The Texas Permanent School Fund is a

sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...

which serves to provide revenues for funding of

public In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichkei ...

primary and

secondary education Secondary education or post-primary education covers two phases on the International Standard Classification of Education scale. Level 2 or lower secondary education (less commonly junior secondary education) is considered the second and final pha ...

in the US state of

Texas Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...

. Its assets include many publicly owned lands within Texas and various other investments; as of the end of fiscal 2020 (August 31), the fund had an endowment of $48.3 billion. The fund is distinct from the

Permanent University Fund The Permanent University Fund (PUF) is a sovereign wealth fund created by the State of Texas to fund public higher education within the state. A portion of the returns from the PUF are annually directed towards the Available University Fund (AU ...

, which funds most institutions in the

University of Texas System The University of Texas System (UT System) is an American government entity of the state of Texas that includes 13 higher educational institutions throughout the state including eight universities and five independent health institutions. The UT& ...

and the

Texas A&M University System The Texas A&M University System is a state university system in Texas and is one of the state's six independent university systems. The Texas A&M University System is one of the largest systems of higher education in the United States, with a bu ...

, but no other public universities or schools in the state.

Management

The lands and other assets in the fund are managed by the

Texas General Land Office The Texas General Land Office (GLO) is a state agency of the U.S. state of Texas, responsible for managing lands and mineral rights properties that are owned by the state. The GLO also manages and contributes to the state's Permanent School Fund ...

(GLO). Money is added to the fund whenever lands under GLO management are sold or leased, or when mineral royalties are collected on natural resource extraction on these lands. Royalties on oil and gas extraction are the fund's major source of revenues. The General Land Office then reinvests these revenues and manages the investments. The

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct ...

produced by the fund's investments is distributed to the state's public school districts (in proportion to their average daily student attendance), but the fund itself may not be spent; this provision ensures that the fund will continue to grow, and its revenues will be available for Texas public schools in perpetuity.

History and enlargement

In 1854 an act of the

Texas Legislature The Texas Legislature is the state legislature of the US state of Texas. It is a bicameral body composed of a 31-member Senate and a 150-member House of Representatives. The state legislature meets at the Capitol in Austin. It is a powerful ...

established the Special School Fund (a predecessor to the Permanent School Fund), intended to fund the state's public school system. The fund was

endowed A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors. Endowments are of ...

with $2 million taken from the money paid to Texas by the federal government in return for Texas's claimed territory in what are now parts of

New Mexico ) , population_demonym = New Mexican ( es, Neomexicano, Neomejicano, Nuevo Mexicano) , seat = Santa Fe , LargestCity = Albuquerque , LargestMetro = Tiguex , OfficialLang = None , Languages = English, Spanish ( New Mexican), Navajo, Ker ...

Colorado Colorado (, other variants) is a state in the Mountain West subregion of the Western United States. It encompasses most of the Southern Rocky Mountains, as well as the northeastern portion of the Colorado Plateau and the western edge of t ...

and

Oklahoma Oklahoma (; Choctaw language, Choctaw: ; chr, ᎣᎧᎳᎰᎹ, ''Okalahoma'' ) is a U.S. state, state in the South Central United States, South Central region of the United States, bordered by Texas on the south and west, Kansas on the nor ...

. After the

Civil War A civil war or intrastate war is a war between organized groups within the same state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government policies ...

and

Reconstruction Reconstruction may refer to: Politics, history, and sociology *Reconstruction (law), the transfer of a company's (or several companies') business to a new company *'' Perestroika'' (Russian for "reconstruction"), a late 20th century Soviet Unio ...

, in 1876 Texas enacted a new constitution which changed the fund's name to the Permanent School Fund and transferred half of the public lands owned by the state to the fund as its new endowment. The 1876 constitution also tasked the General Land Office with the management of these lands and the fund. In 1953, the United States Congress passed the

Submerged Lands Act The Submerged Lands Act of 1953 is a U.S. federal law that recognized the title of the states to submerged navigable lands within their boundaries at the time they entered the Union. They include navigable waterways, such as rivers, as well as ma ...

, which returned to the States the navigable territorial waters that had been historically the property of the States. Because Texas's historical territorial waters originated with its period as a

sovereign state A sovereign state or sovereign country, is a polity, political entity represented by one central government that has supreme legitimate authority over territory. International law defines sovereign states as having a permanent population, defin ...

, the US Supreme Court ruled in ''United States v. Louisiana (1960)'' that Texas was in the unique position of owning territory out to three leagues (10.35 miles) from its coastline. These lands were also added to the Permanent School Fund, further enlarging its assets.

References

{{Reflist Sovereign wealth funds Education in Texas