SRC-TAG, VRA S.B. 206 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 206
78R2214 ESH-DBy: Ellis, Rodney
Education
4/10/2003
As Filed


DIGEST AND PURPOSE 

Since 1990, the permanent school fund (PSF) has grown by more than 100
percent with a significant increase in both realized and unrealized
capital gains.  However, the benefit to schools of the available school
fund (ASF), which consists of certain income deriving from the PSF and
motor fuel taxes, has remained flat, and appears to be declining.  As
proposed, S.B. 206 allows PSF to be managed under a total return approach
to allow the fund to benefit from capital gains.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Sections 43.001(a) and (b), Education Code, as follows: 

(a)  Provides an exception to the provisions of this subsection regarding
the composition of the permanent school fund (PSF). 

(b)  Changes the composition of the available school fund (ASF) by adding
the distributions to the fund from the permanent school fund as provided
by Section 5(a), Article VII, Texas Constitution, and by deleting interest
and dividends arising from any securities or funds belonging to the PSF,
all interest derivable from the proceeds of the sale of land set apart for
the PSF, and all money derived from the lease of land belonging to the
PSF, as components of the ASF. 

SECTION 2.  Amends Section 43.002, Education Code, to read as follows:

Sec.  43.002.  New heading:  TRANSFERS FROM PERMANENT SCHOOL FUND AND
GENERAL REVENUE FUND TO AVAILABLE SCHOOL FUND.  (a)  Requires the
comptroller of public accounts, on the first working day of each month in
a state fiscal year, to transfer from the permanent school fund to the
available school fund an amount equal to one-twelfth of the annual
distribution from the permanent school fund to the available school fund
as determined by the comptroller under Section 5(a), Article VII, Texas
Constitution, for the fiscal year.  

  (b)  Creates this subsection from existing text.      

SECTION 3.  Repealer:  Section 43.008, Education Code (Treatment of
Premium and Discount). 

SECTION 4.  Provides that this Act takes effect September 1, 2004, but
only if the constitutional amendment proposed by the 78th Legislature,
Regular Session, 2003, relating to the use of income and appreciation of
the permanent school fund, is approved by the voters.  Provides that if
the proposed constitutional amendment is not approved by the voters, this
Act has no effect.