S.J.R. 2 Enrolled

RESOLUTION ON INVESTMENT OF STATE
SCHOOL FUND AND UNIFORM SCHOOL FUND
2002 GENERAL SESSION
STATE OF UTAH
Sponsor: Lyle W. Hillyard
Dan R. Eastman This joint resolution proposes to amend the Education Article of the Utah Constitution. The
joint resolution eliminates a requirement that a portion of interest earnings from the State
School Fund, equal to the rate of inflation, be retained in the fund and also eliminates related
language. The joint resolution expands what may be expended to support the public
education system to include dividends. The joint resolution also directs the lieutenant
governor to submit this proposal to voters, makes technical changes, and provides an
effective date.
This resolution proposes to change the Utah Constitution as follows:
AMENDS:
ARTICLE X, SECTION 5
Be it resolved by the Legislature of the state of Utah, two-thirds of all members elected to each of
the two houses voting in favor thereof:
Section 1. It is proposed to amend Utah Constitution Article X, Section 5, to read:
Article X, Section 5. [State School Fund and Uniform School Fund -- Establishment
and use -- Debt guaranty.]
(1) There is established a permanent State School Fund which shall consist of revenue
from the following sources:
(a) proceeds from the sales of all lands granted by the United States to this state for the
support of the public elementary and secondary schools;
(b) 5% of the net proceeds from the sales of United States public lands lying within this
state;
(c) all revenues derived from nonrenewable resources on state lands, other than sovereign
lands and lands granted for other specific purposes;

(d) all revenues derived from the use of school trust lands;
(e) revenues appropriated by the Legislature; and
(f) other revenues and assets received by the fund under any other provision of law or by
bequest or donation.
(2) (a) The State School Fund principal shall be safely invested and held by the state in
perpetuity.
(b) Only the interest and dividends received from investment of the State School Fund may
be expended for the support of the public education system as defined in Article X, Section 2 of this
constitution.
(c) The Legislature may make appropriations from school trust land revenues to provide
funding necessary for the proper administration and management of those lands consistent with the
state's fiduciary responsibilities towards the beneficiaries of the school land trust. Unexpended
balances remaining from the appropriation at the end of each fiscal year shall be deposited in the
State School Fund. [A portion of the interest earnings of the State School Fund, in an amount equal
to the total balance in the State School Fund at the close of each calendar year multiplied by the
annual rate of inflation for the preceding year, as determined by the state treasurer, shall be retained
in the State School Fund and added to the principal.]
(d) The State School Fund shall be guaranteed by the state against loss or diversion.
(3) There is established a Uniform School Fund which shall consist of revenue from the
following sources:
(a) interest and dividends from the State School Fund [remaining after deduction of the
amount retained in the State School Fund to protect the fund against losses due to inflation];
(b) revenues appropriated by the Legislature; and
(c) other revenues received by the fund under any other provision of law or by donation.
(4) The Uniform School Fund shall be maintained and used for the support of the state's
public education system as defined in Article X, Section 2 of this constitution and apportioned as
the Legislature shall provide.
(5) (a) The state may guarantee the debt of school districts created in accordance with Article

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XIV, Section 3, and may guarantee debt incurred to refund the school district debt. Any debt
guaranty, the school district debt guaranteed thereby, or any borrowing of the state undertaken to
facilitate the payment of the state's obligation under any debt guaranty shall not be included as a debt
of the state for purposes of the 1.5% limitation of Article XIV, Section 1.
(b) The Legislature may provide that reimbursement to the state shall be obtained from
monies which otherwise would be used for the support of the educational programs of the school
district which incurred the debt with respect to which a payment under the state's guaranty was made.
Section 2. Submittal to voters.
The lieutenant governor is directed to submit this proposed amendment to the voters of the
state at the next regular general election in the manner provided by law.
Section 3. Effective date.
If the amendment proposed by this joint resolution is approved by a majority of those voting
on it at the next regular general election, the amendment shall take effect on January 1, 2003.

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