HBA-DMD, NLM H.J.R. 58 76(R)BILL ANALYSIS Office of House Bill AnalysisH.J.R. 58 By: Junell Appropriations 10/19/1999 Enrolled BACKGROUND AND PURPOSE H.J.R. 58 proposes that the available university fund consists of the distributions made to it from the total return on all investment assets of the permanent university fund, determined by the Board of Regents of the University of Texas System (board). As proposed, H.J.R. 58 requires the submission to the voters of a constitutional amendment authorizing the board to sell, lease, exchange, or otherwise manage any kind of investment in accordance with the standards of a prudent investor. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this resolution does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 11b, Article VII, Texas Constitution, as follows: Sec. 11(b). Authorizes the Board of Regents of the University of Texas System (board) to sell, lease, exchange, or otherwise manage any kind of investment that prudent investors, 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 the investment of all the assets of the fund rather than a single investment. SECTION 2. Amends Section 18, Article VII, Texas Constitution, by amending Subsection (e) and adding Subsection (f), as follows: (e) Provides that the available university fund consists of 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. Requires the amount of any distributions to the available university fund to be determined by the board 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. Specifies the amount to be distributed in a fiscal year. Prohibits the board from increasing annual distributions until certain conditions are met. Prohibits the annual distribution made by the board to the available university fund from exceeding a specified amount during any fiscal year. Requires the expenses of managing permanent university fund land and investments to be paid by the permanent university fund. (f) Requires one-third of the available university fund, rather than one-third of the available university fund, to annually be appropriated in the manner provided by this subsection to the Texas A&M System and its component institutions. Requires the other two-thirds of the annual distribution from the permanent university fund to the available university fund, rather than two-thirds of the available university fund, to annually be appropriated in the manner provided by this subsection to the University of Texas System and its component institutions. SECTION 3. Provides a temporary provision to the Texas Constitution, as follows: TEMPORARY PROVISION. Provides that the amendment of Section 18, Article VII, Texas Constitution, adopted in 1999 does not impair any obligation created by the issuance of bonds or notes in accordance with that section before January 1, 2000, and all outstanding bonds and notes validly issued 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 the payment of the bonds. Requires a specified amount to be distributed to pay the principal and interest due and owing during the fiscal year on those bonds and notes. Provides that this section expires January 1, 2030. SECTION 4. Requires this proposed constitutional amendment to be submitted to the voters at an election to be held November 2, 1999. Sets forth the required language for the ballot.