Texas 2017 - 85th Regular

Texas House Bill HJR110 Compare Versions

Only one version of the bill is available at this time.

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1	1	85R12263 JSA-D
2	2	By: Alvarado H.J.R. No. 110
3	3
4	4
5	5	A JOINT RESOLUTION
6	6	proposing a constitutional amendment to establish permanent funds
7	7	for the support of state institutions and agencies of higher
8	8	education that do not participate in funding from the permanent
9	9	university fund.
10	10	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Article VII, Texas Constitution, is amended by
12	12	adding Sections 21 and 22 to read as follows:
13	13	Sec. 21. (a) The permanent university fund II is
14	14	established as a trust fund outside the state treasury to provide
15	15	for the maintenance and support of the University of Houston System
16	16	and the Texas Tech University System and the institutions of higher
17	17	education within those systems.
18	18	(b) The permanent university fund II is managed by the
19	19	boards of regents of the University of Houston System and the Texas
20	20	Tech University System acting jointly. The boards of regents by
21	21	agreement may designate a public or private entity to manage the
22	22	fund, including a nonprofit corporation created by the boards to
23	23	manage the fund on their behalf. If the boards of regents have not
24	24	designated an entity to manage the fund, the comptroller of public
25	25	accounts shall manage the fund at the direction of the boards of
26	26	regents.
27	27	(c) The permanent university fund II consists of:
28	28	(1) money transferred to the fund from the permanent
29	29	university fund under Subsection (d) of this section;
30	30	(2) any other money or asset transferred or deposited
31	31	to the credit of the fund by the legislature or under this
32	32	constitution; and
33	33	(3) any increase in the value of or income from the
34	34	assets of the fund.
35	35	(d) At the end of each state fiscal biennium beginning with
36	36	the biennium ending August 31, 2019, the comptroller shall
37	37	determine the total value of the permanent university fund as of
38	38	that date plus the total amount of distributions made from the fund
39	39	in that biennium. If the total amount determined by the comptroller
40	40	for a state fiscal biennium exceeds the total value of the permanent
41	41	university fund as of August 31, 2017, plus the total amount of
42	42	distributions made from the permanent university fund in the state
43	43	fiscal biennium ending August 31, 2017, the comptroller shall
44	44	promptly transfer from the permanent university fund to the
45	45	permanent university fund II an amount equal to 99 percent of the
46	46	excess amount.
47	47	(e) Unless otherwise provided by this section, the
48	48	provisions of this constitution governing the investment of the
49	49	permanent university fund apply to the investment of the permanent
50	50	university fund II.
51	51	(f) The available university fund II consists of the
52	52	distributions made to it from the total return on all investment
53	53	assets of the permanent university fund II. The amount of any
54	54	distributions to the available university fund II shall be
55	55	determined jointly by the boards of regents of the University of
56	56	Houston System and the Texas Tech University System in a manner
57	57	intended to provide the available university fund II with a stable
58	58	and predictable stream of annual distributions and to maintain over
59	59	time the purchasing power of permanent university fund II
60	60	investments and annual distributions to the available university
61	61	fund II, taking into account any transfers from the permanent
62	62	university fund II to the permanent university fund III required by
63	63	Section 22 of this article. The amount distributed to the available
64	64	university fund II in a state fiscal year must be not less than the
65	65	amount needed to pay the principal and interest due and owing in
66	66	that fiscal year on bonds and notes issued under this section. If
67	67	the purchasing power of permanent university fund II investments
68	68	for any rolling 10-year period is not preserved, the boards of
69	69	regents may not increase annual distributions to the available
70	70	university fund II until the purchasing power of the permanent
71	71	university fund II investments is restored, except as necessary to
72	72	pay the principal and interest due and owing on bonds and notes
73	73	issued under this section. An annual distribution made to the
74	74	available university fund II during any state fiscal year may not
75	75	exceed an amount equal to seven percent of the average net fair
76	76	market value of permanent university fund II investment assets as
77	77	determined by the boards of regents, except as necessary to pay any
78	78	principal and interest due and owing on bonds and notes issued under
79	79	this section. The expenses of managing permanent university fund
80	80	II land and investments shall be paid by the permanent university
81	81	fund II.
82	82	(g) The boards of regents of the University of Houston
83	83	System and the Texas Tech University System may not make any
84	84	distributions to the available university fund II until a state
85	85	fiscal biennium that begins after the first state fiscal biennium
86	86	in which the total value of the permanent university fund II, as
87	87	determined by the comptroller, equals or exceeds the total value of
88	88	the permanent university fund as of August 31, 2017, plus the total
89	89	amount of distributions made from the permanent university fund in
90	90	the state fiscal biennium ending August 31, 2017. As soon as
91	91	practicable after the comptroller makes that determination, the
92	92	comptroller shall make an equitable distribution of the land in the
93	93	permanent university fund between the permanent university fund and
94	94	the permanent university fund II so that the value of the land and
95	95	related mineral interests in each fund are substantially equal, and
96	96	shall transfer funds from the permanent university fund II to the
97	97	permanent university fund equal to the value of the land and related
98	98	mineral interests transferred to the permanent university fund II
99	99	under this subsection.
100	100	(h) The Board of Regents of the University of Houston System
101	101	may issue bonds and notes not to exceed a total amount of 15 percent
102	102	of the cost value of the investments and other assets of the
103	103	permanent university fund II (exclusive of real estate) at the time
104	104	of the issuance of the bonds and notes, and may pledge all or any
105	105	part of its interest in the available university fund II to secure
106	106	the payment of the principal and interest of those bonds and notes,
107	107	for the purpose of acquiring land either with or without permanent
108	108	improvements, constructing and equipping buildings or other
109	109	permanent improvements, major repair and rehabilitation of
110	110	buildings and other permanent improvements, acquiring capital
111	111	equipment and library books and library materials, and refunding
112	112	bonds or notes issued under this section or other law for the
113	113	University of Houston System administration and any component
114	114	institution of higher education of the system.
115	115	(i) The Board of Regents of the Texas Tech University System
116	116	may issue bonds and notes not to exceed a total amount of 15 percent
117	117	of the cost value of the investments and other assets of the
118	118	permanent university fund II (exclusive of real estate) at the time
119	119	of the issuance of the bonds and notes, and may pledge all or any
120	120	part of its interest in the available university fund II to secure
121	121	the payment of the principal and interest of those bonds and notes,
122	122	for the purpose of acquiring land either with or without permanent
123	123	improvements, constructing and equipping buildings or other
124	124	permanent improvements, major repair and rehabilitation of
125	125	buildings and other permanent improvements, acquiring capital
126	126	equipment and library books and library materials, and refunding
127	127	bonds or notes issued under this section or other law for the Texas
128	128	Tech University System administration and any component
129	129	institution of higher education of the system.
130	130	(j) An institution of higher education that receives
131	131	funding under Section 17 of this article in a state fiscal year may
132	132	not participate in the funding provided by this section in that
133	133	year.
134	134	(k) The proceeds of the bonds or notes issued under this
135	135	section may not be used for the purpose of constructing, equipping,
136	136	repairing, or rehabilitating buildings or other permanent
137	137	improvements that are to be used for student housing,
138	138	intercollegiate athletics, or auxiliary enterprises.
139	139	(l) The bonds and notes issued under this section shall be
140	140	payable solely out of the available university fund II, mature
141	141	serially or otherwise in not more than 30 years from their
142	142	respective dates, and, except for refunding bonds, be sold only
143	143	through competitive bidding. All of these bonds and notes are
144	144	subject to approval by the attorney general and when so approved are
145	145	incontestable. The permanent university fund II may be invested in
146	146	these bonds and notes.
147	147	(m) To assure efficient use of construction funds and the
148	148	orderly development of physical plants to accommodate the state's
149	149	real need, the legislature may provide for the approval or
150	150	disapproval of all new construction projects at the institutions
151	151	entitled to participate in the funding provided by this section
152	152	except the University of Houston and Texas Tech University.
153	153	(n) The state systems and institutions of higher education
154	154	that receive funds under this section in a state fiscal year may not
155	155	receive any funds from the general revenue of the state in that
156	156	fiscal year for acquiring land with or without permanent
157	157	improvements, for constructing or equipping buildings or other
158	158	permanent improvements, or for major repair and rehabilitation of
159	159	buildings or other permanent improvements except that:
160	160	(1) in the case of fire or natural disaster the
161	161	legislature may appropriate from the general revenue an amount
162	162	sufficient to replace the uninsured loss of any building or other
163	163	permanent improvement; and
164	164	(2) the legislature, by two-thirds vote of each house,
165	165	may, in cases of demonstrated need, which need must be clearly
166	166	expressed in the body of the act, appropriate general revenue funds
167	167	for acquiring land with or without permanent improvements, for
168	168	constructing or equipping buildings or other permanent
169	169	improvements, or for major repair and rehabilitation of buildings
170	170	or other permanent improvements.
171	171	(o) This section is self-enacting and the comptroller shall
172	172	do all things necessary to effectuate this section. This section
173	173	does not impair any obligation created by the issuance of bonds or
174	174	notes in accordance with prior law, and all outstanding bonds and
175	175	notes shall be paid in full, both principal and interest, in
176	176	accordance with their terms, and nothing in this section shall
177	177	affect the pledges made in connection with such bonds or notes
178	178	previously issued. If the provisions of this section conflict with
179	179	any other provision of this constitution, then the provisions of
180	180	this section shall prevail, notwithstanding any such conflicting
181	181	provisions.
182	182	Sec. 22. (a) The comptroller of public accounts shall
183	183	establish the permanent university fund III as a trust fund outside
184	184	the state treasury. The legislature shall use the fund to provide a
185	185	permanent source of funding for the maintenance and support of
186	186	state institutions of higher education that do not benefit from the
187	187	funding provided by the permanent university fund or the permanent
188	188	university fund II.
189	189	(b) Subject to Subsection (c), beginning with the next state
190	190	fiscal biennium after the comptroller determines that, as of the
191	191	end of a state fiscal biennium, the total value of the permanent
192	192	university fund II equals or exceeds the total value of the
193	193	permanent university fund as of August 31, 2017, plus the total
194	194	amount of distributions made from the permanent university fund in
195	195	the state fiscal biennium ending August 31, 2017:
196	196	(1) the transfers from the permanent university fund
197	197	to the permanent university fund II under Section 21(d) of this
198	198	article shall cease, and the amount, if any, that would otherwise be
199	199	transferred from the permanent university fund in each subsequent
200	200	state fiscal biennium under Section 21(d) shall be transferred to
201	201	the permanent university fund III; and
202	202	(2) an amount equal to 99 percent of the amount by
203	203	which the total value of the permanent university fund II at the end
204	204	of a subsequent state fiscal biennium plus the total amount of
205	205	distributions made from the permanent university fund II in that
206	206	biennium exceeds the total value of the permanent university fund
207	207	as of August 31, 2017, plus the total amount of distributions made
208	208	from the permanent university fund in the state fiscal biennium
209	209	ending August 31, 2017, if any, shall be transferred from the
210	210	permanent university fund II to the permanent university fund III.
211	211	(c) If at the end of a state fiscal biennium the total value
212	212	of the permanent university fund III plus the amount of all
213	213	distributions made from the fund in that biennium is equal to or
214	214	exceeds the total value of the permanent university fund as of
215	215	August 31, 2017, plus the total amount of distributions made from
216	216	the permanent university fund in the state fiscal biennium ending
217	217	August 31, 2017, then in each subsequent state fiscal biennium the
218	218	transfers from the permanent university fund and the permanent
219	219	university fund II under Subsection (a) of this section shall
220	220	cease.
221	221	SECTION 2. Section 18(e), Article VII, Texas Constitution,
222	222	is amended to read as follows:
223	223	(e) The available university fund consists of the
224	224	distributions made to it from the total return on all investment
225	225	assets of the permanent university fund, including the net income
226	226	attributable to the surface of permanent university fund land. The
227	227	amount of any distributions to the available university fund shall
228	228	be determined by the board of regents of The University of Texas
229	229	System in a manner intended to provide the available university
230	230	fund with a stable and predictable stream of annual distributions
231	231	and to maintain over time the purchasing power of permanent
232	232	university fund investments and annual distributions to the
233	233	available university fund, taking into account any transfers from
234	234	the permanent university fund to the permanent university fund II
235	235	or permanent university fund III required by Section 21 or 22 of
236	236	this article. The amount distributed to the available university
237	237	fund in a fiscal year must be not less than the amount needed to pay
238	238	the principal and interest due and owing in that fiscal year on
239	239	bonds and notes issued under this section. If the purchasing power
240	240	of permanent university fund investments for any rolling 10-year
241	241	period is not preserved, the board may not increase annual
242	242	distributions to the available university fund until the purchasing
243	243	power of the permanent university fund investments is restored,
244	244	except as necessary to pay the principal and interest due and owing
245	245	on bonds and notes issued under this section. An annual
246	246	distribution made by the board to the available university fund
247	247	during any fiscal year may not exceed an amount equal to seven
248	248	percent of the average net fair market value of permanent
249	249	university fund investment assets as determined by the board,
250	250	except as necessary to pay any principal and interest due and owing
251	251	on bonds issued under this section. The expenses of managing
252	252	permanent university fund land and investments shall be paid by the
253	253	permanent university fund.
254	254	SECTION 3. This proposed constitutional amendment shall be
255	255	submitted to the voters at an election to be held November 7, 2017.
256	256	The ballot shall be printed to permit voting for or against the
257	257	proposition: "The constitutional amendment to establish permanent
258	258	funds for the support of state institutions and agencies of higher
259	259	education that do not participate in funding from the permanent
260	260	university fund."