June 2019 Committee on School Finance/Permanent School Fund Item 9

Review of the Permanent School Fund Emerging Market Equities Asset Class

June 14, 2019

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY: This item provides an opportunity for the board to review the emerging market equities asset class and to make adjustments as needed.

STATUTORY AUTHORITY: Texas Constitution, Article VII, §2 and §5; 19 Texas Administrative Code (TAC) Chapter 33

The Texas Constitution, Article VII, §2 and §5 establish the permanent school fund, the assets that comprise the permanent school fund, the bond guarantee program, the available school fund, and authorize the State Board of Education (SBOE) to manage and invest the permanent school fund in accordance with the prudent person standard.

As adopted by the SBOE, 19 TAC Chapter 33 codifies administrative rules that provide a statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund and Bond Guarantee Program.

The full text of statutory citations can be found in the statutory authority section of this agenda.

PREVIOUS BOARD ACTION: At the June 2018 meeting, the board reaffirmed the Permanent School Fund Long-Term Strategic Asset Allocation Plan with an allocation of 3% to the emerging market equities asset class.

BACKGROUND INFORMATION AND JUSTIFICATION: None

PUBLIC BENEFIT: The distribution of the Permanent School Fund will flow to the school districts and reduce the tax burden to the public and the state of Texas.

PUBLIC COMMENTS: None

Staff Members Responsible:
Holland Timmins, Executive Administrator and Chief Investment Officer, Texas Permanent School Fund