82R5073 CAE-D
By: Howard of Travis H.J.R. No. 85
A JOINT RESOLUTION
proposing a constitutional amendment to create the Permanent School
Fund Management Council to assume the duty of the State Board of
Education to manage the permanent school fund.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 49-b(h), Article III, Texas
Constitution, is amended to read as follows:
(h) Lands purchased and comprising a part of the Veterans'
Land Fund are declared to be held for a governmental purpose, but
the individual purchasers of those lands shall be subject to
taxation to the same extent and in the same manner as are purchasers
of lands dedicated to the Permanent [Free Public] School Fund. The
lands shall be sold to veterans in quantities, on terms, at prices,
and at fixed, variable, floating, or other rates of interest,
determined by the Board and in accordance with rules of the Board.
Notwithstanding any provisions of this section to the contrary,
lands in the Veterans' Land Fund that are offered for sale to
veterans and that are not sold may be sold or resold to the
purchasers in quantities, on terms, at prices, and at rates of
interest determined by the Board and in accordance with rules of the
Board.
SECTION 2. Sections 2 and 4, Article VII, Texas
Constitution, are amended to read as follows:
Sec. 2. 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 [perpetual public] school fund.
Sec. 4. The lands herein set apart to the Permanent [Public
Free] 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 [Public Free] School fund as provided by law
or the proceeds shall be invested [by the comptroller of public
accounts, as may be directed] by the Permanent School Fund
Management Council [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. Sections 5(a) and (f), Article VII, Texas
Constitution, are amended to read as follows:
(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. The available school fund consists of the distributions
made to it from the total return on all investment 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, 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 Permanent School Fund Management Council, with the approval
of a majority vote of the total membership of the State Board of
Education, taken before the regular session of the legislature
convenes; or
(B) the legislature by general law or
appropriation, if the Permanent School Fund Management Council
[State Board of Education] does not adopt a rate or the State Board
of Education does not approve 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.
(f) Notwithstanding any other provision of this
constitution, in managing the assets of the permanent school fund,
the Permanent School Fund Management Council [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.
SECTION 4. Article VII, Texas Constitution, is amended by
adding Section 5a to read as follows:
Sec. 5a. The legislature shall provide by law for a
Permanent School Fund Management Council to manage the permanent
school fund. Members of the council must have substantial
institutional investment expertise or institutional financial
management experience. Members of the council are appointed or
elected as provided by the legislature for terms determined by the
legislature. The council shall perform the duties prescribed by
law.
SECTION 5. This proposed constitutional amendment shall be
submitted to the voters at an election to be held November 8, 2011.
The ballot shall be printed to permit voting for or against the
proposition: "The constitutional amendment to create the Permanent
School Fund Management Council, composed of members with
substantial institutional investment expertise or institutional
financial management experience, to assume the duty of the State
Board of Education to manage the permanent school fund."