By: Taylor S.J.R. No. 78
 
 
 
   
 
 
 
A JOINT RESOLUTION
  proposing a constitutional amendment relating to the permanent
  school fund.
         BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2, Article VII, Texas Constitution, is
  amended to read as follows:
         Sec. 2.  PERMANENT SCHOOL FUND. (a) All funds, lands and
  other property heretofore set apart and appropriated for the
  support of public schools; all the alternate sections of land
  reserved by the State out of grants heretofore made or that may
  hereafter be made to railroads or other corporations of any nature
  whatsoever; one half of the public domain of the State; and all sums
  of money that may come to the State from the sale of any portion of
  the same, shall constitute a permanent school fund.
         (b)  The purpose of the permanent school fund is to maximize
  available revenue distributions for the education of students
  enrolled in the state's public education system.
         SECTION 2.  Section 4, Article VII, Texas Constitution, is
  amended to read as follows:
         Sec. 4.  SALE OF PERMANENT SCHOOL FUND LANDS; INVESTMENT OF
  PROCEEDS. The lands herein set apart to the Permanent School fund,
  shall be sold under such regulations, at such times, and on such
  terms as may be prescribed by law; and the Legislature shall not
  have power to grant any relief to purchasers thereof. The proceeds
  of such sales must be used to acquire other land for the Permanent
  School fund as provided by law or the proceeds shall be invested by
  the comptroller of public accounts, as [may be] directed by the
  entity designated by the Legislature to manage the assets of the
  Permanent School fund [Board of Education herein provided for], in
  the bonds of the United States, the State of Texas, or counties in
  said State, or in such other securities, and under such
  restrictions as may be prescribed by law; and the State shall be
  responsible for all investments.
         SECTION 3.  Section 5, Article VII, Texas Constitution, is
  amended to read as follows:
         Sec. 5.  PERMANENT SCHOOL FUND, [AND] AVAILABLE SCHOOL FUND,
  AND BICENTENNIAL EDUCATION FUND: COMPOSITION, MANAGEMENT, USE, AND
  DISTRIBUTION. (a) The permanent school fund consists of all land
  appropriated for public schools by this constitution or the other
  laws of this state, other properties belonging to the permanent
  school fund, [and] all revenue derived from the land or other
  properties, and all revenue otherwise deposited into the fund.
         (a-1)  The available school fund consists of the
  distributions made to it from the total return on select [all]
  investment assets of and net revenue deposits into the permanent
  school fund as directed by the entity designated by the legislature
  to manage the assets of the permanent school fund, the taxes
  authorized by this constitution or general law to be part of the
  available school fund, and appropriations made to the available
  school fund by the legislature. The total amount distributed from
  the permanent school fund to the available school fund:
               (1)  in each year of a state fiscal biennium must be an
  amount that is not more than six percent of the average of the
  market value of the permanent school fund, excluding real property
  belonging to the fund that is managed, sold, or acquired under
  Section 4 of this article, but including discretionary real assets
  investments and cash in the state treasury derived from property
  belonging to the fund, on the last day of each of the 16 state fiscal
  quarters preceding the regular session of the legislature that
  begins before that state fiscal biennium, in accordance with the
  rate adopted by:
                     (A)  a vote of two-thirds of the total membership
  of the entity designated by the legislature to manage the assets of
  the permanent school fund [State Board of Education], taken before
  the regular session of the legislature convenes; or
                     (B)  the legislature by general law or
  appropriation, if the entity designated by the legislature to
  manage the assets of the permanent school fund [State Board of
  Education] does not adopt a rate as provided by Paragraph (A) of
  this subdivision; and
               (2)  over the 10-year period consisting of the current
  state fiscal year and the nine preceding state fiscal years may not
  exceed the total return on all investment assets of the permanent
  school fund over the same 10-year period.
         (a-2)  The bicentennial education fund consists of the
  distributions made to it from the total return on select investment
  assets of and net revenue deposits into the permanent school fund as
  directed by the entity designated by the legislature to manage the
  assets of the permanent school fund, the taxes authorized by this
  constitution or general law to be part of the bicentennial
  education fund, and appropriations made to the bicentennial
  education fund by the legislature.
         (a-3)  The entity designated by the legislature to manage the
  assets of the permanent school fund shall coordinate distributions
  under subsections (a-1) and (a-2) as necessary to ensure
  sufficient funding is available to guarantee bonds issued under
  subsection (d).
         (b)  The expenses of managing permanent school fund land and
  investments shall be paid by appropriation from the permanent
  school fund.
         (c)  The available school fund and bicentennial education
  fund shall be applied annually to the support of the public free
  schools. Except as provided by this section, the legislature may
  not enact a law appropriating any part of the permanent school fund,
  [or] available school fund, or bicentennial education fund to any
  other purpose. The permanent school fund, [and] the available
  school fund, and the bicentennial education fund may not be
  appropriated to or used for the support of any sectarian school. The
  available school fund shall be distributed to the several counties
  according to their scholastic population and applied in the manner
  provided by law. The bicentennial education fund shall be
  distributed to school districts for the purposes of providing
  funding for merit-based teacher pay and for incentivizing
  scholastic achievement among historically underperforming student
  groups in the manner provided by law.
         (d)  The legislature by law may provide for using the
  permanent school fund to guarantee bonds issued by school districts
  or by the state for the purpose of making loans to or purchasing the
  bonds of school districts for the purpose of acquisition,
  construction, or improvement of instructional facilities including
  all furnishings thereto. If any payment is required to be made by
  the permanent school fund as a result of its guarantee of bonds
  issued by the state, an amount equal to this payment shall be
  immediately paid by the state from the treasury to the permanent
  school fund. An amount owed by the state to the permanent school
  fund under this section shall be a general obligation of the state
  until paid. The amount of bonds authorized hereunder shall not
  exceed $750 million or a higher amount authorized by a two-thirds
  record vote of both houses of the legislature. If the proceeds of
  bonds issued by the state are used to provide a loan to a school
  district and the district becomes delinquent on the loan payments,
  the amount of the delinquent payments shall be offset against state
  aid to which the district is otherwise entitled.
         (e)  The legislature may appropriate part of the available
  school fund for administration of a bond guarantee program
  established under this section.
         (f)  Notwithstanding any other provision of this
  constitution, in managing the assets of the permanent school fund,
  the entity designated by the legislature to manage the assets of the
  permanent school fund [State Board of Education] may acquire,
  exchange, sell, supervise, manage, or retain, through procedures
  and subject to restrictions it establishes and in amounts it
  considers appropriate, any kind of investment [, including
  investments in the Texas growth fund created by Article XVI,
  Section 70, of this constitution,] that persons of ordinary
  prudence, discretion, and intelligence, exercising the judgment
  and care under the circumstances then prevailing, acquire or retain
  for their own account in the management of their affairs, not in
  regard to speculation but in regard to the permanent disposition of
  their funds, considering the probable income as well as the
  probable safety of their capital.
         [(g)     Notwithstanding any other provision of this
  constitution or of a statute, the General Land Office or an entity
  other than the State Board of Education that has responsibility for
  the management of permanent school fund land or other properties
  may in its sole discretion distribute to the available school fund
  each year revenue derived during that year from the land or
  properties, not to exceed $300 million each year.]
         SECTION 4.  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 relating to the
  creation of the Bicentennial Education Fund, the dedication of
  funds for teacher pay and historically underperforming student
  groups, and the transfer of the management and investment of the
  permanent school fund to an entity designated by the legislature."