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 - Dead) 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 | |
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| 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." | ||
