87S20046 KJE-D
By: Burrows H.J.R. No. 24
A JOINT RESOLUTION
proposing a constitutional amendment reducing The University of
Texas System's share of the income and other benefits of the
permanent university fund, transferring to the national research
university fund and general revenue fund a portion of the annual
distribution made from the permanent university fund to the
available university fund, and dedicating the portion transferred
to the general revenue fund to provide for the support and
maintenance of public institutions of higher education.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 17(c), Article VII, Texas Constitution,
is amended to read as follows:
(c) Pursuant to a two-thirds vote of the membership of each
house of the legislature, institutions of higher education may be
created at a later date by general law, and, when created, such an
institution shall be entitled to participate in the funding
provided by this section if it is not created as a part of The
University of Texas System or The Texas A&M University System. An
institution that is entitled to participate in dedicated funding
provided by [Article VII,] Section 18[,] of this article, other
than funding transferred to the national research university fund
or general revenue fund under that section, [constitution] may not
be entitled to participate in the funding provided by this section.
SECTION 2. Sections 18(b), (e), and (f), Article VII, Texas
Constitution, are amended to read as follows:
(b) The Board of Regents of The University of Texas System
may issue bonds and notes not to exceed a total amount of 10 [20]
percent of the cost value of investments and other assets of the
permanent university fund (exclusive of real estate) at the time of
issuance thereof, and may pledge all or any part of its one-third
[two-thirds] interest in the available university fund 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 prior law, at or for The
University of Texas System administration and the following
component institutions of the system:
(1) The University of Texas at Arlington;
(2) The University of Texas at Austin;
(3) The University of Texas at Dallas;
(4) The University of Texas at El Paso;
(5) The University of Texas of the Permian Basin;
(6) The University of Texas at San Antonio;
(7) The University of Texas at Tyler;
(8) The University of Texas Health Science Center at
Dallas;
(9) The University of Texas Medical Branch at
Galveston;
(10) The University of Texas Health Science Center at
Houston;
(11) The University of Texas Health Science Center at
San Antonio;
(12) The University of Texas System Cancer Center;
(13) The University of Texas Health Center at Tyler;
and
(14) The University of Texas Institute of Texan
Cultures at San Antonio.
(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. 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 and to meet
any obligation under this section that amounts be transferred in
that fiscal year to the national research university fund and the
general revenue fund. 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.
(f) Out of one-third of the annual distribution from the
permanent university fund to the available university fund, there
shall be appropriated an annual sum sufficient to pay the principal
and interest due on the bonds and notes issued by the Board of
Regents of The Texas A&M University System under this section and
prior law, and the remainder of that one-third of the annual
distribution to the available university fund shall be appropriated
to the Board of Regents of The Texas A&M University System which
shall have the authority and duty in turn to appropriate an
equitable portion of the same for the support and maintenance of The
Texas A&M University System administration, Texas A&M University,
and Prairie View A&M University. The Board of Regents of The Texas
A&M University System, in making just and equitable appropriations
to Texas A&M University and Prairie View A&M University, shall
exercise its discretion with due regard to such criteria as the
board may deem appropriate from year to year. Out of one third [the
other two-thirds] of the annual distribution from the permanent
university fund to the available university fund there shall be
appropriated an annual sum sufficient to pay the principal and
interest due on the bonds and notes issued by the Board of Regents
of The University of Texas System under this section and prior law,
and the remainder of that one-third [such two-thirds] of the annual
distribution to the available university fund, shall be
appropriated for the support and maintenance of The University of
Texas at Austin and The University of Texas System administration.
Out of the remaining one-third of the annual distribution from the
permanent university fund to the available university fund, the
Board of Regents of The University of Texas System, in the manner
prescribed by the comptroller of public accounts, shall annually
transfer:
(1) 25 percent of that one-third to the national
research university fund established under Section 20 of this
article; and
(2) 75 percent of that one-third to the general
revenue fund, to be appropriated only for the support and
maintenance of public institutions of higher education according to
equitable formulas prescribed by law.
SECTION 3. The following temporary provision is added to
the Texas Constitution:
TEMPORARY PROVISION. (a) This temporary provision applies to
the constitutional amendment proposed by the 87th Legislature, 2nd
Called Session, 2021, reducing The University of Texas System's
share of the income and other benefits of the permanent university
fund, transferring to the national research university fund and
general revenue fund a portion of the annual distribution made from
the permanent university fund to the available university fund, and
dedicating the portion transferred to the general revenue fund to
provide for the support and maintenance of public institutions of
higher education.
(b) The amendment to Section 18, Article VII, of this
constitution does not impair any obligation created by the issuance
of bonds or notes by the board of regents of The University of Texas
System in accordance with that section before May 7, 2022, and all
outstanding bonds and notes validly issued by the board under that
section remain valid, enforceable, and binding and shall be paid in
full, both principal and interest, in accordance with their terms
and from the sources pledged to their payment. In order to ensure
that the amendment of that section does not impair any obligation
created by the issuance of those bonds and notes, notwithstanding
the amendments to Subsections (e) and (f) of that section:
(1) the amount allocated for appropriation to The
University of Texas System for a state fiscal year under Subsection
(f) of that section shall be increased, if necessary, to the amount
necessary to pay the principal and interest due and owing during
that fiscal year on those bonds and notes; and
(2) the amounts allocated for transfer to the national
research university fund and the general revenue fund for a state
fiscal year under Subsection (f) of that section shall be
proportionately reduced by a total amount equal to the amount, if
any, by which the amount allocated for appropriation to The
University of Texas System is increased under Subdivision (1) of
this subsection for that fiscal year.
(c) This section expires June 1, 2052.
SECTION 4. This proposed constitutional amendment shall be
submitted to the voters at an election to be held May 7, 2022. The
ballot shall be printed to permit voting for or against the
proposition: "The constitutional amendment reducing The
University of Texas System's share of the income and other benefits
of the permanent university fund, transferring to the national
research university fund and general revenue fund a portion of the
annual distribution made from the permanent university fund to the
available university fund, and dedicating the portion transferred
to the general revenue fund to provide for the support and
maintenance of public institutions of higher education."