November 2016 Committee on School Finance Permanent School Fund
THURSDAY
November 17, 2016
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; Ken Mercer; Thomas Ratliff. 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. Approval of Costs to Administer the 2016-2017 State-Developed Assessments to Private School Students
Texas Education Code, §39.033, allows a private school to voluntarily assess its students with the State of Texas Assessments of Academic Readiness (STAAR) and the Texas English Language Proficiency Assessment System (TELPAS) assessments. The State Board of Education (SBOE) must approve the per-student cost to private schools, which may not exceed the cost of administering the same assessment to a student enrolled in a public school district. This item requests approval of these costs for the 2016-2017 school year. Statutory authority for this action is the TEC, §39.033.
COMMITTEE - ACTION
SBOE - CONSENT
This item provides the opportunity for the committee to discuss 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 is the Texas Education Code (TEC), §§7.102(c)(34), 45.206, and 45.208.
COMMITTEE - DISCUSSION
SBOE - NO 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 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, Subchapter B, is Texas Government Code, §§2161.003, 2155.076, and 2260.052.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
4. Review of Permanent School Fund Securities Transactions and the Investment Portfolio
Investment staff will report on the transactions executed during the months of August and September 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 August and September 2016. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
6. Third Quarter 2016 Permanent School Fund Performance Report
The performance measurement consultant to the Permanent School Fund, BNY Mellon Asset Servicing, will report on the investment performance during the third calendar quarter 2016 and cumulative investment performance of the various portfolios of the Fund. This item will allow the committee to discuss in depth various issues related to portfolio management such as risk characteristics of portfolios and portfolio attributes.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
7. 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
8. Overview of the Permanent School Fund Real Estate Policy
This item provides an opportunity for the committee and board to review the real estate policy. The committee will consider potential adjustments to co-investment and secondary investment for the PSF. The committee may take action based on this information. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
9. 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
10. 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
(First Reading and Filing Authorization)
This item presents for first reading and filing authorization 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
This item presents for first reading and filing authorization 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, §33.67, Bond Guarantee Program for Charter Schools. The proposed amendment would add language to require charter schools accessing the Permanent School Fund (PSF) Bond Guarantee Program (BGP) to have attained a certain level of student academic proficiency and specify how applications will be prioritized if the available capacity is insufficient to guarantee the total value of the bonds for all applicant charter districts. Statutory authority for this action is the Texas Education Code (TEC), §§7.102(c)(33), 45.0532, and 45.063, and the Texas Constitution, Article VII, §5(d).
COMMITTEE - ACTION
SBOE - ACTION