Texas Insider Report: AUSTIN Texas This week we continue our 3rd installment of the upcoming amendments that the voters will have the opportunity to vote on November 8 2011 as part of the Constitutional Amendment Election. This week I will discuss the 3rd and 4th proposed amendments.
Proposition 5 (SJR 26): Allow for Counties and Cities to Enter into Interlocal Agreements without the Imposition of a Tax
The Ballot Reads: The constitutional amendment authorizing the legislature to allow cities or counties to enter into interlocal contracts with other cities or counties without the imposition of a tax or the provision of a sinking fund.
Summary: Proposition 5 will allow for counties and municipalities to jointly administer programs provide services or develop long-term infrastructure without having to impose a new tax or enter into new debt. Under current law an interlocal agreement that extends beyond one year constitutes a debt obligation which would require a tax to pay for the debt.
Supporters Say: Many programs can be jointly run by a county and city less expensively with no duplication of services. Proposition 5 clarifies that interlocal contracts can be entered into for longer than one year without creating an additional debt service fund and a tax to finance the debt service. This will allow for long-term agreements between municipalities counties and special districts for special projects and to reduce the duplication in some services within larger metropolitan areas.
Opponents Say: No apparent opposition.
Proposition 6 (HJR 109): Distribute a Portion of the Permanent School Fund Revenue to the Available School Fund
The Ballot Reads: The constitutional amendment clarifying references to the permanent school fund allowing the General Land Office to distribute revenue from permanent school fund land or other properties to the available school fund to provide additional funding for public education and providing for an increase in the market value of the permanent school fund for the purpose of allowing increased distributions from the available school fund.
Summary: The Permanent School Fund is established as a state trust that holds the proceeds from state land and mineral rights and is constitutionally managed by the School Land Board which is comprised of the Land Commissioner and two appointees. The Texas Constitution allows for up to 6 percent of the average market value of the permanent school fund on the last day of each of the 16 state fiscal quarters preceding the regular session of the legislature to be distributed from the permanent school fund to the available school fund. The School Land Board and State Board of Education currently make the permanent school fund investment decisions determines the amount of the revenues from state lands minerals real estate investments and royalty interests that are deposited into the Permanent School Fund and are available to transfer to the Available School Fund.
Proposition 6 would allow for up to $300 million of the revenues derived from land and properties to be constitutionally transferred directly to the available school fund by the Land Commissioner annually and clarify that real estate investments derived from the permanent school fund property will be included in the calculation of the market value of the permanent school fund.
Supporters Say: A recent Attorney General opinion clouded the constitutionality of the School Land Boards ability to transfer proceeds from the Permanent School Fund to the Available School Fund. This constitutional amendment clarifies that up to $300 million of the revenues from the fund may be transferred to the Available School Fund annually without harming the corpus of the Permanent School Fund investments.
Opponents Say: The revenues from the School Land Board investments are currently transferred to the Permanent School Fund to allow the State Board of Education the ability to ensure the revenues are utilized to directly benefit public education. By transferring the revenues directly to the Available School Fund the State Board of Education may not be involved in a decision to reinvest the revenues into the fund corpus to make additional investment revenue in future years depending on the market conditions. In years in which the market is uncertain or oil and gas royalties decline the amount of revenue available to transfer to the Available School Fund may not reach the dollar amount set in the constitution which may jeopardize the future corpus of the fund and hurt long-term investments.
For a complete analysis for each bill contact me by email or click here.
Texas Insider Report: AUSTIN Texas This week we continue our 3rd installment of the upcoming amendments that the voters will have the opportunity to vote on November 8 2011 as part of the Constitutional Amendment Election. This week I will discuss the 3rd and 4th proposed amendments.
Proposition 5 (SJR 26): Allow for Counties and Cities to Enter into Interlocal Agreements without the Imposition of a Tax
The Ballot Reads: The constitutional amendment authorizing the legislature to allow cities or counties to enter into interlocal contracts with other cities or counties without the imposition of a tax or the provision of a sinking fund.
Summary: Proposition 5 will allow for counties and municipalities to jointly administer programs provide services or develop long-term infrastructure without having to impose a new tax or enter into new debt. Under current law an interlocal agreement that extends beyond one year constitutes a debt obligation which would require a tax to pay for the debt.
Supporters Say: Many programs can be jointly run by a county and city less expensively with no duplication of services. Proposition 5 clarifies that interlocal contracts can be entered into for longer than one year without creating an additional debt service fund and a tax to finance the debt service. This will allow for long-term agreements between municipalities counties and special districts for special projects and to reduce the duplication in some services within larger metropolitan areas.
Opponents Say: No apparent opposition.
Proposition 6 (HJR 109): Distribute a Portion of the Permanent School Fund Revenue to the Available School Fund
The Ballot Reads: The constitutional amendment clarifying references to the permanent school fund allowing the General Land Office to distribute revenue from permanent school fund land or other properties to the available school fund to provide additional funding for public education and providing for an increase in the market value of the permanent school fund for the purpose of allowing increased distributions from the available school fund.
Summary: The Permanent School Fund is established as a state trust that holds the proceeds from state land and mineral rights and is constitutionally managed by the School Land Board which is comprised of the Land Commissioner and two appointees. The Texas Constitution allows for up to 6 percent of the average market value of the permanent school fund on the last day of each of the 16 state fiscal quarters preceding the regular session of the legislature to be distributed from the permanent school fund to the available school fund. The School Land Board and State Board of Education currently make the permanent school fund investment decisions determines the amount of the revenues from state lands minerals real estate investments and royalty interests that are deposited into the Permanent School Fund and are available to transfer to the Available School Fund.
Proposition 6 would allow for up to $300 million of the revenues derived from land and properties to be constitutionally transferred directly to the available school fund by the Land Commissioner annually and clarify that real estate investments derived from the permanent school fund property will be included in the calculation of the market value of the permanent school fund.
Supporters Say: A recent Attorney General opinion clouded the constitutionality of the School Land Boards ability to transfer proceeds from the Permanent School Fund to the Available School Fund. This constitutional amendment clarifies that up to $300 million of the revenues from the fund may be transferred to the Available School Fund annually without harming the corpus of the Permanent School Fund investments.
Opponents Say: The revenues from the School Land Board investments are currently transferred to the Permanent School Fund to allow the State Board of Education the ability to ensure the revenues are utilized to directly benefit public education. By transferring the revenues directly to the Available School Fund the State Board of Education may not be involved in a decision to reinvest the revenues into the fund corpus to make additional investment revenue in future years depending on the market conditions. In years in which the market is uncertain or oil and gas royalties decline the amount of revenue available to transfer to the Available School Fund may not reach the dollar amount set in the constitution which may jeopardize the future corpus of the fund and hurt long-term investments.
For a complete analysis for each bill contact me by email or click here.
