be held September 13,
2003. The ballot shall be printed to permit voting for or against
the proposition: "The constitutional amendment relating to the use
of income and appreciation of the permanent school fund."