Jan-Feb 2017 Committee on School Finance Permanent School Fund
THURSDAY
February 2, 2017
9 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-104
Members: Patricia Hardy, Chair; Lawrence A. Allen, Jr., Vice Chair; David Bradley;
Keven Ellis; Ken Mercer. A quorum of the State Board of Education may attend the committee meeting and discuss items on the committee agenda. A quorum of the Committee of Investment Advisors to the Permanent School Fund may attend the committee meeting and discuss items on the committee agenda.
Public Testimony - Individual testimony will be taken at the time the related item comes up for committee discussion or action. The procedures for registering and taking public testimony at State Board of Education committee meetings and general board meetings are provided online.
1. Election of Chair
(no agenda exhibit)
State Board of Education (SBOE) operating rules call for each committee to elect a chair from among its members. This item provides an opportunity for each of the SBOE standing committees to elect a chair at this meeting if the SBOE retains the existing committee structure. The chair may then appoint a vice chair. If the board changes the committee structure, the committee may elect a member to preside over this first meeting only. Statutory authority for this action is the Texas Education Code, §7.107.
COMMITTEE - ACTION
SBOE - NO ACTION
2. Review of 19 TAC Chapter 109, Budgeting, Accounting, and Auditing
Texas Government Code, §2001.039, establishes a four-year rule review cycle for all state agency rules, including State Board of Education (SBOE) rules. This item presents the review of 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter A, Budgeting, Accounting, Financial Reporting, and Auditing for School Districts; Subchapter B, Texas Education Agency Audit Functions; Subchapter C, Adoptions By Reference; and Subchapter D, Uniform Bank Bid or Request for Proposal and Depository Contract. The rules being reviewed provide requirements for school districts relating to budgeting, accounting, financial reporting, and auditing; Texas Education Agency (TEA) financial review functions; adoption by reference of the Financial Accountability System Resource Guide (FASRG); and the bank bid and proposal forms and the depository contract and surety bond forms. The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 109 is Texas Education Code (TEC), §§7.102(c)(32), 44.001, 44.002, 44.007, and 44.008, for Subchapter A; TEC, §§7.102(c)(32), 42.152, 44.001, 44.007, 44.008, and 44.010, for Subchapter B; TEC, §§7.055(b)(4), (36), and (37), 7.102(c)(32), 44.001, 44.007, and 44.008, for Subchapter C; and TEC, §§7.102(c)(34), 45.206, and 45.208, for Subchapter D.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
This item presents for first reading and filing authorization a proposed amendment to 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter D, Uniform Bank Bid or Request for Proposal and Depository Contract, §109.51, Uniform Depository Bank Bid or Proposal Form. The proposed amendment would facilitate the acquisition of a depository contract that is in compliance with current banking standards. Statutory authority for this action is the Texas Education Code (TEC), §§7.102(c)(34), 45.206, and 45.208.
COMMITTEE - ACTION
SBOE - ACTION
Texas Government Code, §2001.039, establishes a four-year rule review cycle for all state agency rules, including State Board of Education (SBOE) rules. This item presents the adoption of the review of 19 TAC Chapter 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts. The rules in Subchapter B address the historically underutilized business (HUB) program and procedures relating to protest for purchasing issues and dispute resolution, in accordance with Texas Government Code requirements. The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts, is Texas Government, §§2161.003, 2155.076, and 2260.52.
COMMITTEE - ACTION
SBOE - CONSENT
5. Review of Permanent School Fund Securities Transactions and the Investment Portfolio
Investment staff will report on the transactions executed during the months of October and November 2016 in the investment portfolio of the Texas Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
This item provides an opportunity for the committee and board to consider approval of the purchases and sales of investments executed in the portfolio of the Permanent School Fund for the months of October and November 2016. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
7. Annual Reporting Requirement of the Internally Managed Permanent School Fund Investment Portfolio
This item provides an opportunity for the Executive Administrator and Chief Investment Officer of the Permanent School Fund to report on various items required by 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
8. Decision on Real Estate Investments
This item provides an opportunity for the committee and board to review and consider possible real estate investments. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
This item provides the opportunity for the committee and board to approve the issuance of a request for qualifications for fiduciary, investment contracting, real estate, tax and disclosure counsel for the Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
This item provides an opportunity for the committee and board to review and approve the selection of a firm to provide global custody and securities lending services for the Permanent School Fund and authorization for contract execution by the commissioner of education. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
11. Review of the Private Equity Asset Class
This item provides an opportunity for the committee to review the private equity asset class, including education on private equity and performance.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
12. Report of the Permanent School Fund Executive Administrator and Chief Investment Officer
The Permanent School Fund executive administrator will report to the committee on matters relating to the management of the Permanent School Fund. The report will present information on historical and current status of Fund holdings, current and proposed investment policies and procedures, and historical and current Fund performance and compliance. The administrator will update the board on the bond guarantee program, the status of requests for proposal or for qualifications and current contracts for services and other administrative activities undertaken on behalf of the board. The administrator may provide an update on the PSF distribution or on the effect of legislation impacting the PSF. The administrator will provide an analysis of current and future investment market conditions, focusing upon the impact on the holdings of the Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
This item presents for second reading and final adoption a proposed amendment to 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund, Subchapter A, State Board of Education Rules, §33.65, Bond Guarantee Program for School Districts. The proposed amendment would increase the multiplier used in calculating the capacity of the Permanent School Fund (PSF). Statutory authority for this action is the Texas Education Code (TEC), §§7.102(c)(33), 45.053(d), and 45.063, and the Texas Constitution, Article VII, §5(d).
COMMITTEE - ACTION
SBOE - ACTION