Adoption of Review of 19 TAC Chapter 33, Statement of Investment Objectives, Policies,
and Guidelines of the Texas Permanent School Fund
(Adoption of Review)
November 18, 2011
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT
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 adoption of 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).
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. The review of 19 TAC Chapter 33 was presented to the Committee on School Finance/Permanent School Fund for discussion in September 2011.
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.
Agency staff anticipate presenting changes to 19 TAC Chapter 33 for first reading and filing authorization at a future SBOE meeting.
RULE REVIEW: The Texas Education Agency (TEA) filed the notice of proposed review of
19 TAC Chapter 33 with the Texas Register following the September 2011 SBOE meeting. If authorized by the SBOE, the TEA will file the notice of adopted review with the Texas Register following the November 2011 SBOE meeting. The notice of adopted review will state that the SBOE finds the reasons for adopting 19 TAC Chapter 33 continue to exist. Any public comments received during the review of 19 TAC Chapter 33 will also be filed.
The filing of the notice of adopted review stating that 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: Following the September 2011 SBOE meeting, notice of the proposed review of 19 TAC Chapter 33 was filed with the Texas Register initiating the official public comment period for the review. At the time this item was prepared, no comments had been received regarding this review. Any public comments received will be provided to the SBOE during the November 2011 meeting.
ALTERNATIVES: None.
OTHER COMMENTS AND RELATED ISSUES: None.
COMMISSIONER'S RECOMMENDATION: I recommend that the State Board of Education:
Adopt the review of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund.
Respectfully submitted,
Robert Scott
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund
Attachments:
I. Statutory Citations
II. Text of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund