WEDNESDAY
November 16, 2011
9 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-104
Members: Pat Hardy, Chair; Lawrence A. Allen, Jr.; David Bradley; Bob Craig; and 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 at http://www.tea.state.tx.us/index4.aspx?id=2147497741.
1. Approval of Costs of Administering the 2011-2012 State of Texas Assessments of Academic Readiness (STAAR™) and Texas Assessment of Knowledge and Skills (TAKS) to Private School Students
Texas Education Code (TEC), §39.033, provides for the voluntary assessment of Texas private school students with the State of Texas Assessments of Academic Readiness (STAAR) and Texas Assessment of Knowledge and Skills (TAKS). The State Board of Education (SBOE) is charged with determining 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 2011-2012 school year. Statutory authority for this action is the TEC, §39.033.
COMMITTEE - ACTION
SBOE - CONSENT
2. Proposed Amendment to 19 TAC Chapter 105, Foundation School Program, Subchapter B, Use of State Funds, §105.11, Maximum Allowable Indirect Cost
(Second Reading and Final Adoption)
This item presents for second reading and final adoption proposed amendment to 19 TAC Chapter 105, Foundation School Program, Subchapter B, Use of State Funds, §105.11, Maximum Allowable Indirect Cost. The proposed amendment would update the rule to reflect a change to the use of special program allotments for indirect or administrative expenses, in accordance with Senate Bill (SB) 1, 82nd Texas Legislature, First Called Session, 2011. No additional changes are recommended since approved for first reading. Statutory authority for this action is the Texas Education Code (TEC), §§42.1541, 42.152(c), 42.151(h), 42.153(b), 42.154(a-1) and (c), and 42.156(b).
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 August and September 2011 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 August and September 2011
This item provides an opportunity for the committee and board to consider approval of the purchases and sales of securities executed in the portfolio of the Permanent School Fund for the months of August and September 2011. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
5. Third Quarter of 2011 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 of 2011 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
6. Authorization to Issue a Request for Proposals for Commodities in the Real Return Asset Class
This item provides an opportunity for the committee and board to approve the issuance of a request for proposals for commodities in the real return asset class. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
7. Adoption of Review of 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund
(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 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund. The rules being reviewed establish definitions, requirements, and procedures for the investment of the Permanent School Fund. The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 33 is Texas Education Code (TEC), §§7.102(c)(31) and (33), 43.0031-43.0034, 43.004, and 45.063; Texas Government Code, §2263.004; and Texas Constitution, Article VII, §5(a)(2), (d), and (f).
COMMITTEE - ACTION
SBOE - CONSENT
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. Consideration of the Development of Strategic Relationships Within the Absolute Return Asset Class
This item provides an opportunity for the committee and board to review the development of strategic relationships within the absolute return asset class in order to reduce management fees. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - ACTION
10. Review of Permanent School Fund Governance and Staffing
This item provides the committee the opportunity to review Permanent School Fund governance and staffing.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
11. 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, 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. The committee will direct investment staff regarding future agenda items.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
* If the Committee on School Finance/Permanent School Fund does not complete its agenda Wednesday, it will resume its meeting in Room 1-100 upon adjournment of the Committee of the Full Board on Thursday.
NOTE: The chair may permit the board to take up and discuss any of the discussion items on a committee agenda, including hearing any invited presentations to a committee, based upon a recommendation from the committee or inability of the committee to complete its agenda on a preceding day.