Decision on the Percentage Distribution of the Permanent School Fund
November 16, 2012
COMMITTEE OF THE FULL BOARD: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides the opportunity for the committee and board to evaluate and determine the percentage distribution of the Permanent School Fund for fiscal years 2014-2015.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5.
PREVIOUS BOARD ACTION: At the July 2012 meeting, the board determined that the percentage distribution rate to the Available School Fund from the Permanent School Fund for the 2014-2015 biennium shall be 3.3%.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: The amendment to Article 7 of the Constitution changed the Permanent School Fund distribution from an income-based policy to a total return policy. This distribution rate is to be determined by a vote of two-thirds of the total membership of the State Board of Education taken before the regular session of the legislature convenes. If the State Board of Education does not adopt a rate, then the legislature will adopt a rate by general law or appropriation.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $2.0 billion during the 2012-2013 biennium.
PUBLIC AND STUDENT 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.
PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.
PUBLIC COMMENTS: None.
ALTERNATIVES: No alternative actions are proposed regarding this item.
OTHER COMMENTS AND RELATED ISSUES: None.
Respectfully submitted,
Michael L. Williams
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund
Attachment:
The Texas Constitution, Article 7, Section 5 - Permanent School Fund; Available School Fund; Use of Funds; Distribution of Available School Fund (PDF, 138KB)