January 2022 Committee on School Finance/Permanent School Fund
THURSDAY
January 27, 2022
9:00 a.m.
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND – Room 1-104
Members: Tom Maynard, chair; Lawrence A. Allen, Jr., vice chair; Keven Ellis; Patricia Hardy; Marisa Perez-Diaz. 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. 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 is the Texas Education Code (TEC), §§7.102(c)(32), 44.007(a)-(d), and 44.008(b).
COMMITTEE – DISCUSSION
SBOE – NO ACTION
2. 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 2021 in the investment portfolio of the Texas Permanent School Fund. Statutory authority is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
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 October and November 2021
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 (PSF) for the months of October and November 2021. Statutory authority is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – ACTION
SBOE – CONSENT
4. Report on Permanent School Fund Liquid Account and Ratification of Purchases and Sales for the Months of October and November 2021
This item provides an opportunity for the committee and board to receive a status update report on the liquid account and consider approval of the purchases and sales of investments executed in the liquid account for the months of October and November 2021. Statutory authority is the Texas Constitution, Article VII, §2 and §5; Texas Natural Resources Code (NRC), §51.414, as repealed by SB 1232, 87th Legislature, Regular Session, 2021; and 19 Texas Administrative Code (TAC) Chapter 33.
COMMITTEE – ACTION
SBOE – CONSENT
5. 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. Statutory authority is the Texas Constitution, Article VII, §2 and §5, and 19 Texas Administrative Code (TAC) Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
6. Third Quarter 2021 Permanent School Fund Performance Report
The performance measurement consultant to the Permanent School Fund (PSF), BNY Mellon Asset Servicing, will report on the investment performance during the third calendar quarter 2021 and the cumulative investment performance of various portfolios of the PSF. This item provides the opportunity for the committee to discuss in depth, various issues related to portfolio management such as risk characteristics of portfolios and portfolio attributes. Statutory authority is the Texas Constitution, Article VII, §2 and §5; 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
7. Review of the Bond Guarantee Program Capacity
This item provides an opportunity for the committee to receive a presentation on the bond guarantee program’s capacity. Statutory authority is the Texas Constitution, Article VII, §2 and §5; Texas Education Code (TEC) §45.0532; and 19 Texas Administrative Code (TAC) Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
8. Proposed New 19 TAC Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund, Subchapter A, State Board of Education Rules, §33.21, Texas Permanent School Fund Corporation
(Second Reading and Final Adoption)
This item presents for second reading and final adoption proposed new 19 Texas Administrative Code (TAC) Chapter 33, Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund, Subchapter A, State Board of Education Rules, §33.21, Texas Permanent School Fund Corporation. The proposed new section would address the term length of State Board of Education (SBOE) members on the board of directors of the Texas Permanent School Fund (PSF) Corporation as required by Senate Bill (SB) 1232, 87th Texas Legislature, Regular Session, 2021. No changes are recommended since approved for first reading. Statutory authority is the Texas Constitution, Article VII, §5(a) and (f); Texas Education Code (TEC), §43.001 and §43.053, as added by SB 1232, 87th Texas Legislature, Regular Session, 2021.
COMMITTEE – ACTION
SBOE – CONSENT
9. Review of the Private Equity Asset Class for the Permanent School Fund
This item provides an opportunity for the committee to review the private equity asset class. Statutory authority is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
10. Review of Real Return Asset Class for the Permanent School Fund
This item provides an opportunity for the committee to receive an overview of the real return asset class. Statutory authority is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION
11. 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 is the Texas Constitution, Article VII, §2 and §5; and 19 Texas Administrative Code (TAC), Chapter 33.
COMMITTEE – DISCUSSION
SBOE – NO ACTION