APPRAISER LICENSING & CERTIFICATION BOARD
TEXAS
MEETING AGENDA
Texas Appraiser Licensing & Certification Board
Room 400a, TALCB Headquarters Office
Stephen F. Austin State Office Building
1700 North Congress, Austin, Texas 78701
Thursday, November 20, 2014, 1:00 p.m.
Workshop
1. Call to order
2. Roll call
3. Discussion regarding roles and duties of Board members, including ethics, limitations on
lobbying, and other prohibited activities under Texas law
4. Discussion regarding TALCB Committees:
a.
b.
c.
d.
e.
Executive Committee – Jamie Wickliffe
Budget Committee – Walker Beard
Education Committee – Clayton Black
Enforcement Committee – Laurie Fontana
AMC Advisory Committee – Laurie Fontana
5. Discussion regarding possible legislative changes for 2015 and identification of key legislative
members and committee chairs
6. Texas Public Investment Act training
7. Discussion regarding action items from today to bring forward to future Board meetings
8. Adjourn
The Texas Appraiser Licensing and Certification Board may meet with its attorney in
executive session on any item listed above as authorized by the Texas Open Meetings Act,
Tex. Gov’t Code, §551.071.
P.O. Box 12188 Austin, Texas 78711-2188 ● 512-936-3001 ● www.talcb.texas.gov
AGENDA ITEM 3
AGENDA ITEM 3
AGENDA ITEM 3
AGENDA ITEM 3
AGENDA ITEM 6
Texas Public Funds Investment
Act Compliance
Patrick Shinkle
University of North Texas
Center for Public Management
http://pacs.unt.edu/cpm/
Objectives of this Session
• Understand the history of the PFIA
•
•
•
•
•
Originally approved in 1987
Amended every session of the legislature
Expanded authority until 1995
Expanded controls from 1995 to 1999
1999 on, targeted points of change from specific interests
• Understand the requirements of the PFIA
• Determine whether or not your organization is
in compliance with the PFIA
AGENDA ITEM 6
PFIA Components
Inv. Policies
Strategies
Inv. Officer
External
Policy
Certification
Definitions
Authority
Applicability
Standard
of Care
PFIA
Qualified
Brokers
Inv. Training
Internal
Management
Reports
Authorized
Investments
Chapter 2256, Government Code
• 001. Short Title
• 002. Definitions
• 003. Authority to Invest Funds
– (1) Local Government
– (2) State Agency
– (3) Nonprofit Corporation
– (4) Investment Pool
Investment Management Firm – 2 year term with
renewal options.
AGENDA ITEM 6
Chapter 2256, Government Code
• 005. Investment Policies; Strategies;
Investment Officer
– (a) Adopt an investment policy
– (b) The policies must:
• (1) Be written
• (2) Primarily emphasize safety of principal and liquidity
• (3) Address investment diversification, yield, and
maturity and the quality and capability of investment
management
Chapter 2256, Government Code
• 005. Investment Policies; Strategies;
Investment Officer
– (b) The policies must:
• (4) Include:
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–
–
–
–
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(A) Authorized Investments
(B) Maximum allowable stated maturity
(C) Maximum dollar‐weighted average stated maturity
(D) Methods to monitor market price
(E) Settlement of transactions by delivery vs. payment
(F ) Procedures to monitor rating changes in investments
AGENDA ITEM 6
Chapter 2256, Government Code
• 005. Investment Policies; Strategies; Investment
Officer
– (c) Certificate of deposit bid solicitation methods
• Orally, in writing, electronically or in any combination
– (d) Written investment strategy must address:
•
•
•
•
•
•
(1) Suitability
(2) Preservation and safety of principal
(3) Liquidity
(4) Marketability
(5) Diversification
(6) Yield
Chapter 2256, Government Code
• 005. Investment Policies; Strategies; Investment
Officer
– (e) Governing body must annually review policy and
strategies
– (f) Governing body designates one or more investment
officers but retains ultimate responsibility
***
– (j) Governing body may specify in its policy that any
investment authorized by this chapter is unsuitable.
AGENDA ITEM 6
Chapter 2256, Government Code
• 005. Investment Policies; Strategies;
Investment Officer
– (m) Compliance audit of management controls on
investments and adherence to approved
investment policies performed in conjunction with
annual financial audit
– (n) State agency compliance audit performed at
least once every two years
Chapter 2256, Government Code
• 006. Standard of Care
– (a) Investment of funds shall be governed by the
following investment objectives, in order of
priority:
• (1) Preservation and safety of principal
• (2) Liquidity
• (3) Yield
AGENDA ITEM 6
Chapter 2256, Government Code
• 007. Investment Training; State Agency Board
Members and Officers
– (a) Initial training within 6 months
– (b) Texas Higher Education Coordinating Board
– (c) Investment controls, security risks, strategy
risks, market risks, diversification of investment
portfolio, and compliance
– (d) Not less than once each state fiscal biennium
from an independent source approved by the
governing body (investment officer only)
Chapter 2256, Government Code
• 009. Authorized Investments: Obligations of, or
Guaranteed by Governmental Entities
– (1) Obligations, including letters of credit, of the
United States or its agencies and instrumentalities
– (2) Direct obligations of this state or its agencies and
instrumentalities
– (3) Collateralized mortgage obligations
– (4) Other obligations, guaranteed or insured by or
backed by this state or the United States or their
respective agencies and instrumentalities including
obligations that are fully guaranteed or insured by
the FDIC or by the explicit full faith and credit of the
United States
AGENDA ITEM 6
Chapter 2256, Government Code
• 009. Authorized Investments: Obligations of, or
Guaranteed by Governmental Entities
• The following are not authorized investments:
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–
–
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(1) Interest only
(2) Principal only
(3) CMO greater than 10 years
(4) Inverse floater CMO
Chapter 2256, Government Code
• 017. Existing Investments
– Not required to liquidate investments that were
authorized when purchased
AGENDA ITEM 6
Chapter 2256, Government Code
• 023. Internal Management Reports
– (a) Quarterly written report
– (b) Report includes:
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•
•
•
(1) Investment position
(2) Prepared jointly by all investment officers
(3) Signed by all investment officers
(4) Summary statement:
– (A) Beginning market value
– (B) Ending market value
– (C) Accrued interest
Chapter 2256, Government Code
• 023. Internal Management Reports
– (b) Report includes:
•
•
•
•
(5) Book value and market value
(6) Maturity date
(7) Account or fund
(8) Statement of compliance with investment strategy
and the Act
– (c) Not less than quarterly
– (d) Formally reviewed at least annually by
independent auditor
AGENDA ITEM 6
Chapter 2256, Government Code
• 026. Statutory Compliance
– Comply with all federal, state, and local statutes,
rules or regulations
AGENDA ITEM 6
TEXAS APPRAISER LICENSING & CERTIFICATION BOARD
RESERVE FUNDS INVESTMENT POLICY
OBJECTIVE
The investment objective of the TALCB Reserve Funds is to invest available cash in securities,
which provide both safety and liquidity to meet the ongoing needs of the fund and to demonstrate
compliance with appropriate governing laws.
INVESTMENT STRATEGIES
The investment strategy for the Reserve Funds is to maintain a 'laddered' approach to portfolio
management. Having a relatively even distribution of securities maturing each year helps to
eliminate extreme interest rate exposure. The maximum allowable stated maturity of investments
is ten years.
Cash is held in the Texas Treasury Safekeeping Trust Company (Trust Company). It is fully
invested at all times and reinvested by the Trust in authorized investments for state funds. Interest
is compounded daily with earnings being credited daily.
PERMISSIBLE INVESTMENTS
Permissible investments include primarily, but are not limited to, Direct Obligations of the United
States Treasury (i.e., Treasury Bills, Notes, and bonds). From time to time, Indirect Obligations of
the Treasury or Agency Securities may be considered as an appropriate investment (for example,
Federal National Mortgage Association - FNMA). This will be considered on a case by case basis.
All investment transactions must be settled on a delivery versus payment basis. The securities are
held by the Texas Treasury Safekeeping Trust Company as trustee. The Trust Company monitors
the market price of investments and updates them daily. The Trust Company invests cash as
described in Texas Govt. Code, Sections 404.024 and 404.106 using prudent investment
standards.
REPORTING AND ANNUAL REVIEW
The TALCB will receive quarterly investment reports and will annually review the investment policy
making any changes necessary by adoption. The TALCB’s Budget & Finance Committee will make
periodic recommendations for specific Reserve Fund target balances and potential uses for funds
in excess of such balances (for example – use for specific fee reductions).
(Approved February 15, 2013; Reapproved February 21, 2014)