November 2020 Committee on School Finance/Permanent School Fund
THURSDAY
November 19, 2020
9:00 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND - Room 1-104
Members: Tom Maynard, chair; Lawrence A. Allen, Jr., vice chair; Donna Bahorich; 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. Approval of Costs to Administer the 2020–2021 State-Developed Assessments to Private School Students
Texas Education Code, §39.033, allows a private school to voluntarily assess its students with the State of Texas Assessments of Academic Readiness (STAAR®) and the Texas English Language Proficiency Assessment System (TELPAS) assessments. The State Board of Education (SBOE) must approve 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 2020–2021 school year. Statutory authority for this action is the Texas Education Code (TEC), §39.033.
COMMITTEE – ACTION
SBOE – CONSENT
2. Discussion of Proposed Amendment to 19 TAC Chapter 109, Budgeting, Accounting, and Auditing, Subchapter C, Adoptions By Reference, §109.41, Financial Accountability System Resource Guide
This item provides an opportunity for the committee to discuss a proposed amendment to 19 Texas Administrative Code (TAC) Chapter 109, Budgeting, Accounting, and Auditing, Subchapter C, Adoptions By Reference, §109.41, Financial Accountability System Resource Guide. The proposed amendment would adopt by reference the updated Financial Accountability System Resource Guide (FASRG). Statutory authority for this item is the Texas Education Code (TEC), §§7.055(b)(32), 7.102(c)(32), 44.001(a) and (b), 44.007(a)-(d), and 44.008(b).
COMMITTEE – DISCUSSION
SBOE – NO ACTION
3. Rule Review of 19 TAC Chapter 30, Administration, Subchapter B, State Board of Education: Purchasing and Contracts
Texas Government Code (TGC), §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 review of 19 Texas Administrative Code (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 TGC, §2001.039. The statutory authority for 19 TAC Chapter 30, Subchapter B, is TGC, §§2161.003, 2155.076, and 2260.052.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
4. Review of Permanent School Fund Securities Transactions and the Investment Portfolio
Investment staff will report on the transactions executed during the months of July, August, and September 2020 in the investment portfolio of the Texas Permanent School Fund. Statutory authority for this item is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
5. Ratification of the Purchases and Sales of the Investment Portfolio of the Permanent School Fund for the Months July, August, and September 2020
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 July, August, and September 2020. Statutory authority for this action is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – ACTION
SBOE – CONSENT
6. Approval of an Extension of the Standard Contract with NEPC, LLC and Authorization for Contract Execution by the Commissioner of Education
This item provides an opportunity for the committee and board to extend the standard contract with NEPC, LLC, and authorize contract execution by the commissioner of education. Statutory authority for this action is the Texas Constitution, Article VII, §2 and §5; Natural Resources Code (NRC), §51.414; 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – ACTION
SBOE – CONSENT
7. Approval of an Extension of the Standard Contract with Blackrock Investment Management, LLC, and Authorization for Contract Execution by the Commissioner of Education
This item provides an opportunity for the committee and board to extend the standard contract with Blackrock Investment Management, LLC, and authorize contract execution by the commissioner of education. Statutory authority for this action is the Texas Constitution, Article VII, §2 and §5; Natural Resources Code (NRC), §51.414; 19 Texas Administrative Code (TAC), Chapter 33.
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 Section D, Strategic Asset Allocation Plan, Section E, Asset Allocation Rebalancing Procedure, Section F, Standards of Performance of the Investment Procedures Manual. Statutory authority for this action is the Texas Constitution, Article VII, §5 and §2; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – ACTION
SBOE – CONSENT
9. 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. The proposed amendments would improve and clarify how the rule applies to investments of the Permanent School Fund (PSF) in investment funds. Statutory authority for this action is the Texas Constitution, Article VII, §5(a)(2), (d), and (f); Texas Education Code (TEC), §§7.102(c)(31) and (33), 43.0031-43.0034, and 43.004; and Texas Government Code, §2263.004.
COMMITTEE – ACTION
SBOE – CONSENT
10. Authorization to Issue a Request for Qualifications for Fiduciary, Investment Contracting, Real Estate, Tax and Disclosure 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, investment contracting, real estate, tax and disclosure counsel for the Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5 and §2; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEES – ACTION
SBOE – CONSENT
11. Authorization to Issue a Request for Proposals for High Yield Bonds Discretionary Investment Managers for the Permanent School Fund
This item provides the opportunity for the committee and board to approve the issuance of a Request for Proposals for High Yield Bonds Discretionary Investment Managers for the Permanent School Fund. Statutory authority for this action is the Texas Constitution, Article VII, §5 and §2; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEES – ACTION
SBOE – CONSENT
12. Report on the Permanent School Fund Liquid Account
This item provides an opportunity for the committee and board to receive a status update on the liquid account and to take action to ratify transactions. Statutory authority for this action is the Texas Constitution, Article VII, §5 and §2; Natural Resources Code (NRC), §51.414; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEES – ACTION
SBOE – CONSENT
13. Report of the Permanent School Fund Executive Administrator and Chief Investment Officer
The Permanent School Fund (PSF) executive administrator will report to the committee on matters relating to the management of the PSF and the Charter District Reserve Fund. The report may 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 may 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 may provide an analysis of current and future investment market conditions, focusing upon the impact on the holdings of the PSF. Statutory authority for this item is the Texas Constitution, Article VII, §5 and §2; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEES – DISCUSSION
SBOE – NO ACTION