Bill Text: TX HJR42 | 2019-2020 | 86th Legislature | Introduced

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Bill Title: Proposing a constitutional amendment for the creation of an endowment fund for this state and for the retention, transfer, or appropriation of fund assets, including investment earnings received on fund assets.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-04-24 - Left pending in subcommittee [HJR42 Detail]

Download: Texas-2019-HJR42-Introduced.html

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86R3561 KJE-D
By: Metcalf H.J.R. No. 42

A JOINT RESOLUTION
proposing a constitutional amendment for the creation of an
endowment fund for this state and for the retention, transfer, or
appropriation of fund assets, including investment earnings
received on fund assets.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article III, Texas Constitution, is amended by
adding Section 49-g-1 to read as follows:
Sec. 49-g-1. (a) In this section:
(1) "Investment earnings" includes interest earned on
assets.
(2) "Texas-based business entity" means a business
entity:
(A) incorporated or otherwise formed under the
laws of this state; or
(B) the headquarters or other principal office of
which is located in this state.
(b) The endowment fund is created as a special fund in the
state treasury outside the general revenue fund to generate
investment earnings on endowment fund assets for transfer to other
state funds, accounts, and purposes.
(c) The endowment fund consists of:
(1) money or other assets deposited to or otherwise
transferred to the credit of the fund as provided by law; and
(2) investment earnings received on fund assets,
except to the extent amounts of those earnings are transferred from
the fund in accordance with this section.
(d) The comptroller shall invest the endowment fund assets
separately from other treasury assets and funds. In managing the
endowment fund assets, on behalf of the fund the comptroller:
(1) shall ensure that at least 10 percent of the amount
of invested fund assets is invested in Texas-based business
entities; and
(2) may acquire, exchange, sell, supervise, manage, or
retain any kind of investment that a prudent investor, exercising
reasonable care, skill, and caution, would acquire or retain in
light of the purposes, terms, distribution requirements, and other
circumstances of the fund then prevailing, taking into
consideration:
(A) the investment of all the fund assets rather
than a single investment; and
(B) the goal of preserving the aggregate
purchasing power of the fund assets.
(e) In each state fiscal year beginning on or after
September 1, 2040, and at the same time the comptroller makes the
transfers to the economic stabilization fund as required by Section
49-g of this article, the comptroller shall transfer from the
endowment fund the following amounts of the average amount of
yearly investment earnings received in the five preceding state
fiscal years from the investment of endowment fund assets:
(1) an amount equal to 25 percent of those earnings to
the general revenue fund;
(2) an amount equal to five percent of those earnings
to the economic stabilization fund, except as provided by
Subsection (h) of this section;
(3) an amount equal to 10 percent of those earnings to
the foundation school fund or a successor fund or account from which
grants are provided to school districts in this state to guarantee
that each school district in this state has:
(A) adequate resources to provide each eligible
student a basic instructional program and facilities suitable to
the student's educational needs; and
(B) access to a substantially equalized program
of financing in excess of basic costs for certain services; and
(4) an amount equal to 10 percent of those earnings to
the property tax relief fund or a successor fund or account the
primary purpose of which is to reduce school district ad valorem
maintenance and operations tax rates.
(e-1) In each state fiscal year beginning on or after
September 1, 2030, and at the same time the comptroller makes the
transfers to the economic stabilization fund as required by Section
49-g of this article, the comptroller shall transfer from the
endowment fund to the general revenue fund an amount equal to 15
percent of the average amount of yearly investment earnings
received in the five preceding state fiscal years from the
investment of endowment fund assets, and the comptroller shall
transfer from the endowment fund to the economic stabilization fund
five percent of the average amount of those yearly investment
earnings, except as provided by Subsection (h) of this section.
This subsection expires August 31, 2040.
(e-2) Not later than the 90th day of each state fiscal year
beginning on or after September 1, 2020, the comptroller shall
transfer from the endowment fund to the general revenue fund an
amount equal to 10 percent of:
(1) in the state fiscal year beginning September 1,
2020, the total amount of investment earnings received in the
preceding state fiscal year from the investment of endowment fund
assets;
(2) in the state fiscal year beginning September 1,
2021, the average amount of yearly investment earnings received in
the two preceding state fiscal years from the investment of
endowment fund assets;
(3) in the state fiscal year beginning September 1,
2022, the average amount of yearly investment earnings received in
the three preceding state fiscal years from the investment of
endowment fund assets;
(4) in the state fiscal year beginning September 1,
2023, the average amount of yearly investment earnings received in
the four preceding state fiscal years from the investment of
endowment fund assets; and
(5) in each subsequent state fiscal year, the average
amount of yearly investment earnings received in the five preceding
state fiscal years from the investment of endowment fund assets.
(e-3) Subsection (e-2) and this subsection expire August
31, 2030.
(f) If a fund or account described by Subsection (e)(4) of
this section does not exist, the comptroller shall transfer to the
general revenue fund the amount otherwise required by Subsection
(e)(4) of this section to be transferred. The transferred amount
may be appropriated only to provide for the support of primary and
secondary public education in this state.
(g) The comptroller shall invest in the manner prescribed by
Subsection (d) of this section the amounts of investment earnings
on endowment fund assets that are not transferred from the fund in
accordance with this section, subject to Subsection (i) of this
section.
(h) In the manner required by Section 49-g(c) of this
article, the comptroller shall reduce the amounts of the transfers
to the economic stabilization fund otherwise required by Section
49-g of this article if making all of the transfers to that fund
otherwise required by this section and Section 49-g of this article
in a state fiscal year would result in the balance of that fund
exceeding the limit under Section 49-g(g) of this article. If after
making those reductions the transfer otherwise required by this
section would result in an amount in that fund that exceeds the
limit under Section 49-g(g) of this article, the comptroller shall:
(1) reduce the amount of the transfer under this
section by the amount necessary to avoid exceeding the limit; and
(2) retain the amount of the reduction in the
endowment fund.
(i) The legislature may, by a two-thirds vote of the members
of each house, appropriate money from the endowment fund at any time
for any purpose.
(j) On November 30, 2019, the comptroller shall transfer $1
billion from the economic stabilization fund to the endowment fund.
This subsection expires January 1, 2021.
SECTION 2. 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 for the creation of an
endowment fund for this state and for the retention, transfer, or
appropriation of fund assets, including investment earnings
received on fund assets."