78R5189 ESH-F

By:  Hochberg                                                   H.J.R. No. 56 



A JOINT RESOLUTION

proposing a constitutional amendment relating to the distribution 
of the permanent school fund.
	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:                       
	SECTION 1.  Section 5, Article VII, Texas Constitution, is 
amended by amending Subsection (a) and adding Subsections (e), (f), 
and (g) to read as follows:
	(a)  The 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 the 
distribution from the permanent school fund as provided by 
Subsections (e) and (f) of this section [all the interest derivable 
therefrom and the taxes herein authorized and levied] shall be the 
available school fund.  The available school fund shall be applied 
annually to the support of the public free schools.  Except as 
provided by this section, no law shall ever be enacted 
appropriating any part of the permanent or available school fund to 
any other purpose whatever; nor shall the same, or any part thereof 
ever be appropriated to or used for the support of any sectarian 
school; and the available school fund herein provided shall be 
distributed to the several counties according to their scholastic 
population and applied in such manner as may be provided by law.
	(e)  The State Board of Education shall annually determine 
the total return, including income and net appreciation, on the 
permanent school fund. Notwithstanding any other provision of this 
constitution, except as provided by Subsection (f) of this section, 
the annual distribution of the available school fund is the lesser 
of the total return on the permanent school fund or an amount 
computed by multiplying the permanent school fund's market value at 
the end of the fiscal year by the adjusted average return on the 
permanent school fund.  For purposes of this subsection, the 
adjusted average return on the permanent school fund is the average 
of the total return on the fund for the preceding five years, as a 
percentage of the fund's market value, less the sum of the average 
annual inflation rate, as determined by the comptroller of public 
accounts, for the preceding five years, and the average annual rate 
of growth in student enrollment in this state for the preceding five 
years.
	(f)  The annual distribution from the available school fund 
may not be less than two percent of the average of the market value 
of the permanent school fund at the end of each of the five 
preceding fiscal years.
	(g)  The State Board of Education shall modify the 
distribution of the available school fund provided in this section 
as necessary only to comply with rulings of the federal Internal 
Revenue Service or any successor to that agency regarding the use of 
the permanent school fund and income from the permanent school fund 
to guarantee bonds as provided under Subsection (b) of this 
section.
	SECTION 2.  This proposed constitutional amendment shall be 
submitted to the voters at an election to be held November 4, 2003.  
The ballot shall be printed to permit voting for or against the 
proposition:  "The constitutional amendment providing for more 
efficient use of the permanent school fund."