April 2019 Committee on School Finance/Permanent School Fund Item 10

Review of the Permanent School Fund Emerging Market Debt Asset Class

April 5, 2019

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY:
This item provides an opportunity for the board to review the emerging market debt asset class.

STATUTORY AUTHORITY:
Texas Constitution, Article VII, §2 and §5, 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 SBOE to manage and invest the permanent school fund in accordance with the prudent person standard.

19 TAC Chapter 33 codifies administrative rules that provide a statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund as adopted by the State Board of Education (SBOE).

The full text of statutory citations can be found in the statutory authority section of this agenda.

PREVIOUS BOARD ACTION:
At the July 2012 meeting, the board adopted the Permanent School Fund Long-Term Strategic Asset Allocation Plan.

BACKGROUND INFORMATION AND JUSTIFICATION:
The board approved an allocation to emerging market debt local currency in July 2012.

PUBLIC 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.

PUBLIC COMMENTS:
None

Staff Members Responsible:

Holland Timmins, Executive Administrator and Chief Investment Officer, Texas Permanent School Fund