Bill Text: TX HJR110 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Proposing a constitutional amendment to establish permanent funds for the support of state institutions and agencies of higher education that do not participate in funding from the permanent university fund.

Spectrum: Slight Partisan Bill (Democrat 4-2)

Status: (Introduced) 2017-05-03 - Left pending in committee [HJR110 Detail]

Download: Texas-2017-HJR110-Introduced.html
  85R12263 JSA-D
 
  By: Alvarado H.J.R. No. 110
 
 
 
A JOINT RESOLUTION
  proposing a constitutional amendment to establish permanent funds
  for the support of state institutions and agencies of higher
  education that do not participate in funding from the permanent
  university fund.
         BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Article VII, Texas Constitution, is amended by
  adding Sections 21 and 22 to read as follows:
         Sec. 21.  (a)  The permanent university fund II is
  established as a trust fund outside the state treasury to provide
  for the maintenance and support of the University of Houston System
  and the Texas Tech University System and the institutions of higher
  education within those systems.
         (b)  The permanent university fund II is managed by the
  boards of regents of the University of Houston System and the Texas
  Tech University System acting jointly. The boards of regents by
  agreement may designate a public or private entity to manage the
  fund, including a nonprofit corporation created by the boards to
  manage the fund on their behalf. If the boards of regents have not
  designated an entity to manage the fund, the comptroller of public
  accounts shall manage the fund at the direction of the boards of
  regents.
         (c)  The permanent university fund II consists of:
               (1)  money transferred to the fund from the permanent
  university fund under Subsection (d) of this section; 
               (2)  any other money or asset transferred or deposited
  to the credit of the fund by the legislature or under this
  constitution; and
               (3)  any increase in the value of or income from the
  assets of the fund.
         (d)  At the end of each state fiscal biennium beginning with
  the biennium ending August 31, 2019, the comptroller shall
  determine the total value of the permanent university fund as of
  that date plus the total amount of distributions made from the fund
  in that biennium. If the total amount determined by the comptroller
  for a state fiscal biennium exceeds the total value of the permanent
  university fund as of August 31, 2017, plus the total amount of
  distributions made from the permanent university fund in the state
  fiscal biennium ending August 31, 2017, the comptroller shall
  promptly transfer from the permanent university fund to the
  permanent university fund II an amount equal to 99 percent of the
  excess amount.
         (e)  Unless otherwise provided by this section, the
  provisions of this constitution governing the investment of the
  permanent university fund apply to the investment of the permanent
  university fund II.
         (f)  The available university fund II consists of the
  distributions made to it from the total return on all investment
  assets of the permanent university fund II. The amount of any
  distributions to the available university fund II shall be
  determined jointly by the boards of regents of the University of
  Houston System and the Texas Tech University System in a manner
  intended to provide the available university fund II with a stable
  and predictable stream of annual distributions and to maintain over
  time the purchasing power of permanent university fund II
  investments and annual distributions to the available university
  fund II, taking into account any transfers from the permanent
  university fund II to the permanent university fund III required by
  Section 22 of this article. The amount distributed to the available
  university fund II in a state fiscal year must be not less than the
  amount needed to pay the principal and interest due and owing in
  that fiscal year on bonds and notes issued under this section. If
  the purchasing power of permanent university fund II investments
  for any rolling 10-year period is not preserved, the boards of
  regents may not increase annual distributions to the available
  university fund II until the purchasing power of the permanent
  university fund II investments is restored, except as necessary to
  pay the principal and interest due and owing on bonds and notes
  issued under this section. An annual distribution made to the
  available university fund II during any state fiscal year may not
  exceed an amount equal to seven percent of the average net fair
  market value of permanent university fund II investment assets as
  determined by the boards of regents, except as necessary to pay any
  principal and interest due and owing on bonds and notes issued under
  this section. The expenses of managing permanent university fund
  II land and investments shall be paid by the permanent university
  fund II.
         (g)  The boards of regents of the University of Houston
  System and the Texas Tech University System may not make any
  distributions to the available university fund II until a state
  fiscal biennium that begins after the first state fiscal biennium
  in which the total value of the permanent university fund II, as
  determined by the comptroller, equals or exceeds the total value of
  the permanent university fund as of August 31, 2017, plus the total
  amount of distributions made from the permanent university fund in
  the state fiscal biennium ending August 31, 2017. As soon as
  practicable after the comptroller makes that determination, the
  comptroller shall make an equitable distribution of the land in the
  permanent university fund between the permanent university fund and
  the permanent university fund II so that the value of the land and
  related mineral interests in each fund are substantially equal, and
  shall transfer funds from the permanent university fund II to the
  permanent university fund equal to the value of the land and related
  mineral interests transferred to the permanent university fund II
  under this subsection.
         (h)  The Board of Regents of the University of Houston System
  may issue bonds and notes not to exceed a total amount of 15 percent
  of the cost value of the investments and other assets of the
  permanent university fund II (exclusive of real estate) at the time
  of the issuance of the bonds and notes, and may pledge all or any
  part of its interest in the available university fund II to secure
  the payment of the principal and interest of those bonds and notes,
  for the purpose of acquiring land either with or without permanent
  improvements, constructing and equipping buildings or other
  permanent improvements, major repair and rehabilitation of
  buildings and other permanent improvements, acquiring capital
  equipment and library books and library materials, and refunding
  bonds or notes issued under this section or other law for the
  University of Houston System administration and any component
  institution of higher education of the system.
         (i)  The Board of Regents of the Texas Tech University System
  may issue bonds and notes not to exceed a total amount of 15 percent
  of the cost value of the investments and other assets of the
  permanent university fund II (exclusive of real estate) at the time
  of the issuance of the bonds and notes, and may pledge all or any
  part of its interest in the available university fund II to secure
  the payment of the principal and interest of those bonds and notes,
  for the purpose of acquiring land either with or without permanent
  improvements, constructing and equipping buildings or other
  permanent improvements, major repair and rehabilitation of
  buildings and other permanent improvements, acquiring capital
  equipment and library books and library materials, and refunding
  bonds or notes issued under this section or other law for the Texas
  Tech University System administration and any component
  institution of higher education of the system.
         (j)  An institution of higher education that receives
  funding under Section 17 of this article in a state fiscal year may
  not participate in the funding provided by this section in that
  year.
         (k)  The proceeds of the bonds or notes issued under this
  section may not be used for the purpose of constructing, equipping,
  repairing, or rehabilitating buildings or other permanent
  improvements that are to be used for student housing,
  intercollegiate athletics, or auxiliary enterprises.
         (l)  The bonds and notes issued under this section shall be
  payable solely out of the available university fund II, mature
  serially or otherwise in not more than 30 years from their
  respective dates, and, except for refunding bonds, be sold only
  through competitive bidding. All of these bonds and notes are
  subject to approval by the attorney general and when so approved are
  incontestable. The permanent university fund II may be invested in
  these bonds and notes.
         (m)  To assure efficient use of construction funds and the
  orderly development of physical plants to accommodate the state's
  real need, the legislature may provide for the approval or
  disapproval of all new construction projects at the institutions
  entitled to participate in the funding provided by this section
  except the University of Houston and Texas Tech University.
         (n)  The state systems and institutions of higher education
  that receive funds under this section in a state fiscal year may not
  receive any funds from the general revenue of the state in that
  fiscal year for acquiring land with or without permanent
  improvements, for constructing or equipping buildings or other
  permanent improvements, or for major repair and rehabilitation of
  buildings or other permanent improvements except that:
               (1)  in the case of fire or natural disaster the
  legislature may appropriate from the general revenue an amount
  sufficient to replace the uninsured loss of any building or other
  permanent improvement; and
               (2)  the legislature, by two-thirds vote of each house,
  may, in cases of demonstrated need, which need must be clearly
  expressed in the body of the act, appropriate general revenue funds
  for acquiring land with or without permanent improvements, for
  constructing or equipping buildings or other permanent
  improvements, or for major repair and rehabilitation of buildings
  or other permanent improvements.
         (o)  This section is self-enacting and the comptroller shall
  do all things necessary to effectuate this section. This section
  does not impair any obligation created by the issuance of bonds or
  notes in accordance with prior law, and all outstanding bonds and
  notes shall be paid in full, both principal and interest, in
  accordance with their terms, and nothing in this section shall
  affect the pledges made in connection with such bonds or notes
  previously issued. If the provisions of this section conflict with
  any other provision of this constitution, then the provisions of
  this section shall prevail, notwithstanding any such conflicting
  provisions.
         Sec. 22.  (a)  The comptroller of public accounts shall
  establish the permanent university fund III as a trust fund outside
  the state treasury. The legislature shall use the fund to provide a
  permanent source of funding for the maintenance and support of
  state institutions of higher education that do not benefit from the
  funding provided by the permanent university fund or the permanent
  university fund II.
         (b)  Subject to Subsection (c), beginning with the next state
  fiscal biennium after the comptroller determines that, as of the
  end of a state fiscal biennium, the total value of the permanent
  university fund II equals or exceeds the total value of the
  permanent university fund as of August 31, 2017, plus the total
  amount of distributions made from the permanent university fund in
  the state fiscal biennium ending August 31, 2017:
               (1)  the transfers from the permanent university fund
  to the permanent university fund II under Section 21(d) of this
  article shall cease, and the amount, if any, that would otherwise be
  transferred from the permanent university fund in each subsequent
  state fiscal biennium under Section 21(d) shall be transferred to
  the permanent university fund III; and
               (2)  an amount equal to 99 percent of the amount by
  which the total value of the permanent university fund II at the end
  of a subsequent state fiscal biennium plus the total amount of
  distributions made from the permanent university fund II in that
  biennium exceeds the total value of the permanent university fund
  as of August 31, 2017, plus the total amount of distributions made
  from the permanent university fund in the state fiscal biennium
  ending August 31, 2017, if any, shall be transferred from the
  permanent university fund II to the permanent university fund III.
         (c)  If at the end of a state fiscal biennium the total value
  of the permanent university fund III plus the amount of all
  distributions made from the fund in that biennium is equal to or
  exceeds the total value of the permanent university fund as of
  August 31, 2017, plus the total amount of distributions made from
  the permanent university fund in the state fiscal biennium ending
  August 31, 2017, then in each subsequent state fiscal biennium the
  transfers from the permanent university fund and the permanent
  university fund II under Subsection (a) of this section shall
  cease.
         SECTION 2.  Section 18(e), Article VII, Texas Constitution,
  is amended to read as follows:
         (e)  The available university fund consists of the
  distributions made to it from the total return on all investment
  assets of the permanent university fund, including the net income
  attributable to the surface of permanent university fund land. The
  amount of any distributions to the available university fund shall
  be determined by the board of regents of The University of Texas
  System in a manner intended to provide the available university
  fund with a stable and predictable stream of annual distributions
  and to maintain over time the purchasing power of permanent
  university fund investments and annual distributions to the
  available university fund, taking into account any transfers from
  the permanent university fund to the permanent university fund II
  or permanent university fund III required by Section 21 or 22 of
  this article. The amount distributed to the available university
  fund in a fiscal year must be not less than the amount needed to pay
  the principal and interest due and owing in that fiscal year on
  bonds and notes issued under this section. If the purchasing power
  of permanent university fund investments for any rolling 10-year
  period is not preserved, the board may not increase annual
  distributions to the available university fund until the purchasing
  power of the permanent university fund investments is restored,
  except as necessary to pay the principal and interest due and owing
  on bonds and notes issued under this section. An annual
  distribution made by the board to the available university fund
  during any fiscal year may not exceed an amount equal to seven
  percent of the average net fair market value of permanent
  university fund investment assets as determined by the board,
  except as necessary to pay any principal and interest due and owing
  on bonds issued under this section. The expenses of managing
  permanent university fund land and investments shall be paid by the
  permanent university fund.
         SECTION 3.  This proposed constitutional amendment shall be
  submitted to the voters at an election to be held November 7, 2017.
  The ballot shall be printed to permit voting for or against the
  proposition: "The constitutional amendment to establish permanent
  funds for the support of state institutions and agencies of higher
  education that do not participate in funding from the permanent
  university fund."
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