Both the republic and the state of Texas set aside land from the public domain for the support of the public schools, the University of Texas and its branches, and the state eleemosynary institutions. More of the public domain was granted to the schools than to any other institution. In 1839 the Texas Congress, in compliance with a suggestion from President Mirabeau B. Lamar, appropriated from the public domain three leagues of land to each county, the land to be used in establishing public schools. The next year an additional league was added to each county's allotment. The county schools in all but fifteen Texas counties, which were organized after the public domain was exhausted, received land grants totaling 4,229,166 acres. In 1854 the Texas legislature, in making grants to encourage railroad construction, provided that the railroads in surveying their lands should also survey alternate sections to be allotted to the public schools. The final grant to the schools from the public domain was made in the Constitution of 1876, which granted to the public schools one-half of the unappropriated public domain, including the alternate sections of the grants to railroads. A total of more than 42,500,000 acres was appropriated in this manner. In 1900 it was found that the state had disposed of slightly more than one-half the lands that were unappropriated in 1876, thus causing the Permanent School Fund to fall 17,180 acres short of its share. In settlement of the account the legislature transferred $17,180 from the general fund to the Permanent School Fund, thus balancing the account and recognizing the exhaustion of the unappropriated public domain. The sale of school land was continued, however, the proceeds going into the permanent school fund. In 1942 only about a million acres of the public school lands remained unsold. At that time the Permanent School Fund had in bonds and cash $72,837,412 plus unpaid principal indebtedness on notes securing the purchase of school lands; the latter amounted to $16,864,090 on August 31, 1944. Although the Permanent School Fund has been accumulated chiefly through the sale of land, it has been augmented by mineral royalties. Mineral rights were reserved on the sale of 7,485,000 acres of school lands, and since 1929 the mineral estate of riverbeds, channels, lakes, and areas within the tidewater limits, whose surface areas had been previously reserved by the state itself, has been appropriated to become a part of the public school fund.
The University of Texas, Texas A&M, and other branches of the university system have been credited with 2,329,168 acres of appropriated public lands, the first grant of fifty leagues having been made by the Texas Congress in 1839. Early appropriations to the universities were sold, but the two million acres granted in 1876 and 1883 have been held in solid blocks and leased for grazing purposes. This land has also in some instances been found to be rich in oil and has produced a steady income from royalties. In 1942 the Permanent University Fund had bonds and cash amounting to $31,351,750, plus 2,281,660 acres of unsold lands carried on the auditor's books at the conservative figure of $10 million.
By an act of August 30, 1856, a land endowment of slightly more than 100,000 acres was given to each of four eleemosynary institutions for the blind, deaf, insane, and orphans. The acres actually surveyed totaled 410,600. These lands were sold on the same terms and conditions as the school lands, under the various sales acts from 1881 through 1897, at from $1.00 to $2.50 per acre. The revenues set up endowments for the institutions.
As of August 31, 1965, the public school fund had received a total of $599,534,721 from mineral-lease bonuses, rentals, and royalties. This can be broken down as follows: bonuses, rentals, and royalties from minerals other than oil and gas, totaling $36,862,101; oil and gas lease bonuses from submerged lands, totaling $212,645,651, and on-shore lands (including riverbeds), amounting to $46,019,750; oil and gas lease rentals from submerged lands, totaling $26,466,174, and on-shore lands (including riverbeds), equaling $17,980,129; oil and gas lease royalties from submerged lands totaling $122,211,488, and on-shore lands, $137,349,428. As of the same date the University of Texas permanent fund had received a total of $449,177,887 from the sale of the original fifty leagues and mineral-lease bonuses, royalties, and rentals derived from the 2,104,909 acres of West Texas lands granted by the Constitution of 1876 and the legislature in 1883. As of that date $4,009,057 had been paid into the Available University Fund from surface easements and sale of sand, gravel, and caliche. The university permanent fund is invested in government bonds and corporate securities as prescribed by the state constitution. One-third of the income from such investment accrues to the Texas A&M University System available fund and two-thirds to the available fund of the University of Texas System, as prescribed by the legislature in 1931. See also PUBLIC LANDS, LAND GRANTS, AVAILABLE SCHOOL FUND, TIDELANDS CONTROVERSY.