Sec. 20.  TEXAS UNIVERSITY FUND.  (a)  There is established the Texas University Fund for the purpose of providing a dedicated, independent, and equitable source of funding to enable emerging research universities in this state to achieve national prominence as major research universities. 
(b)  The fund consists of money transferred or deposited to the credit of the fund and any interest or other return on the investment assets of the fund.  The legislature may dedicate state revenue to the credit of the fund.
(c)  The legislature shall provide for administration of the fund, which shall be invested in the manner and according to the standards provided for investment of the permanent university fund. The expenses of managing the investments of the fund shall be paid from the fund.
(d)  In each state fiscal biennium, the legislature may appropriate as provided by Subsection (f) of this section all or a portion of the total return on all investment assets of the fund to carry out the purposes for which the fund is established.
(e)  The legislature biennially shall allocate the amounts appropriated under this section, or shall provide for a biennial allocation of those amounts, to eligible state universities to carry out the purposes of the fund. The money shall be allocated based on an equitable formula established by the legislature or an agency designated by the legislature. The legislature shall review and as appropriate adjust, or provide for a review and adjustment, of the allocation formula at the end of each state fiscal biennium.
(f)  The portion of the total return on investment assets of the fund that is available for appropriation in a state fiscal biennium under this section is the portion determined by the legislature, or an agency designated by the legislature, as necessary to provide as nearly as practicable a stable and predictable stream of annual distributions to eligible state universities and to maintain over time the purchasing power of fund investment assets.  If the purchasing power of fund investment assets for any rolling 10-year period is not preserved, the distributions may not be increased until the purchasing power of the fund investment assets is restored.  The amount appropriated from the fund in any fiscal year may not exceed an amount equal to seven percent of the average net fair market value of the investment assets of the fund, as determined by law.  Until the fund has been invested for a period of time sufficient to determine the purchasing power over a 10-year period, the legislature may provide by law for means of preserving the purchasing power of the fund.
(g)  The legislature shall establish criteria by which a state university may become eligible to receive a portion of the distributions from the fund. A state university that is entitled to participate in dedicated funding provided by Section 18 of this article is not eligible to receive money from the fund.
(h)  An eligible state university may use distributions from the fund only for the support and maintenance of educational and general activities that promote increased research capacity at the university.
(i)  For purposes of Section 22, Article VIII, of this constitution:
(1)  money in the fund is dedicated by this constitution; and
(2)  an appropriation of state tax revenues for the purpose of depositing money to the credit of the fund is treated as if it were an appropriation of revenues dedicated by this constitution.
(Added Nov. 3, 2009; Subsecs. (a) and (g) amended and (i) added Nov. 7, 2023, subject to resolution of an election contest under Chapter 233, Election Code, pending as of Feb. 1, 2024.)