Jan-Feb Committee on School Finance Permanent School Fund Item 10

Approval of 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

February 3, 2017

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY: 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: Texas Constitution, Article VII, §5(f).

PREVIOUS BOARD ACTION: In July 2009, the State Board of Education selected The Bank of New York Mellon Corporation to provide master trust custodial and securities lending services to the Permanent School Fund. The contract expires on August 31, 2017.

BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the April 2016 meeting, the board approved the issuance of a Request for Proposals for Global Custody and Securities Lending Services for the Permanent School Fund. Responses were due on June 9, 2016.

FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $2.1 billion during the 2016-2017 biennium.

PUBLIC AND STUDENT BENEFIT: The distribution of the Permanent School Fund will flow to the school districts and reduce the tax burden to the public and the state of Texas.

PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.

PUBLIC COMMENTS: None.

OTHER COMMENTS AND RELATED ISSUES: None.

Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund

Separate Exhibit:
Information to be provided prior to the committee meeting.