April 2016 Committee on School Finance Permanent School Fund

THURSDAY
April 7, 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. Adoption of Review of 19 TAC Chapter 129, Student Attendance, Subchapter A, Student Attendance Allowed, and Subchapter B, Student Attendance Accounting
(Adoption of Review)
 

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 129, Student Attendance, Subchapter A, Student Attendance Allowed, and Subchapter B, Student Attendance Accounting. Subchapter A addresses free attendance in general, and Subchapter B addresses requirements for student attendance accounting for state funding purposes. The statutory authority for the rule review is the Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 129, Subchapters A and B, is the Texas Education Code, §42.004.

COMMITTEE - ACTION
SBOE - ACTION

2. Proposed Amendment to 19 TAC Chapter 129, Student Attendance, Subchapter B, Student Attendance Accounting, §129.21, Requirements for Student Attendance Accounting for State Funding Purposes
(First Reading and Filing Authorization)
 

This item presents for first reading and filing authorization a proposed amendment to 19 TAC Chapter 129, Student Attendance, Subchapter B, Student Attendance Accounting, §129.21, Requirements for Student Attendance Accounting for State Funding Purposes. The amendment would modify the requirements for taking attendance for board-approved off-campus activities to allow paraprofessionals to take attendance. Statutory authority for this action is the Texas Education Code (TEC), §42.004 and §12.106.

COMMITTEE - ACTION
SBOE - ACTION

3. Review of Permanent School Fund Securities Transactions and the Investment Portfolio 

Investment staff will report on the transactions executed during the months of December 2015, January and February 2016 in the investment portfolio of the Texas Permanent School Fund.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

4. Ratification of the Purchases and Sales of the Investment Portfolio of the Permanent School Fund for the Months of December 2015, January and February 2016

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 December 2015, January and February 2016. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

5. Report by the State Auditor’s Office on the Audit of the Permanent School Fund’s Financial Statements and Certification of the Bond Guarantee Program for Fiscal Year Ending August 31, 2015

This item provides an opportunity for representatives of the State Auditor’s Office (SAO) to make a presentation regarding the Audit of the Permanent School Fund’s Financial Statements and Bond Guarantee Program for the Fiscal Year Ending August 31, 2015.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

6. Adoption of an Annual Report on the Status of the Bond Guarantee Program

This item provides an opportunity for the committee and board to adopt an annual report on the status of the Bond Guarantee Program. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

7. Fourth Quarter 2015 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 fourth calendar quarter 2015 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

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

9. Overview of the Private Equity Asset Class

This item provides an opportunity for the committee and board to review the private equity investment policy. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

10. Authorization to Issue a Request for Proposals for Global Custody and Securities Lending Services for the Texas Permanent School Fund

This item provides an opportunity for the committee and board to consider the issuance of the Request for Proposals for Global Custody and Securities Lending Services for the Texas Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

11. Proposed Amendments 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
(First Reading and Filing Authorization)

This item presents for first reading and filing authorization proposed amendments 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, to better reflect the Permanent School Fund (PSF) asset allocation and to consolidate some provisions to avoid repetition. Statutory authority for this action is the Texas Education Code (TEC), §§7.102(c)(31) and (33), 43.0031-43.0034, and 43.004; Texas Government Code, §2263.004; and the Texas Constitution, Article VII, Section 5(a)(2), (d), and (f).

COMMITTEE - ACTION
SBOE - 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