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Relating to the management and investment of the permanent school
fund, including authorizing the creation of the Texas Permanent
School Fund Corporation to manage and invest the fund and limiting
the authority of the School Land Board to manage and invest the fund
if the corporation is created.
Because of the uncertainty regarding future returns on investment and fund distributions, the fiscal
implications of the bill cannot be determined at this time.
SB 1232 would allow the State Board of Education to create the Texas Permanent School Fund Corporation (TPSFC) and establish its board of directors to operate under the delegated authority of the State Board of Education. The TPSFC would manage and invest the Permanent School Fund and the Charter District Bond Guarantee Reserve Fund for the purpose of growing those funds to improve long term school financing. The bill lays out detailed requirements related to the TPSFC including the makeup and authority of its board of directors, its relationship to the State Board of Education, operating and reporting requirements, and other related issues.
According to the bill author's statement of purpose, the TPSFC is based off the University of Texas/Texas A&M Investment Management Company (UTIMCO) which started managing the Permanent University Fund in 1996.
There are clearly risks and potential rewards to the changes proposed by SB 1232, however with no basis to weigh those against each other, Texas Action remains neutral.