November 16, 2021 Committee of the Full Board Item 3

Implementation of Senate Bill (SB) 1232, 87th Legislature, Regular Session, 2021

November 19, 2021

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

SUMMARY: This item provides an opportunity for the State Board of Education (SBOE) to consider the approval of the creation of the Texas Permanent School Fund (PSF) Corporation and appointment of initial board members of the Texas PSF Corporation, provide initial approval of the Certificate of Formation, and address other matters related to the Texas PSF Corporation as outlined in SB 1232.

STATUTORY AUTHORITY: Texas Constitution, Article VII, §2 and §5; Texas Education Code §43.052(a) and §43.052(b); and SB 1232, 87th Legislature, Regular Session, 2021.

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 SBOE to manage and invest the permanent school fund in accordance with the prudent person standard.

TEC, §43.052(a), allows the SBOE to incorporate the Texas PSF Corporation and delegate to the corporation the board’s authority to manage and invest the permanent school fund and charter district guarantee reserve fund.

TEC, §43.052(b), requires the SBOE to adopt the initial articles of incorporation for the corporation.

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

FUTURE ACTION EXPECTED: The SBOE is expected to implement SB 1232.

BACKGROUND INFORMATION AND JUSTIFICATION: SB 1232 was passed by the 87th Texas Legislature, Regular Session, 2021. The bill authorizes the SBOE to create the Texas Permanent School Fund Corporation (Corporation) and delegate its authority to manage and invest the PSF to the Corporation.

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