1. (a) The trust account shall balance the present needs and interests of the political subdivisions with those of the future. The trust account distribution objectives shall be to:

   1. (1) provide a predictable, stable stream of distributions over time;
   2. (2) ensure that the inflation-adjusted value of distributions is maintained over the long- term; and
   3. (3) ensure that the inflation-adjusted value of the corpus after distributions is maintained over the long-term.

2. (b) Subject to subsection (c) of this section, the actual distribution amount shall be 5% of the average market value of the trust account calculated as of the end of the calendar year immediately preceding the distribution. The actual distribution amount shall be distributed as follows:

   1. (1) 4.5% to the political subdivisions; and
   2. (2) 0.5% to the distribution stabilization account when the distribution stabilization account balance is less than the maximum balance, which shall be equal to three times the amount actually distributed in the preceding year from the trust account to the political subdivisions. When the distribution stabilization account balance equals the maximum balance, this 0.5% portion of the actual distribution amount shall not be distributed from the trust account.

3. (c) If the net earnings of the trust account are less than the calculated actual distribution amount in subsection (b) of this section, the actual distribution amount shall not exceed the amount in subsection (b)(1) of this section and shall be funded from the sources, until exhausted, in the order provided as follows:

   1. (1) adjusted current earnings;
   2. (2) positive net earnings; then
   3. (3) distribution stabilization account.

Source Note:The provisions of this §18.2 adopted to be effective November 16, 2000, 25 TexReg 11292; amended to be effective March 27, 2003, 28 TexReg 2618; amended to be effective March 6, 2006, 31 TexReg 1454.