Bill Text: TX HJR42 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Proposing a constitutional amendment for the creation of an endowment fund for this state and for the retention, transfer, or appropriation of fund assets, including investment earnings received on fund assets.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-04-24 - Left pending in subcommittee [HJR42 Detail]
Download: Texas-2019-HJR42-Introduced.html
86R3561 KJE-D | ||
By: Metcalf | H.J.R. No. 42 |
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proposing a constitutional amendment for the creation of an | ||
endowment fund for this state and for the retention, transfer, or | ||
appropriation of fund assets, including investment earnings | ||
received on fund assets. | ||
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Article III, Texas Constitution, is amended by | ||
adding Section 49-g-1 to read as follows: | ||
Sec. 49-g-1. (a) In this section: | ||
(1) "Investment earnings" includes interest earned on | ||
assets. | ||
(2) "Texas-based business entity" means a business | ||
entity: | ||
(A) incorporated or otherwise formed under the | ||
laws of this state; or | ||
(B) the headquarters or other principal office of | ||
which is located in this state. | ||
(b) The endowment fund is created as a special fund in the | ||
state treasury outside the general revenue fund to generate | ||
investment earnings on endowment fund assets for transfer to other | ||
state funds, accounts, and purposes. | ||
(c) The endowment fund consists of: | ||
(1) money or other assets deposited to or otherwise | ||
transferred to the credit of the fund as provided by law; and | ||
(2) investment earnings received on fund assets, | ||
except to the extent amounts of those earnings are transferred from | ||
the fund in accordance with this section. | ||
(d) The comptroller shall invest the endowment fund assets | ||
separately from other treasury assets and funds. In managing the | ||
endowment fund assets, on behalf of the fund the comptroller: | ||
(1) shall ensure that at least 10 percent of the amount | ||
of invested fund assets is invested in Texas-based business | ||
entities; and | ||
(2) may acquire, exchange, sell, supervise, manage, or | ||
retain any kind of investment that a prudent investor, exercising | ||
reasonable care, skill, and caution, would acquire or retain in | ||
light of the purposes, terms, distribution requirements, and other | ||
circumstances of the fund then prevailing, taking into | ||
consideration: | ||
(A) the investment of all the fund assets rather | ||
than a single investment; and | ||
(B) the goal of preserving the aggregate | ||
purchasing power of the fund assets. | ||
(e) In each state fiscal year beginning on or after | ||
September 1, 2040, and at the same time the comptroller makes the | ||
transfers to the economic stabilization fund as required by Section | ||
49-g of this article, the comptroller shall transfer from the | ||
endowment fund the following amounts of the average amount of | ||
yearly investment earnings received in the five preceding state | ||
fiscal years from the investment of endowment fund assets: | ||
(1) an amount equal to 25 percent of those earnings to | ||
the general revenue fund; | ||
(2) an amount equal to five percent of those earnings | ||
to the economic stabilization fund, except as provided by | ||
Subsection (h) of this section; | ||
(3) an amount equal to 10 percent of those earnings to | ||
the foundation school fund or a successor fund or account from which | ||
grants are provided to school districts in this state to guarantee | ||
that each school district in this state has: | ||
(A) adequate resources to provide each eligible | ||
student a basic instructional program and facilities suitable to | ||
the student's educational needs; and | ||
(B) access to a substantially equalized program | ||
of financing in excess of basic costs for certain services; and | ||
(4) an amount equal to 10 percent of those earnings to | ||
the property tax relief fund or a successor fund or account the | ||
primary purpose of which is to reduce school district ad valorem | ||
maintenance and operations tax rates. | ||
(e-1) In each state fiscal year beginning on or after | ||
September 1, 2030, and at the same time the comptroller makes the | ||
transfers to the economic stabilization fund as required by Section | ||
49-g of this article, the comptroller shall transfer from the | ||
endowment fund to the general revenue fund an amount equal to 15 | ||
percent of the average amount of yearly investment earnings | ||
received in the five preceding state fiscal years from the | ||
investment of endowment fund assets, and the comptroller shall | ||
transfer from the endowment fund to the economic stabilization fund | ||
five percent of the average amount of those yearly investment | ||
earnings, except as provided by Subsection (h) of this section. | ||
This subsection expires August 31, 2040. | ||
(e-2) Not later than the 90th day of each state fiscal year | ||
beginning on or after September 1, 2020, the comptroller shall | ||
transfer from the endowment fund to the general revenue fund an | ||
amount equal to 10 percent of: | ||
(1) in the state fiscal year beginning September 1, | ||
2020, the total amount of investment earnings received in the | ||
preceding state fiscal year from the investment of endowment fund | ||
assets; | ||
(2) in the state fiscal year beginning September 1, | ||
2021, the average amount of yearly investment earnings received in | ||
the two preceding state fiscal years from the investment of | ||
endowment fund assets; | ||
(3) in the state fiscal year beginning September 1, | ||
2022, the average amount of yearly investment earnings received in | ||
the three preceding state fiscal years from the investment of | ||
endowment fund assets; | ||
(4) in the state fiscal year beginning September 1, | ||
2023, the average amount of yearly investment earnings received in | ||
the four preceding state fiscal years from the investment of | ||
endowment fund assets; and | ||
(5) in each subsequent state fiscal year, the average | ||
amount of yearly investment earnings received in the five preceding | ||
state fiscal years from the investment of endowment fund assets. | ||
(e-3) Subsection (e-2) and this subsection expire August | ||
31, 2030. | ||
(f) If a fund or account described by Subsection (e)(4) of | ||
this section does not exist, the comptroller shall transfer to the | ||
general revenue fund the amount otherwise required by Subsection | ||
(e)(4) of this section to be transferred. The transferred amount | ||
may be appropriated only to provide for the support of primary and | ||
secondary public education in this state. | ||
(g) The comptroller shall invest in the manner prescribed by | ||
Subsection (d) of this section the amounts of investment earnings | ||
on endowment fund assets that are not transferred from the fund in | ||
accordance with this section, subject to Subsection (i) of this | ||
section. | ||
(h) In the manner required by Section 49-g(c) of this | ||
article, the comptroller shall reduce the amounts of the transfers | ||
to the economic stabilization fund otherwise required by Section | ||
49-g of this article if making all of the transfers to that fund | ||
otherwise required by this section and Section 49-g of this article | ||
in a state fiscal year would result in the balance of that fund | ||
exceeding the limit under Section 49-g(g) of this article. If after | ||
making those reductions the transfer otherwise required by this | ||
section would result in an amount in that fund that exceeds the | ||
limit under Section 49-g(g) of this article, the comptroller shall: | ||
(1) reduce the amount of the transfer under this | ||
section by the amount necessary to avoid exceeding the limit; and | ||
(2) retain the amount of the reduction in the | ||
endowment fund. | ||
(i) The legislature may, by a two-thirds vote of the members | ||
of each house, appropriate money from the endowment fund at any time | ||
for any purpose. | ||
(j) On November 30, 2019, the comptroller shall transfer $1 | ||
billion from the economic stabilization fund to the endowment fund. | ||
This subsection expires January 1, 2021. | ||
SECTION 2. This proposed constitutional amendment shall be | ||
submitted to the voters at an election to be held November 5, 2019. | ||
The ballot shall be printed to permit voting for or against the | ||
proposition: "The constitutional amendment for the creation of an | ||
endowment fund for this state and for the retention, transfer, or | ||
appropriation of fund assets, including investment earnings | ||
received on fund assets." |