SRC-JFA S.C.R. 15 75(R)    BILL ANALYSIS


Senate Research CenterS.C.R. 15
By: Ellis
Finance
2-27-97
As Filed


DIGEST 

Currently, three separate external investment firms manage $3.5 billion of
the $13 billion Permanent School Fund (PSF) assets.  According to the
Comptroller's Office, internal managers have consistently outperformed the
three external firms in rates of return.  The external managers'
performance further decreases once the impact of fees is assessed.  The
net savings that would be generated by S.C.R. 15 is estimated by the
comptroller to be close to $9 million annually.  Under this resolution,
the PSF internal managers would be required to increase their staff size
by approximately eight persons. This resolution would direct the State
Board of Education to contract with PSF Management Company to perform all
investment management of PSF.    

PURPOSE

As proposed, S.C.R. 15 submits the following resolutions:

To urge the State Board of Education to directly manage all investments of
the Permanent School Fund through the Texas Permanent School Fund
Management Company. 

To forward official copies of this resolution to all members of the State
Board of Education and the commissioner of the Texas Education Agency.