78R2215 ESH-D

By:  Ellis                                                      S.J.R. No. 13 



A JOINT RESOLUTION

proposing a constitutional amendment relating to the use of income 
and appreciation 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 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 and other properties belonging to the permanent 
school fund.  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 in each 
fiscal year must be an amount equal to the lesser of:
		(1)  five percent of the average of:                                   
			(A)  the market value of the permanent school fund 
on the first day of that fiscal year; and
			(B)  the market value of the permanent school fund 
on the first day of the two preceding fiscal years; 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.
	(b)  The expenses of managing permanent school fund land and 
investments shall be paid by 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.
	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 relating to the use of 
income and appreciation of the permanent school fund."