Permanent University Fund
| Sovereign wealth fund | |
| Industry | Institutional investor |
| Genre | Public Lands, Mineral Rights, Land Use Rights |
| Founded | 1876 |
| Founder | Texas Legislature |
| Headquarters | Austin, Texas, United States of America |
|
Key people
|
Paul L. Foster, chairman
|
| Total assets | US$17.5 billion (2015)(does not include public land holdings) |
| Owner | State of Texas |
| Website | www.utimco.org |
The Permanent University Fund (PUF) is a sovereign wealth fund created by the State of Texas to fund public higher education within the state. A portion of the returns from the PUF are annually directed towards the Available University Fund (AUF), which distributes the funds according to provisions set forth by the 1876 Texas Constitution, subsequent constitutional amendments, and the board of regents of the University of Texas System and the Texas A&M University System. The PUF provides extra funds, above monies from tax revenues, to the UT System and the Texas A&M System which collectively have approximately 50 percent of state public university students. The PUF does not provide any funding to other public Universities in the State of Texas.
The Permanent University Fund was established by the 1876 Constitution of the State of Texas. Initially, its assets included one-tenth of University of Texas at Austin lands bordering the railroads (UT Austin was granted 1 million acres (4,000 km2) in West Texas as compensation) as well as 1 million acres (4,000 km2) additional. In addition, the 1876 Constitution organized the University of Texas System, under which governance of Texas A&M University and UT Austin was placed. The original Constitution provided for preference in PUF investment in Texas and U.S. bonds. In 1883, Texas and Pacific Railroad returned 1 million acres (4,000 km2), deemed too worthless to survey, to the State Government, which turned the land over to the PUF. Initially, the little revenue PUF earned from its lands were from grazing leases.
The terms of the annexation of the Republic of Texas in 1845 meant that Texas kept its public lands. The 1894 discovery of oil in Corsicana, Texas and the 1901 discovery of oil at Spindletop in Beaumont, Texas, began a subsequent oil boom in Texas and the western U.S. In 1901, the Texas Legislature authorized UT Austin to "sell, lease and otherwise control" oil and mineral rights for PUF land. In late 1916, after a report was submitted to the Land Commission of the UT Board of Regents, the Board forbade the sale of any University lands, including those of the PUF. On 28 May 1923, the Santa Rita No. 1 oil well, in Reagan County discovered the first oil on PUF land; in the following decades, the PUF's revenue made UT Austin among the best-endowed in the nation. In 1924, the UT Regent Robert Story requested that the legislature direct oil rights revenue directly into the Available University Fund; the 29th legislature complied on 3 April 1925 by passing House Bill 246. The March 10, 1926, Texas Supreme Court case State ex rel Attorney General, v. Hatcher, decided against State Treasurer W. Gregory Hatcher, who refused to comply with Attorney General Dan Moody's demands that oil rights revenue be placed into the PUF rather than the AUF. The Texas Supreme Court concluded that the 1876 Constitution directed subterranean revenue to be "corpus of the estate" rather than UT Austin disposable income.
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Wikipedia