86R3247 KJE-F
 
  By: Capriglione H.B. No. 20
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the allocation of certain constitutional transfers of
  money to the economic stabilization fund, the Texas legacy fund,
  and the state highway fund and to the management and investment of
  the economic stabilization fund, the Texas legacy fund, and the
  Texas legacy distribution fund.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Subchapter H, Chapter 316,
  Government Code, is amended to read as follows:
  SUBCHAPTER H. ALLOCATIONS OF CERTAIN CONSTITUTIONAL TRANSFERS OF
  MONEY [PRESERVATION OF SUFFICIENT BALANCE IN ECONOMIC
  STABILIZATION FUND]
         SECTION 2.  Section 316.093, Government Code, is amended by
  amending Subsections (a), (b), (e), and (f) and adding Subsections
  (e-1) and (e-2) to read as follows:
         (a)  Before the comptroller makes transfers for a state
  fiscal year in accordance with Section 49-g(c), Article III, Texas
  Constitution, the comptroller shall determine whether the sum of
  the unappropriated balance of the fund on the preceding August 31
  and[,] any projected transfer to the fund under Section 49-g(b) of
  that article[, and any projected transfer to the fund under Section
  49-g(c) of that article] in accordance with the allocations for the
  transfer as provided by Section 49-g(b-2) [49-g(c-1)] of that
  article is less than the sufficient balance determined as provided
  by [adopted under] Section 404.074 [316.092].
         (b)  If the sum described by Subsection (a) is less than the
  sufficient balance determined as provided by [adopted under]
  Section 404.074 [316.092], the comptroller shall reduce in equal
  amounts the allocations [allocation] to the Texas legacy fund and 
  the state highway fund provided by Section 49-g(c), Article III,
  Texas Constitution, and increase the allocation to the economic
  stabilization fund, in an [equal] amount equal to the reduction in
  the allocations, until the sufficient balance determined as
  provided by [adopted under] Section 404.074 [316.092] is achieved.
         (e)  For the purposes of Section 49-g(c-2), Article III,
  Texas Constitution, the comptroller shall adjust the allocation
  provided by Section 49-g(c-1) of that article of amounts to be
  transferred to the fund, the Texas legacy fund, and [to] the state
  highway fund under Section 49-g(c) of that article in a state fiscal
  year beginning on or after September 1, 2025, as provided by
  Subsections (e-1) and (e-2) of this section [so that the total of
  those amounts is transferred to the economic stabilization fund],
  except that the comptroller shall reduce a transfer made under
  Subsection (e-2) of this section to the economic stabilization fund
  [this subsection] as necessary to prevent the amount in the fund
  from exceeding the limit in effect for that biennium under Section
  49-g(g), Article III, Texas Constitution [of that article].
         (e-1)  If at the time the comptroller makes the transfer
  under Section 49-g(c), Article III, Texas Constitution, the sum
  described by Subsection (a) of this section is equal to or greater
  than the sufficient balance determined as provided by Section
  404.074, the comptroller shall allocate to the Texas legacy fund
  the total of the amounts required to be transferred as provided by
  Section 49-g(c), Article III, Texas Constitution.
         (e-2)  If at the time the comptroller makes the transfer
  under Section 49-g(c), Article III, Texas Constitution, the sum
  described by Subsection (a) of this section is less than the
  sufficient balance determined as provided by Section 404.074, the
  comptroller shall allocate:
               (1)  to the fund an amount equal to the lesser of:
                     (A)  the amount that, when added to the sum
  described by Subsection (a), is necessary to make the
  unappropriated balance of the fund equal to the sufficient balance;
  and
                     (B)  the total of the amounts required to be
  transferred as provided by Section 49-g(c), Article III, Texas
  Constitution; and
               (2)  to the Texas legacy fund an amount equal to the
  remainder, if any, of the total of the amounts required to be
  transferred as provided by Section 49-g(c), Article III, Texas
  Constitution.
         (f)  Subsection [Subsections (a),] (b)[, and (c)] and this
  subsection expire December 31, 2024.
         SECTION 3.  The heading to Section 404.0241, Government
  Code, is amended to read as follows:
         Sec. 404.0241.  COMPUTATION [INVESTMENT] OF [CERTAIN]
  ECONOMIC STABILIZATION FUND BALANCE [BALANCES].
         SECTION 4.  Subchapter C, Chapter 404, Government Code, is
  amended by adding Sections 404.02411, 404.02412, 404.02413, and
  404.02414 to read as follows:
         Sec. 404.02411.  MANAGEMENT AND INVESTMENT OF ECONOMIC
  STABILIZATION FUND, TEXAS LEGACY FUND, AND TEXAS LEGACY
  DISTRIBUTION FUND. (a) This section applies only to the following
  funds:
               (1)  the economic stabilization fund;
               (2)  the Texas legacy fund; and
               (3)  the Texas legacy distribution fund.
         (b)  Notwithstanding Section 404.024, in managing the assets
  of a fund to which this section applies, the comptroller, through
  procedures and subject to restrictions the comptroller establishes
  for each fund and in amounts the comptroller considers appropriate
  for each fund, may acquire, exchange, sell, supervise, manage, or
  retain any kind of investment that a prudent investor exercising
  reasonable care, skill, and caution would acquire, exchange, sell,
  supervise, manage, or retain in light of the purposes, terms,
  distribution requirements, and other circumstances then prevailing
  for the fund, taking into consideration the investment of all the
  assets of the fund rather than a single investment.
         (c)  The comptroller may pool assets of a fund to which this
  section applies with other state funds for purposes of investment
  under Section 404.024(b).
         Sec. 404.02412.  INVESTMENT OBJECTIVES AND PURPOSES OF
  ECONOMIC STABILIZATION FUND. The investment objectives and
  purposes of the economic stabilization fund are to preserve:
               (1)  the fund's principal;
               (2)  the purchasing power of the fund's principal; and
               (3)  the liquidity of the fund.
         Sec. 404.02413.  INVESTMENT OBJECTIVES AND PURPOSES OF TEXAS
  LEGACY FUND. The investment objectives and purposes of the Texas
  legacy fund are to generate earnings on the fund's principal to:
               (1)  maintain the purchasing power of that principal
  and if possible, increase that purchasing power; and
               (2)  provide for predictable and stable annual earnings
  transfers to the Texas legacy distribution fund.
         Sec. 404.02414.  INVESTMENT OBJECTIVE AND PURPOSE OF TEXAS
  LEGACY DISTRIBUTION FUND. The investment objective and purpose of
  the Texas legacy distribution fund is to maintain sufficient
  liquidity to meet the needs of the fund.
         SECTION 5.  Subchapter E, Chapter 404, Government Code, is
  amended by adding Section 404.074 to read as follows:
         Sec. 404.074.  SUFFICIENT BALANCE OF ECONOMIC STABILIZATION
  FUND. For the purpose of making the transfers of money required by
  Section 49-g, Article III, Texas Constitution, on or after the
  first day but before the 90th day of a state fiscal year, the
  comptroller shall determine for that fiscal year the amount of the
  sufficient balance of the economic stabilization fund. The amount
  of the sufficient balance is equal to seven percent of the certified
  general revenue-related appropriations for the state fiscal
  biennium during which the determination is made.
         SECTION 6.  The following provisions of the Government Code
  are repealed:
               (1)  Section 316.092;
               (2)  Section 316.093(c); and
               (3)  Sections 404.0241(a), (b), and (d).
         SECTION 7.  This Act takes effect January 1, 2020, but only
  if the constitutional amendment providing for the creation of the
  Texas legacy fund and the Texas legacy distribution fund,
  dedicating earnings on the Texas legacy distribution fund to
  certain state infrastructure projects or the reduction of certain
  long-term obligations, and providing for the transfer of certain
  general revenues to the economic stabilization fund, the Texas
  legacy fund, and the state highway fund, proposed by __.J.R. No.
  ___, 86th Legislature, Regular Session, 2019, is approved by the
  voters. If that amendment is not approved by the voters, this Act
  has no effect.