January 2021 Committee on School Finance/Permanent School Fund Item 7

Report on the Permanent School Fund Liquid Account

January 29, 2021

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 take action to ratify transactions.

STATUTORY AUTHORITY:  Texas Constitution, Article VII, §2 and §5; Texas Natural Resources Code (NRC), §51.414, as added by HB 4388, 86th Texas Legislature, 2019; 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, as added by HB 4388, 86th Texas Legislature, 2019, created the Liquid Account within the Permanent School Fund to be managed 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 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 November 2020 meeting, the board ratified purchases and sales of the Permanent School Fund Liquid Account for the period September 1, 2019 through September 2020, in the amounts of $3,561,837,642 and $671,509,016 respectively.

BACKGROUND INFORMATION AND JUSTIFICATION:  None

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