| (a) The Texas Constitution, Article VII, §§1-8,
establish the Available School Fund, the Texas Permanent School Fund
(PSF), and the State Board of Education (SBOE) and specify the standard
of care SBOE members must exercise in managing PSF assets. In addition,
the constitution directs the legislature to establish suitable provisions
for supporting and maintaining an efficient public free school system,
defines the composition of the PSF and the Available School Fund,
and requires the SBOE to set aside sufficient funds to provide free
instructional materials for the use of children attending the public
free schools of this state. The members of the SBOE serve as fiduciaries
of the PSF.
(b) Pursuant to Texas Education Code, Chapter 43, Subchapter
B, the SBOE delegated the authority to manage and invest the PSF to
the Texas PSF Corporation, a special-purpose governmental corporation
that is an instrumentality of the state of Texas with all necessary
and implied powers to accomplish its purpose. The SBOE has the following
duties and responsibilities with respect to the Texas PSF Corporation:
(1) establish by rule the terms of the five members
of the SBOE appointed to the Texas PSF Corporation Board of Directors;
(2) adopt the certificate of formation for the Texas
PSF Corporation;
(3) approve the adoption and amendment of the Texas
PSF Corporation bylaws; and
(4) act as the sole member of the Texas PSF Corporation.
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