SRC-MWN S.B. 512 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 512
77R2256 ESH-DBy: Duncan
Finance
3/27/2001
As Filed


DIGEST AND PURPOSE 

Currently, the Texas Constitution assigns responsibility for investment of
the Permanent School Fund (PSF) to the State Board of Education (SBOE). As
proposed, S.B. 512 transfers the authority to manage and invest the
Permanent School Fund from the State Board of Education to the Texas
Education Agency to be governed by an investment board with appropriate
financial expertise. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 43, Education Code, by adding Section 43.0011, as
follows: 

Sec. 43.0011. PERMANENT SCHOOL FUND INVESTMENT BOARD. Provides that the
Permanent School Investment Board consists of the persons appointed as
provided by Section 5(d), Article VII, Texas Constitution, and the
commissioner of education (commissioner), who serves as a nonvoting ex
officio member. Requires the governor to designate the presiding officer of
the board from among the appointed members. Provides that the presiding
officer serves in that capacity at the will of the governor. Authorizes the
board to perform certain duties. 

SECTION 2. Amends Sections 43.0031(a) and (b), Education Code, to require
the Permanent School Investment Board, rather than the State Board of
Education, to adopt and enforce an ethics policy that provides standards of
conduct relating to the management and investment of the permanent school
fund. Requires the ethics policy to include provisions applicable to
members of the Permanent School Investment Board, rather than the State
Board of Education and to the executive director and other employees of the
board. 

SECTION 3. Amends Section 43.0032, Education Code, to require a person to
whom this section applies who has a business, commercial, or other
relationship that could reasonably be expected to diminish the person's
independence of judgment in the performance of the person's
responsibilities relating to the management or investment of the fund to
disclose the relationship in writing to the board. Makes conforming
changes. 

SECTION 4. Amends Section 43.0033, Education Code, to make conforming
changes. 

SECTION 5. Amends Section 43.0034(a), Education Code, to make conforming
changes. 

SECTION 6. Amends Section 43.004(a), Education Code, to make a conforming
change. 

SECTION 7. Amends Section 43.005, Education Code, to make conforming
changes. 

 SECTION 8. Amends Sections 43.006(a) and (d)-(f), Education Code, to make
conforming changes. 

SECTION 9. Amends Section 43.007, Education Code, to make conforming
changes. 

SECTION 10. Amends Sections 43.008(a) and (b), Education Code, to make
conforming changes. 

SECTION 11. Amends Sections 43.009(a)-(c), Education Code, to make
conforming changes. 

SECTION 12. Amends Sections 43.010(a), (c), and (d), Education Code, to
make conforming changes. 

SECTION 13. Amends Sections 43.011(a)-(e), Education Code, to make
conforming changes. 

SECTION 14. Amends Sections 43.012(a) and (c)-(f), Education Code, to make
conforming changes. 

SECTION 15. Amends the heading of Section 43.014, Education Code, to read
as follows: 

Sec. 43.014. DUTIES OF COMPTROLLER RELATING TO AVAILABLE SCHOOL FUND.

SECTION 16. Amends Section 43.014(a), Education Code, to make a conforming
change. 

SECTION 17. Amends the heading to Section 43.015, Education Code, as
follows: 

 Sec. 43.015. New heading: ADDITIONAL DUTIES OF COMPTROLLER.

SECTION 18. Amends Sections 43.015(b), (e), and (f), Education Code, to
make conforming changes. 

SECTION 19. Amends Sections 43.017-43.019, Education Code, to make
conforming changes. 

SECTION 20. Amends Section 45.051(1), Education Code, to redefine "board."

SECTION 21. Amends Section 7.108(a), Education Code, to delete text
regarding a person selling bonds. 

SECTION 22. Repealer: Section 7.102(c)(31) (State Board of Education Powers
and                                            Duties), Education Code and
Section 43.003 (Investment of Permanent School
Fund), Education Code. 

SECTION 23. Provides for the portability of certain policies, forms, and
objectives. Provides that all contracts of the State Board of Education
relating to the management and investment of the permanent school fund are
transferred to the Permanent School Fund Investment Board on the date of
the first meeting of the Permanent School Fund Investment Board. 

SECTION 24. Provides that a reference in law to the State Board of
Education that relates to management or investment of the permanent school
fund means the Permanent School Fund Investment Board. 

SECTION 25. Effective date: January 1, 2002, contingent on the passage of
the necessary                                     constitutional amendment.