Review of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the
Texas Permanent School Fund
September 14, 2011
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: DISCUSSION
STATE BOARD OF EDUCATION: NO ACTION
SUMMARY: Texas Government Code, §2001.039, establishes a four-year rule review cycle for all state agency rules, including State Board of Education (SBOE) rules. This item presents the review of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund. The rules being reviewed establish definitions, requirements, and procedures for the investment of the Permanent School Fund.
STATUTORY AUTHORITY: The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 33 is Texas Education Code (TEC), §§7.102(c)(31) and (33), 43.0031-43.0034, 43.004, and 45.063; Texas Government Code, §2263.004; and Texas Constitution, Article VII, §5(a)(2), (d), and (f).
BOARD RESPONSE: This item is presented for review and comment.
PREVIOUS BOARD ACTION: The SBOE last adopted the review of 19 TAC Chapter 33 in November 2007, finding that the reasons for initially adopting the rules continue to exist. Subsequent to the 2007 review, §33.2, Distributions to the Available School Fund, was adopted to be effective April 21, 2010; §33.5, Code of Ethics, was last amended to be effective July 1, 2010; and §33.65, Bond Guarantee Program, was last amended to be effective July 4, 2010.
FUTURE ACTION EXPECTED: The review of 19 TAC Chapter 33 will be presented to the SBOE for adoption at the November 2011 board meeting.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: TEC, §7.102(c)(31), states that the SBOE may invest the Permanent School Fund within the limits of the authority granted by the Texas Constitution, Article VII, §5, and TEC, Chapter 43. TEC, §7.102(c)(33), authorizes the SBOE to adopt an annual report on the status of the guaranteed bond program and states that the SBOE may adopt rules as necessary to administer the guaranteed bond program as provided under TEC, Chapter 45, Subchapter C, Guaranteed Bonds. The Texas Government Code, §2263.004, requires the SBOE to adopt by rule standards of conduct applicable to certain financial advisors or service providers. The rules in 19 TAC Chapter 33 establish investment objectives, policies, and guidelines for the Permanent School Fund.
ANTICIPATED REVISIONS TO RULES: No revisions are anticipated at this time.
RULE REVIEW: The Texas Education Agency (TEA) plans to file the review of 19 TAC Chapter 33 with the Texas Register following the September 2011 SBOE meeting. The TEA will accept comments as to whether reasons for adopting 19 TAC Chapter 33 continue to exist. The official comment period will begin with publication of the notice of proposed review in the Texas Register.
The filing of the notice of proposed review soliciting comments as to whether the reasons for adoption continue to exist would not preclude any amendments that may be proposed at different dates through a separate rulemaking process.
FISCAL IMPACT: None.
PUBLIC AND STUDENT BENEFIT: The rules in 19 TAC Chapter 33 establish provisions supporting the management and investment of the Permanent School Fund. 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.
PROCEDURAL AND REPORTING IMPLICATIONS: None.
LOCALLY MAINTAINED PAPERWORK REQUIREMENTS: None.
PUBLIC COMMENTS: None.
OTHER COMMENTS AND RELATED ISSUES: None.
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund
I. Statutory Citations
II. Text of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund