The other great Texas educational fund is the Permanent School Fund,
which amounted to nearly $360,500,000 in July, 1957. Like the Permanent
University Fund, this money is invested, and income from the investments
is spent for current needs. Unlike the University Fund, the Permanent
School Fund may have one per cent of its value appropriated by the
Legislature each year for current expenses. Of course, this
appropriation—if made—is approved during the Legislature’s biennial
session. The bulk of the Permanent School Fund, like the Permanent
University Fund, has come from mineral development on specific lands set
aside for the benefit of the fund.
These lands were provided by the Constitution of 1876, which said that
one-half of the public domain of the state, alternate sections of
railroad land, and all money from the sale of these lands should
constitute the Permanent School Fund. An Act of February 23, 1900, gave
the then remaining public domain to the Permanent School Fund, except
for rivers, lakes, bays, and islands along the Gulf of Mexico. In 1939,
the Texas Legislature dedicated the mineral estate of these rivers,
lakes, bays and islands to the Permanent School Fund. For sometime
before the dedication, most income from these sources had been channeled
into the Permanent School Fund.
Under these acts, 46,500,000 acres of land, including the mineral estate
alone of 7,160,000 acres, have been granted to the Permanent School
Fund. Of the former figure, 42,500,000 acres are surveyed uplands, of
which only about 900,000 remain unsold. The first school land sold was
160 acres in Bowie County in 1874. Since 1905 all sales have been on a
competitive sealed bid basis.
Moneywise, oil production royalties alone brought the Permanent School
Fund more than $14,000,000 in 1956. Of the 7800 oil leases in force,
production was experienced on about 1400.
Another source of income—small though it is—for the Permanent School
Fund comes from tracts of unsurveyed land. These are called “vacancies”.
People occupying this land usually believe that they own it. In 1939 the
Legislature passed an act designed to protect the occupants of the land
in their rights and to insure that the Permanent School Fund receives
its rightful share of the value of this unsurveyed land.
Of a similar nature to vacancies is excess land—acreage within a tract
in excess of what was granted to the first claimant. These were usually
created by inadequate surveying equipment and hardships under which
surveyors worked during the early years of Texas. For example, a tract
of land when first surveyed might have measured 160 acres. Today, with
more precise surveying equipment and methods, the tract might survey out
to be 180 acres. The difference between the two—20 acres—is excess
acreage. It has been estimated that about one per cent of the total area
of the state, or about 1,750,000 acres, was at one time excess land.
Owners of property containing excess land were also covered by the June
19, 1939, law mentioned above. These owners, and property holders
occupying vacancies, were allowed by the 1939 law to pay a reasonable
price for the land and receive a clear title to the property.
As examples of money coming into the Permanent School Fund from these
sources, excesses have put about $2,000,000 into the fund since the 1939
law was enacted, and vacancies have brought the fund about half a
million dollars.
In conclusion, it will be of interest to note that lands now belonging
to the Permanent School Fund are channels, lakes, bays, and other areas
within tidewater limits including part of the Gulf of Mexico. In
addition, vacant lands and 900,000 acres of surveyed uplands belong to
the Permanent School Fund. All minerals within the remaining public
domain have, therefore, been dedicated to this school fund.