Texas 2019 - 86th Regular

Texas House Bill HB4388 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 4388
	1	+	By: Murphy, et al. (Senate Sponsor - Campbell) H.B. No. 4388
	2	+	(In the Senate - Received from the House May 7, 2019;
	3	+	May 10, 2019, read first time and referred to Committee on
	4	+	Education; May 17, 2019, reported favorably by the following vote:
	5	+	Yeas 11, Nays 0; May 17, 2019, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to the management of the permanent school fund by the
6		-	School Land Board and the State Board of Education and a study
7		-	regarding distributions from the permanent school fund to the
8		-	available school fund.
	12	+	School Land Board and the State Board of Education.
9	13		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	14		SECTION 1. Chapter 43, Education Code, is amended by adding
11	15		Section 43.0052 to read as follows:
12	16		Sec. 43.0052. QUARTERLY REPORTS. Each quarter, the State
13	17		Board of Education shall provide to the School Land Board a
14	18		financial report on the portion of the permanent school fund assets
15	19		and funds for which the State Board of Education is responsible.
16	20		The report must include:
17	21		(1) target and actual asset allocations, by asset
18	22		type, based on fair market value or net asset value;
19		-	(2) investment performance by asset type;
20		-	(3) benchmarks and benchmark performances; and
21		-	(4) costs of implementing and administering the
22		-	permanent school fund liquid account under Section 51.414, Natural
23		-	Resources Code, including costs associated with contracts for:
24		-	(A) professional investment management;
25		-	(B) investment advisory services; and
26		-	(C) custodial services for the account.
	23	+	(2) investment performance by asset type; and
	24	+	(3) benchmarks and benchmark performances.
27	25		SECTION 2. Subchapter C, Chapter 32, Natural Resources
28	26		Code, is amended by adding Section 32.068 to read as follows:
29	27		Sec. 32.068. QUARTERLY REPORTS. Each quarter, the board
30	28		shall provide to the State Board of Education a financial report on
31	29		the portion of the permanent school fund assets and funds for which
32	30		the board is responsible. The report must include:
33	31		(1) target and actual asset allocations, by asset
34	32		type, based on fair market value or net asset value;
35	33		(2) investment performance by asset type; and
36	34		(3) benchmarks and benchmark performances.
37	35		SECTION 3. Section 51.402(c), Natural Resources Code, is
38	36		amended to read as follows:
39	37		(c) Notwithstanding Subsection (a), on January 1 of each
40	38		even-numbered year, the market value of the investments [in real
41	39		estate] under Subsections (a)(6) and (8) [this section on January 1
42	40		of each even-numbered year] may not exceed an amount that is equal
43	41		to 15 percent of the market value of the permanent school fund on
44	42		that date.
45	43		SECTION 4. Subchapter I, Chapter 51, Natural Resources
46	44		Code, is amended by adding Section 51.414 to read as follows:
47	45		Sec. 51.414. PERMANENT SCHOOL FUND LIQUID ACCOUNT. (a) The
48	46		permanent school fund liquid account is established as an account
49	47		in the permanent school fund in the State Treasury to be used by the
50	48		board and the State Board of Education as provided by this section.
51	49		(b) Each quarter, the board shall hold a meeting and adopt a
52	50		resolution to release from the real estate special fund account
53	51		funds designated under Section 51.401 that are not being used for a
54	52		purpose listed in Section 51.402(a) and are not required for the
55	53		board's anticipated cash needs for the 90-day period following the
56	54		date of the meeting, to be deposited to the credit of the permanent
57	55		school fund liquid account in the State Treasury.
58	56		(c) The State Board of Education may invest funds in the
59	57		permanent school fund liquid account. The investments may be made
60	58		only in liquid assets, in the same manner that the permanent school
61	59		fund is managed by the State Board of Education.
62	60		(d) Investment income and realized capital gains derived
63	61		from funds in the permanent school fund liquid account shall be
64	62		deposited in the State Treasury to the credit of the State Board of
65	63		Education for investment in the permanent school fund. This
66	64		subsection does not require a deposit if the market value of the
67	65		assets held in the permanent school fund liquid account is below
68	66		cost.
69	67		(e) The State Board of Education may use funds in the
70	68		permanent school fund liquid account to pay for administrative
71	69		costs associated with implementing this section, including costs
72	70		associated with contracts for professional investment management,
73	71		investment advisory services, or custodial services.
74	72		(f) The board shall provide to the State Board of Education
75	73		in each quarterly report required by Section 32.068 the board's
76	74		anticipated cash needs for the six-month period following the date
77	75		of the report, to allow the State Board of Education to ensure that
78	76		the board's cash needs may be met as provided by Subsection (g).
79	77		(g) Not later than the fifth business day after the date of a
80	78		request of the board, the State Board of Education shall release
81	79		from the permanent school fund liquid account funds to be deposited
82	80		to the credit of the real estate special fund account in the State
83	81		Treasury in an amount requested by the board.
84		-	SECTION 5. (a) The legislature finds that the periodic
85		-	examination of distributions made from the permanent school fund to
86		-	the available school fund is necessary for the effective management
87		-	of permanent school fund investments.
88		-	(b) The Texas Education Agency, in consultation with the
89		-	General Land Office, shall conduct a study regarding distributions
90		-	from the permanent school fund to the available school fund. The
91		-	study must:
92		-	(1) examine historical patterns in the real value of
93		-	distributions made from all assets and revenues of the permanent
94		-	school fund and historical patterns in the real value of permanent
95		-	school fund assets relative to the number of students enrolled in
96		-	the public education system;
97		-	(2) analyze the impact of underlying data and
98		-	methodological assumptions on actual and projected distributions
99		-	from the permanent school fund;
100		-	(3) seek input from state government officials
101		-	involved in public education policy or in the appropriation of
102		-	state funds to support the public education system;
103		-	(4) examine current and alternative approaches to
104		-	balance the needs and interests of present and future beneficiaries
105		-	of the permanent school fund and the available school fund;
106		-	(5) develop options to maximize available revenue
107		-	distributions for the education of students enrolled in the public
108		-	education system while preserving the permanent school fund for
109		-	future generations; and
110		-	(6) consider any other subjects relevant to the
111		-	purpose of the study.
112		-	(c) The Texas Education Agency may contract for investment
113		-	management expertise for the purpose of implementing this section.
114		-	(d) Not later than June 1, 2020, the Texas Education Agency
115		-	shall prepare and submit a report regarding the results of the study
116		-	to the governor, the State Board of Education, the Legislative
117		-	Budget Board, the lieutenant governor, the speaker of the house of
118		-	representatives, and each legislative standing committee with
119		-	primary jurisdiction over public education.
120		-	(e) This section expires January 1, 2021.
121		-	SECTION 6. This Act takes effect September 1, 2019.
122		-	______________________________ ______________________________
123		-	President of the Senate Speaker of the House
124		-	I certify that H.B. No. 4388 was passed by the House on May 7,
125		-	2019, by the following vote: Yeas 142, Nays 4, 1 present, not
126		-	voting; and that the House concurred in Senate amendments to H.B.
127		-	No. 4388 on May 24, 2019, by the following vote: Yeas 141, Nays 0,
128		-	1 present, not voting.
129		-	______________________________
130		-	Chief Clerk of the House
131		-	I certify that H.B. No. 4388 was passed by the Senate, with
132		-	amendments, on May 22, 2019, by the following vote: Yeas 31, Nays
133		-	0.
134		-	______________________________
135		-	Secretary of the Senate
136		-	APPROVED: __________________
137		-	Date
138		-	__________________
139		-	Governor
	82	+	SECTION 5. This Act takes effect September 1, 2019.
	83	+	* * * * *