November 2020 Committee on School Finance/Permanent School Fund Item 12

Report on the Permanent School Fund Liquid Account

November 20, 2020

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 receive a status update on the liquid account and to take action to ratify transactions.

STATUTORY AUTHORITY:  Texas Constitution, Article VII, §2 and §5; Natural Resources Code (NRC), §51.414; 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.

NRC, §51.414 establishes the Permanent School Fund Liquid Account as an account in the permanent school fund in the State Treasury to be managed by the State Board of Education.

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 as adopted by the SBOE.

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

PREVIOUS BOARD ACTION:  At the July 2020 meeting, the board adopted the long-term strategic asset allocation of the Permanent School Fund Liquid Account.

BACKGROUND INFORMATION AND JUSTIFICATION:  None.

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