January 2019 Committee on School Finance/Permanent School Fund Item 5

Ratification of the Purchases and Sales of the Investment Portfolio of the Permanent School Fund for the Months of October and November 2018


February 1, 2019

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

SUMMARY:
This item provides an opportunity for the committee and board to consider approval of the purchases and sales of investments executed in the portfolio of the Permanent School Fund for the months of October and November 2018.

STATUTORY AUTHORITY: Texas Education Code (TEC), §§43.003 and 43.007 and the Texas Constitution, Article VII, §5(f).

TEC, §43.003, outlines the types of investments that the State Board of Education (SBOE) may make with the Permanent School Fund.

TEC, §43.007, authorizes the SBOE to make transactions in the investment portfolio of the Permanent School Fund.

The Texas Constitution, Article VII, §5(f) authorizes the SBOE to acquire, exchange, sell, supervise, manage or retain investments of the Permanent School Fund and establishes the prudent person investment practice.

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

PREVIOUS BOARD ACTION: At the November 2018 meeting, the board approved purchases in the amount of $849,365,770 and sales in the amount of $932,377,747 conducted in the investment portfolio of the Permanent School Fund for the months of August and September 2018.

BACKGROUND INFORMATION AND JUSTIFICATION: The purchases and sales of the investment portfolio are reviewed by the staff to ensure compliance with the Investment Guidelines, Policies, and Objectives of the Permanent School Fund. The specific amounts of the purchases and sales for the reporting period will be recommended to the board for ratification upon approval by the Committee on School Finance/Permanent School Fund.

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