THURSDAY
January 31, 2013
10 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-104
Members: Patricia Hardy, Chair; Lawrence A. Allen, Jr.; David Bradley; Thomas Ratliff; and Marty Rowley. 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. Election of Chair
(no agenda exhibit)
State Board of Education (SBOE) operating rules call for each committee to elect a chair from among its members. This item provides an opportunity for each of the SBOE standing committees to elect a chair in the event that the SBOE elects to retain the existing committee structure. The chair may appoint a vice chair. If the board changes the committee structure, the committee may elect a member to preside over this first meeting only. Statutory authority for this action is the Texas Education Code, §7.107.
COMMITTEE - ACTION
SBOE - NO ACTION
2. Overview of the Permanent School Fund
The committee will receive an overview of the Permanent School Fund with a discussion of the Fund’s asset allocation and staff operations.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
3. Per Capita Apportionment Rate for the 2012-2013 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 set the rate at $373.878 at its July 2012 meeting and adopted a revised rate of $406.100 at its November 2012 meeting. Since the November 2012 meeting, the School Land Board has transferred an additional $300 million into the Available School Fund, allowing for another increase in the per capita rate. A further revised rate of $471.048 for the 2012-2013 school year is recommended. Statutory authority for this action is the Texas Education Code, (TEC) §42.004 and §43.001(b).
COMMITTEE - ACTION
SBOE - ACTION
4. Adoption of the Review of 19 TAC Chapter 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts
(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 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts. The rules in Subchapter B address the historically underutilized business (HUB) program and procedures relating to protest for purchasing issues and dispute resolution, in accordance with Texas Government Code requirements. The statutory authority for the rule review is Texas Government Code, §2001.039. The statutory authority for 19 TAC Chapter 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts, is Texas Government, §§2161.003, 2155.076, and 2260.52.
COMMITTEE - ACTION
SBOE - CONSENT
5. Review of Permanent School Fund Securities Transactions and the Investment Portfolio
Investment staff will report on the transactions executed during the months of October and November 2012 in the investment portfolio of the Texas Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
6. Ratification of the Purchases and Sales of the Investment Portfolio of the Permanent School Fund for the Months of October and November 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 October and November 2012. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
7. Annual Reporting Requirement of the Internally Managed Permanent School Fund Investment Portfolio
This item provides an opportunity for the Executive Administrator and Chief Investment Officer of the Permanent School Fund to report on various items required by 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
8. Presentation by BlackRock Investment Management, LLC on Investment Management Services Provided to the Permanent School Fund
This item provides an opportunity for the committee to receive a presentation from BlackRock Investment Management, LLC on investment management services provided by the firm to the Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
9. Presentation by Private Equity Separate Account Managers on Investment Management Services Provided to the Permanent School Fund
This item provides an opportunity for the committee to hear a presentation by private equity separate account managers on investment management services provided to the Permanent School Fund.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
10. Decision on the Private Equity Structure of the Permanent School Fund
This item provides an opportunity for the committee and board to consider the current private equity structure of the Permanent School Fund and to consider alternative structures. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
11. Education on Emerging Market Debt
The State Board of Education (SBOE) approved an allocation of 5% to emerging market debt at the July 2012 meeting. This item will be an education session on the asset class.
COMMITTEE - DISCUSSION
SBOE - NO ACTION
12. Authorization to Issue a Request for Proposals for Emerging Market Debt Local Currency Discretionary Investment Managers
This item provides an opportunity for the committee and board to approve the issuance of a request for proposals for emerging market debt local currency discretionary investment managers. Statutory authority for this action is the Texas Constitution, Article VII, §5(f).
COMMITTEE - ACTION
SBOE - CONSENT
13. 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. The committee will direct investment staff regarding future agenda items.
COMMITTEE - DISCUSSION
SBOE - NO ACTION