Bill Caption

Proposing a constitutional amendment providing for the creation of the Texas legacy fund and the Texas legacy distribution fund, dedicating earnings on 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.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HJR 10, Committee Report 1st House, Substituted: a negative impact of ($177,289) through the biennium ending August 31, 2021. Additionally, the joint resolution will create a net positive impact of $286,412,000 to Other Funds during the 2020-21 biennium. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

HJR 10 proposes a constitutional amendment to create two new funds in the state treasury - the Texas Legacy Fund (TLF) and the Texas Legacy Distribution Fund (TLDF). The TLF would initially be funded by a $500 million transfer from the Economic Stabilization Fund (ESF).

This constitutional amendment would require the comptroller to transfer to the TLF unencumbered funds from General Revenue at the end of each biennium which would normally be transferred to the ESF, unless the unappropriated balance of the ESF is lower than the sufficient balance. In that case, the Comptroller would transfer enough funds to the ESF to reach its sufficient balance and transfer the rest to the TLF.

The Comptroller would be required to invest money in each of these three funds as provided by general law in accordance with prudent investor standards.

The TLF would grow each year by transferring unencumbered funds which would otherwise go to the ESF, plus income and interest earned. 

The TLDF would be used to pay down certain long term debt obligations, fund the unfunded liabilities of the Employees Retirement System of Texas or the Teacher Retirement System, and fund certain infrastructure projects excluding transportation and higher education infrastructure projects.

Vote Recommendation Notes

Texas Action is opposed to HJR 10 because this legislation would violate our principle of limited government. This constitutional amendment and its enabling legislation (HB 20) would expose taxpayer funds to investment risks and grow the size of government while failing to reform structural deficiencies of long term debt obligations and public pension plans or providing tax relief.