Permanent University Fund

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The Permanent University Fund (PUF) is one of the methods the State of Texas funds its universities.

In 1876, the Texas Constitution formed the PUF, into which proceeds from leases and royalties on state land would be deposited. The discovery of huge oil reserves in the early 1900's dramatically increased the size of the PUF.

The PUF principal in fall 2005 was approximately $15 billion, second only to Harvard University's endowment. The PUF primarily serves the University of Texas System, which receives two thirds of its proceeds. The remaining third goes to the Texas A&M University System. As of 2006, the University of Texas System received the fourth largest endowment in the nation, and the Texas A&M System received the tenth largest.

Other Texas public universities systems, notably University of Houston System and Texas Tech University System, are prohibited by law from sharing the income from this endowment. At one time, the PUF was the chief source of income for Texas A&M University and The University of Texas at Austin, but today its revenues account for less than ten percent of the universities' annual budgets. This has challenged both schools to increase sponsored research and private donations.

In 1984 voters amended the state constitution to expand the number of UT- and A&M-system schools benefiting from the proceeds of the PUF bonding program. The schools receiving help from the PUF thereafter included the University of Texas at Arlington, the University of Texas at Austin, the University of Texas at Dallas, the University of Texas at El Paso, the University of Texas of the Permian Basin, the University of Texas at San Antonio, the University of Texas at Tyler, the University of Texas Southwestern Medical Center at Dallas, the University of Texas Health Science Center at Houston, the University of Texas Health Science Center at San Antonio, the University of Texas System Cancer Center, the University of Texas Health Center at Tyler, Texas A&M University, Prairie View A&M University, Tarleton State University, and Texas A&M University at Galveston.