WEDNESDAY
April 18, 2012
9 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-100
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. Adoption of Review of 19 TAC Chapter 129, Student Attendance, Subchapter A, Student Attendance Allowed, and Subchapter B, Student Attendance Accounting
(Adoption of Review)
The 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 - CONSENT
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 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 proposed amendment would amend the rule to make it more logically organized, to delete obsolete provisions, and to update provisions describing conditions under which a student who is not on campus at attendance time may be considered in attendance. The proposed amendment would also remove language that duplicates statutory language and replace it with a reference to the applicable statute. Statutory authority for this action is the Texas Education Code (TEC), §42.004.
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 2011, January and February 2012 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 2011, January and February 2012
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 December 2011, January and February 2012. 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 for the Period Ending August 31, 2011
This item provides an opportunity for representatives of the State Auditor’s Office (SAO) to make a presentation regarding the audit of the financial statements of the Permanent School Fund for the period ending
August 31, 2011 and material accounts of the Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
6. Fourth 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 fourth 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
7. Authorization to Issue a Request for Qualifications (RFQ) for Fiduciary Counsel, Alternative Assets Portfolio/Contracting and Tax Counsel for the Permanent School Fund
This item provides the opportunity for the committee and board to approve the issuance of a request for qualifications for fiduciary counsel, alternative assets portfolio/contracting and tax counsel for the Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
8. Proposed Amendments to 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund
(Second Reading and Final Adoption)
This item presents for second reading and final adoption proposed amendments to 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund. The proposed amendments would implement changes reflecting the November 8, 2011, voter approval of Proposition 6, the constitutional amendment that expanded the base by which Permanent School Fund distributions to the Available School Fund are calculated. Additional changes are also proposed that would clarify current procedures and policies. 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 Texas Constitution, Article VII, §5(a)(2), (d), and (f).
COMMITTEE - ACTION
SBOE - ACTION
9. 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
10. Approval of One or More Strategic Relationships from the Current Absolute Return Fund of Hedge Fund Investment Managers for the Permanent School Fund
This item provides the opportunity for the committee and board to approve one or more strategic relationships from the current absolute return fund of hedge fund investment managers for the Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - 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