Bill Text: TX HB4388 | 2019-2020 | 86th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the management of the permanent school fund by the School Land Board and the State Board of Education and a study regarding distributions from the permanent school fund to the available school fund.

Spectrum: Slight Partisan Bill (Republican 13-7)

Status: (Passed) 2019-06-07 - Effective on 9/1/19 [HB4388 Detail]

Download: Texas-2019-HB4388-Introduced.html

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86R13428 JXC-D
By: Murphy H.B. No. 4388

A BILL TO BE ENTITLED
AN ACT
relating to the management of the permanent school fund by the
School Land Board and the State Board of Education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 43, Education Code, is amended by adding
Section 43.0052 to read as follows:
Sec. 43.0052. QUARTERLY REPORTS. Each quarter, the State
Board of Education shall provide to the School Land Board a
financial report on the portion of the permanent school fund assets
and funds for which the State Board of Education is responsible.
The report must include:
(1) actual allocation and target allocation of assets;
(2) a summary of investment types;
(3) asset and sector performance; and
(4) benchmarks.
SECTION 2. Subchapter C, Chapter 32, Natural Resources
Code, is amended by adding Section 32.068 to read as follows:
Sec. 32.068. QUARTERLY REPORTS. Each quarter, the board
shall provide to the State Board of Education a financial report on
the portion of the permanent school fund assets and funds for which
the board is responsible. The report must include:
(1) actual allocation and target allocation of assets;
(2) a summary of investment types;
(3) asset and sector performance; and
(4) benchmarks.
SECTION 3. Section 51.402(c), Natural Resources Code, is
amended to read as follows:
(c) Notwithstanding Subsection (a), on January 1 of each
even-numbered year, the sum of any funds designated under Section
51.401 not being used for a purpose listed in Subsection (a),
holdings in the permanent school fund liquid account, and the
market value of the investments in real estate made under this
section [on January 1 of each even-numbered year] may not exceed an
amount that is equal to 15 percent of the market value of the
permanent school fund on that date.
SECTION 4. Section 51.4131, Natural Resources Code, is
amended to read as follows:
Sec. 51.4131. REPORT ON ANTICIPATED TRANSFER OF FUNDS;
DEADLINE. (a) Not later than September 1 of each even-numbered
year, the board shall submit to the legislature, comptroller, State
Board of Education, and Legislative Budget Board a report that,
specifically and in detail, states the date a transfer will be made
and the amount of money the board will transfer during the
subsequent state fiscal biennium from the real estate special fund
account of the permanent school fund established under Section
51.401 to the available school fund or the State Board of Education
for investment in the permanent school fund.
(b) The board shall make any transfer described in a report
under Subsection (a) not later than September 1 of the next
even-numbered year.
SECTION 5. Subchapter I, Chapter 51, Natural Resources
Code, is amended by adding Section 51.414 to read as follows:
Sec. 51.414. PERMANENT SCHOOL FUND LIQUID ACCOUNT. (a) The
permanent school fund liquid account is established as an account
in the permanent school fund in the State Treasury to be used by the
board and the State Board of Education as provided by this section.
(b) Each quarter, the board shall hold a meeting and adopt a
resolution to release from the real estate special fund account
funds designated under Section 51.401 that are not being used for a
purpose listed in Section 51.402(a) and are not required for the
board's cash needs for the 90-day period following the date of the
meeting, to be deposited to the credit of the permanent school fund
liquid account in the State Treasury.
(c) The State Board of Education may invest funds in the
permanent school fund liquid account. The investments may be made
only in liquid assets or markets, in a manner authorized by law for
the investment of the permanent school fund.
(d) Investment income and capital gains derived from funds
in the permanent school fund liquid account shall be deposited in
the State Treasury to the credit of the State Board of Education for
investment in the permanent school fund. This subsection does not
require a deposit if the value of the assets held in the permanent
school fund liquid account is below book value.
(e) Funds may be appropriated to the State Board of
Education from the permanent school fund liquid account to pay for
administrative costs associated with implementing this section,
including costs associated with contracts for professional
investment management or investment advisory services.
(f) The board shall provide to the State Board of Education
in each quarterly report required by Section 32.068 the board's
anticipated cash needs for the six-month period following the date
of the report, to allow the State Board of Education to ensure that
the board's cash needs may be met as provided by Subsection (g).
(g) Not later than the 10th day after the date of a request
of the board, the State Board of Education shall release from the
permanent school fund liquid account funds to be deposited to the
credit of the real estate special fund account in the State Treasury
in an amount requested by the board.
SECTION 6. This Act takes effect September 1, 2019.