By: Howard H.B. No. 5227
A BILL TO BE ENTITLED
AN ACT
relating to the allocation of certain constitutional transfers of
money to the economic stabilization fund, the Texas legacy fund,
and the state highway fund and to the management and investment of
the economic stabilization fund, the Texas legacy fund, and the
Texas legacy distribution fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subchapter H, Chapter 316,
Government Code, is amended to read as follows:
SUBCHAPTER H. ALLOCATIONS OF CERTAIN CONSTITUTIONAL TRANSFERS OF
MONEY [ALLOCATION OF TRANSFERS TO ECONOMIC STABILIZATION FUND AND
STATE HIGHWAY FUND]
SECTION 2. Section 316.093, Government Code, is amended to
read as follows:
Sec. 316.093. ADJUSTMENT OF CONSTITUTIONAL ALLOCATIONS TO
FUND AND STATE HIGHWAY FUND. (a) Before the comptroller makes
transfers for a state fiscal year in accordance with Section
49-g(c), Article III, Texas Constitution, the comptroller shall
determine whether the sum of the unappropriated balance of the fund
on the preceding August 31[,] and any projected transfer to the fund
under Section 49-g(b) of that article[, and any projected transfer
to the fund under Section 49-g(c) of that article] in accordance
with the allocations for the transfer as provided by Section
49-g(b-2) [49-g(c-1)] of that article is less than the sufficient
balance determined as provided by Section 404.074 [amount
determined under Section 316.092 for that state fiscal biennium].
(b) For the purposes of Section 49-g(c-2), Article III,
Texas Constitution, if [If] the sum described by Subsection (a) is
less than the amount determined as provided by Section 404.074
[under Section 316.092] for that state fiscal biennium, the
comptroller shall reduce the allocation to the Texas legacy [state
highway] fund provided by Section 49-g(c), Article III, Texas
Constitution, and increase the allocation to the economic
stabilization fund, in an [equal] amount equal to the reduction in
the allocation to the Texas legacy fund, until the sufficient
balance determined as provided by Section 404.074 is achieved
[amount determined under Section 316.092 for that state fiscal
biennium would be achieved by the transfer to the fund or the total
amount of the sum described by Section 49-g(c), Article III, Texas
Constitution, is allocated to the fund, whichever occurs first].
(c) For the purposes of Section 49-g(c-2), Article III,
Texas Constitution, the comptroller shall adjust the allocation
provided by Section 49-g(c-1) of that article of amounts to be
transferred to the fund, to the Texas legacy fund, and to the state
highway fund under Section 49-g(c) of that article in a state fiscal
year beginning on or after September 1, 2035, as provided by
Subsections (c-1), (c-2), and (c-3) of this section [so that the
total of those amounts is transferred to the economic stabilization
fund], except that the comptroller shall reduce a transfer made
under Subsection (c-2) and (c-3) of this section to the economic
stabilization fund [this subsection] as necessary to prevent the
amount in the fund from exceeding the limit in effect for that
biennium under Section 49-g(g), Article III, Texas Constitution [of
that article].
(c-1) For a state fiscal year to which Subsection (c)
applies, if at the time the comptroller makes the transfer under
Section 49-g(c), Article III, Texas Constitution, the sum described
by Subsection (a) of this section is equal to or greater than the
sufficient balance determined as provided by Section 404.074, the
comptroller shall allocate to the Texas legacy fund the total of the
amounts required to be transferred as provided by Section 49-g(c),
Article III, Texas Constitution.
(c-2) For a state fiscal year to which Subsection (c)
applies, if at the time the comptroller makes the transfer under
Section 49-g(c), Article III, Texas Constitution, the sum described
by Subsection (a) of this section is less than the sufficient
balance determined as provided by Section 404.074, the comptroller
shall allocate:
(1) to the fund an amount equal to the lesser of:
(A) the amount that, when added to the sum
described by Subsection (a), is necessary to make the
unappropriated balance of the fund equal to the sufficient balance;
and
(B) the total of the amounts required to be
transferred as provided by Section 49-g(c), Article III, Texas
Constitution; and
(2) to the Texas legacy fund an amount equal to the
remainder, if any, of the total of the amounts required to be
transferred as provided by Section 49-g(c), Article III, Texas
Constitution.
(c-3) Each time the comptroller, as provided by Section
49-g(b) or (c), Article III, Texas Constitution, reduces an amount
of general revenue that otherwise is to be transferred to the
economic stabilization fund, the comptroller shall allocate to the
credit of the state debt retirement account an amount of general
revenue equal to the amount by which the comptroller reduced the
amount of the transfer to the economic stabilization fund.
(d) Subsection [Subsections (a) and] (b) and this
subsection expire December 31, 2034.
SECTION 3. The heading to Section 404.0241, Government
Code, is amended to read as follows:
Sec. 404.0241. COMPUTATION [INVESTMENT] OF [CERTAIN]
ECONOMIC STABILIZATION FUND BALANCE [BALANCES].
SECTION 4. Subchapter C, Chapter 404, Government Code, is
amended by adding Sections 404.02411, 404.02412, 404.02413, and
404.02414 to read as follows:
Sec. 404.02411. MANAGEMENT AND INVESTMENT OF ECONOMIC
STABILIZATION FUND, TEXAS LEGACY FUND, AND TEXAS LEGACY
DISTRIBUTION FUND. (a) This section applies only to the following
funds:
(1) the economic stabilization fund;
(2) the Texas legacy fund; and
(3) the Texas legacy distribution fund.
(b) Notwithstanding Section 404.024, in managing the assets
of a fund to which this section applies, the comptroller, through
procedures and subject to restrictions the comptroller establishes
for each fund and in amounts the comptroller considers appropriate
for each fund, may acquire, exchange, sell, supervise, manage, or
retain any kind of investment that a prudent investor exercising
reasonable care, skill, and caution would acquire, exchange, sell,
supervise, manage, or retain in light of the purposes, terms,
distribution requirements, and other circumstances then prevailing
for the fund, taking into consideration the investment of all the
assets of the fund rather than a single investment.
(c) The comptroller may pool assets of a fund to which this
section applies with other state funds for purposes of investment
under Section 404.024(b).
Sec. 404.02412. INVESTMENT OBJECTIVES AND PURPOSES OF
ECONOMIC STABILIZATION FUND. The investment objectives and
purposes of the economic stabilization fund are to preserve:
(1) the fund's principal;
(2) the purchasing power of the fund's principal; and
(3) the liquidity of the fund.
Sec. 404.02413. INVESTMENT OBJECTIVES AND PURPOSES OF TEXAS
LEGACY FUND. The investment objectives and purposes of the Texas
legacy fund are to generate earnings on the fund's principal to:
(1) maintain the purchasing power of that principal
and if possible, increase that purchasing power; and
(2) provide for predictable and stable annual earnings
transfers to the Texas legacy distribution fund.
Sec. 404.02414. INVESTMENT OBJECTIVE AND PURPOSE OF TEXAS
LEGACY DISTRIBUTION FUND. The investment objective and purpose of
the Texas legacy distribution fund is to maintain sufficient
liquidity to meet the needs of the fund.
SECTION 5. Subchapter E, Chapter 404, Government Code, is
amended by adding Section 404.074 to read as follows:
Sec. 404.074. SUFFICIENT BALANCE OF ECONOMIC STABILIZATION
FUND. For the purpose of making the transfers of money required by
Section 49-g, Article III, Texas Constitution, on or after the
first day but before the 90th day of a state fiscal year, the
comptroller shall determine for that fiscal year the amount of the
sufficient balance of the economic stabilization fund. The amount
of the sufficient balance is equal to seven percent of the certified
general revenue-related appropriations for the state fiscal
biennium during which the determination is made.
SECTION 6. The following provisions of the Government Code
are repealed:
(1) Section 316.092; and
(2) Sections 404.0241(a), (b), and (d).
SECTION 7. This Act takes effect January 1, 2024, but only
if the constitutional amendment providing for the creation of the
Texas legacy fund and the Texas legacy distribution fund,
dedicating the Texas legacy distribution fund to certain state
infrastructure projects or the reduction of certain long-term
obligations, and providing for the transfer of certain general
revenues to the economic stabilization fund, the Texas legacy fund,
and the state highway fund is approved by the voters. If that
amendment is not approved by the voters, this Act has no effect.