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A JOINT RESOLUTION
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proposing a constitutional amendment for the creation of an |
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endowment fund for this state and for the retention, transfer, or |
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appropriation of fund assets, including investment earnings |
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received on fund assets. |
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BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Article III, Texas Constitution, is amended by |
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adding Section 49-g-1 to read as follows: |
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Sec. 49-g-1. (a) In this section: |
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(1) "Investment earnings" includes interest earned on |
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assets. |
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(2) "Texas-based business entity" means a business |
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entity: |
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(A) incorporated or otherwise formed under the |
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laws of this state; or |
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(B) the headquarters or other principal office of |
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which is located in this state. |
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(b) The endowment fund is created as a special fund in the |
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state treasury outside the general revenue fund to generate |
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investment earnings on endowment fund assets for transfer to other |
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state funds, accounts, and purposes. |
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(c) The endowment fund consists of: |
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(1) money or other assets deposited to or otherwise |
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transferred to the credit of the fund as provided by law; and |
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(2) investment earnings received on fund assets, |
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except to the extent amounts of those earnings are transferred from |
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the fund in accordance with this section. |
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(d) The comptroller shall invest the endowment fund assets |
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separately from other treasury assets and funds. In managing the |
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endowment fund assets, on behalf of the fund the comptroller: |
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(1) shall ensure that at least 10 percent of the amount |
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of invested fund assets is invested in Texas-based business |
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entities; and |
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(2) may acquire, exchange, sell, supervise, manage, or |
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retain any kind of investment that a prudent investor, exercising |
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reasonable care, skill, and caution, would acquire or retain in |
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light of the purposes, terms, distribution requirements, and other |
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circumstances of the fund then prevailing, taking into |
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consideration: |
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(A) the investment of all the fund assets rather |
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than a single investment; and |
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(B) the goal of preserving the aggregate |
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purchasing power of the fund assets. |
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(e) In each state fiscal year beginning on or after |
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September 1, 2040, and at the same time the comptroller makes the |
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transfers to the economic stabilization fund as required by Section |
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49-g of this article, the comptroller shall transfer from the |
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endowment fund the following amounts of the average amount of |
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yearly investment earnings received in the five preceding state |
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fiscal years from the investment of endowment fund assets: |
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(1) an amount equal to 25 percent of those earnings to |
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the general revenue fund; |
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(2) an amount equal to five percent of those earnings |
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to the economic stabilization fund, except as provided by |
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Subsection (h) of this section; |
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(3) an amount equal to 10 percent of those earnings to |
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the foundation school fund or a successor fund or account from which |
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grants are provided to school districts in this state to guarantee |
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that each school district in this state has: |
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(A) adequate resources to provide each eligible |
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student a basic instructional program and facilities suitable to |
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the student's educational needs; and |
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(B) access to a substantially equalized program |
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of financing in excess of basic costs for certain services; and |
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(4) an amount equal to 10 percent of those earnings to |
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the property tax relief fund or a successor fund or account the |
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primary purpose of which is to reduce school district ad valorem |
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maintenance and operations tax rates. |
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(e-1) In each state fiscal year beginning on or after |
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September 1, 2030, and at the same time the comptroller makes the |
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transfers to the economic stabilization fund as required by Section |
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49-g of this article, the comptroller shall transfer from the |
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endowment fund to the general revenue fund an amount equal to 15 |
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percent of the average amount of yearly investment earnings |
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received in the five preceding state fiscal years from the |
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investment of endowment fund assets, and the comptroller shall |
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transfer from the endowment fund to the economic stabilization fund |
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five percent of the average amount of those yearly investment |
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earnings, except as provided by Subsection (h) of this section. |
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This subsection expires August 31, 2040. |
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(e-2) Not later than the 90th day of each state fiscal year |
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beginning on or after September 1, 2020, the comptroller shall |
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transfer from the endowment fund to the general revenue fund an |
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amount equal to 10 percent of: |
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(1) in the state fiscal year beginning September 1, |
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2020, the total amount of investment earnings received in the |
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preceding state fiscal year from the investment of endowment fund |
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assets; |
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(2) in the state fiscal year beginning September 1, |
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2021, the average amount of yearly investment earnings received in |
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the two preceding state fiscal years from the investment of |
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endowment fund assets; |
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(3) in the state fiscal year beginning September 1, |
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2022, the average amount of yearly investment earnings received in |
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the three preceding state fiscal years from the investment of |
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endowment fund assets; |
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(4) in the state fiscal year beginning September 1, |
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2023, the average amount of yearly investment earnings received in |
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the four preceding state fiscal years from the investment of |
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endowment fund assets; and |
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(5) in each subsequent state fiscal year, the average |
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amount of yearly investment earnings received in the five preceding |
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state fiscal years from the investment of endowment fund assets. |
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(e-3) Subsection (e-2) and this subsection expire August |
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31, 2030. |
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(f) If a fund or account described by Subsection (e)(4) of |
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this section does not exist, the comptroller shall transfer to the |
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general revenue fund the amount otherwise required by Subsection |
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(e)(4) of this section to be transferred. The transferred amount |
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may be appropriated only to provide for the support of primary and |
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secondary public education in this state. |
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(g) The comptroller shall invest in the manner prescribed by |
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Subsection (d) of this section the amounts of investment earnings |
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on endowment fund assets that are not transferred from the fund in |
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accordance with this section, subject to Subsection (i) of this |
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section. |
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(h) In the manner required by Section 49-g(c) of this |
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article, the comptroller shall reduce the amounts of the transfers |
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to the economic stabilization fund otherwise required by Section |
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49-g of this article if making all of the transfers to that fund |
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otherwise required by this section and Section 49-g of this article |
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in a state fiscal year would result in the balance of that fund |
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exceeding the limit under Section 49-g(g) of this article. If after |
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making those reductions the transfer otherwise required by this |
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section would result in an amount in that fund that exceeds the |
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limit under Section 49-g(g) of this article, the comptroller shall: |
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(1) reduce the amount of the transfer under this |
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section by the amount necessary to avoid exceeding the limit; and |
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(2) retain the amount of the reduction in the |
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endowment fund. |
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(i) The legislature may, by a two-thirds vote of the members |
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of each house, appropriate money from the endowment fund at any time |
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for any purpose. |
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(j) On November 30, 2019, the comptroller shall transfer $1 |
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billion from the economic stabilization fund to the endowment fund. |
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This subsection expires January 1, 2021. |
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SECTION 2. This proposed constitutional amendment shall be |
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submitted to the voters at an election to be held November 5, 2019. |
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The ballot shall be printed to permit voting for or against the |
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proposition: "The constitutional amendment for the creation of an |
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endowment fund for this state and for the retention, transfer, or |
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appropriation of fund assets, including investment earnings |
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received on fund assets." |