June 2017 Committee on School Finance Permanent School Fund

THURSDAY
June 22, 2017

9 a.m.

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-104
Members: David Bradley, Chair; Tom Maynard, Vice Chair; Lawrence A. Allen, Jr.;
Patricia Hardy; 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. Proposed Amendment to 19 TAC Chapter 105, Foundation School Program, Subchapter A, Definitions, §105.1, Rules for the Definition of Tax Levy and Tax Collection
(First Reading and Filing Authorization)
 

This item presents for first reading and filing authorization a proposed amendment to 19 TAC Chapter 105, Foundation School Program, Subchapter A, Definitions, §105.1, Rules for the Definition of Tax Levy and Tax Collection. The proposed amendment would ensure that the definition of tax collections for purposes of the Texas Education Code (TEC), §42.004, and as used in issuing additional state aid for ad valorem tax credits under the TEC, §42.2515, complies with Texas Tax Code, Chapter 313. Statutory authority for this action is the TEC, §42.004.

COMMITTEE - ACTION
SBOE - CONSENT

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

Investment staff will report on the transactions executed during the months of March and April 2017 in the investment portfolio of the Texas Permanent School Fund.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

3. Ratification of the Purchases and Sales of the Investment Portfolio of the Permanent School Fund for the Months of March and April 2017

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 March and April 2017. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

4. First Quarter 2017 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 first calendar quarter 2017 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

5. Update on Permanent School Fund Related Legislation 

This item provides an opportunity for the committee and board to review legislation from the 85th Legislative Session related to the Permanent School Fund. The committee may take action based on the information. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

6. 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

7. Review of the Permanent School Fund Private Market Policies and Real Estate Tactical Plan

This item provides an opportunity for the committee and board to review the private market policies and real estate tactical plan. 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

8. Proposed Amendments to the Investment Procedures Manual 

This item provides an opportunity for the committee and board to review and adopt proposed amendments to the Investment Procedures Manual. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

9. Selection of Qualified Respondents to the Request for Qualifications (RFQ) for Fiduciary Counsel, Alternative Assets Portfolio/Contracting and Tax Counsel for the Permanent School Fund 

This item provides an opportunity for the committee and board to review and approve a list of qualified candidates who responded to the request for qualifications (RFQ 701-17-026) for outside legal counsel for the State Board of Education and the Texas Permanent School Fund: fiduciary, investment contracting, real estate, tax and disclosure counsel. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).

COMMITTEE - ACTION
SBOE - CONSENT

10. Review of the Public Market Equities Asset Classes 

This item provides an opportunity for the committee to review the private market equities asset classes.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

11. Review of the Permanent School Fund Administrative Budget 

This item provides an opportunity for the committee to receive an update on the Permanent School Fund Administrative Budget as appropriated in the General Appropriations Act (GAA).

COMMITTEE - DISCUSSION
SBOE - NO ACTION

12. Presentation of the Permanent School Fund’s Current Asset Allocation 

This item provides an opportunity for the committee to receive a presentation regarding the Permanent School Fund’s current asset allocation.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

13. Review of the Request for Proposal (RFP) Process 

This item provides an opportunity for the committee to receive a presentation regarding the Request for Proposal (RFP) process.

COMMITTEE - DISCUSSION
SBOE - NO ACTION

14. 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

15. Per Capita Apportionment Rate for the 2016-2017 School Year 

The board is responsible for setting a per capita apportionment rate for each school year based on an estimate of the amount available for expenditures from the Available School Fund. The board adopted a preliminary 2016-2017 per capita apportionment rate of $390.186 in September 2016. Agency staff members will propose a recommended revised rate of $390.300 for the 2016-2017 school year at the June meeting of the Committee on School Finance/Permanent School Fund. Statutory authority for this action is the Texas Education Code (TEC), §42.004 and §43.001(b).

COMMITTEE - ACTION
SBOE - CONSENT