The resolution would propose an amendment to Article VII of the Texas Constitution.
The proposed amendment would establish the Technical Institution Infrastructure Fund (TIIF) and the Available Workforce Education Fund (AWEF) as special funds in the state treasury for the purpose of providing funding for certain capital projects and equipment purchases related to career and technical education programs offered by the Texas State Technical College (TSTC) System and the Lamar Institute of Technology, Lamar State College - Orange, and Lamar State College - Port Arthur.
The amendment stipulates that the TIIF would consist of money transferred or deposited to the fund and any interest or other earnings of the fund and would be administered by the TSTC System board of regents in the manner and according to the standards utilized for investment of the Permanent University Fund. The Legislature could not appropriate money from the TIIF for any purpose.
The proposed amendment would require the Texas State Technical Colleges System board, each fiscal year, to distribute from the TIIF to the AWEF an amount at least equal to the amount necessary to pay debt service on bonds and notes backed by the TIIF and determined in a manner intended to provide the AWEF with a stable and predictable stream of annual distributions. The distribution could not exceed seven percent of the average net fair market value of the investment assets of the TIIF or, if the 10-year purchasing power of the TIIF was not maintained, the amount distributed in the preceding fiscal year. Out of the annual distribution from the TIIF to the AWEF, two-thirds are appropriated to the board of regents of the Texas State Technical College System, and one-third is appropriated to the board of regents of the Texas State University System. The amendment would provide that the annual TIIF distribution appropriated to the boards that was not spent during the fiscal year would be retained by the systems and could be spent in a subsequent fiscal year.
The proposed amendment would allow the Board of Regents for the Texas State Technical Colleges System to issue bonds and notes up to 20 percent of the cost value of the investments and other assets of the TIIF, other than real estate, and to pledge the system's two-thirds interest in the AWEF to secure the debt service on the bonds and notes. The Board of Regents for the Texas State University System would be permitted to issue bonds and notes up to 10 percent of the cost value of the investments and other assets of the TIIF, other than real estate, and to pledge the system's one-third interest in the AWEF to secure the debt service on the bonds and notes. Issued bonds and notes must be used for the purpose of supporting the system administration and career and technical education programs offered by component institutions of the TSTC System and for the Lamar Institute of Technology, Lamar State College - Orange, and Lamar State College - Port Arthur. Bonds and notes could be issued only to acquire land, construct and equip buildings or make other permanent improvements, conduct major repairs and rehabilitate buildings and to make other permanent improvements, acquire capital equipment, acquire library books and materials, and refund bonds or notes. The amendment would prohibit TIIF bonds or other money appropriated from the AWEF from being used to construct, equip, repair, or rehabilitate buildings or other permanent improvements that were to be used for intercollegiate athletics or auxiliary enterprises.
The proposed amendment would direct the Comptroller, on January 1, 2024, to transfer $1.5 billion of the unencumbered balance of the General Revenue Fund to the TIIF.
The proposed amendment would remove the TSTC System and its campuses and the Lamar Institute of Technology, Lamar State College - Orange, and Lamar State College - Port Arthur from Higher Education Fund (HEF) eligibility. The transfer of the TSTC System and the three Lamar State Colleges from HEF to TIIF, as provided by the proposed amendment, would apply with the fiscal year beginning September 1, 2025. Any HEF funds that would have been allocated to the TSTC System or the three named Lamar State Colleges as of that date would be allocated to other HEF-eligible institutions proportionally, until the Legislature or designated agency eliminated the TSTC System and the three Lamar State Colleges from the HEF allocations.
The proposed amendment would be submitted to voters at an election to be held November 7, 2023.