| (C) The commissioner will grant or deny initial approval
for the guarantee based on the review described in subparagraph (A)
of this paragraph and the limitation described in subparagraph (B)
of this paragraph and will provide an applicant charter district whose
application has received initial approval for the guarantee written
notice of initial approval.
(4) Final approval. The provisions of this paragraph
apply only as described in paragraph (2) of this subsection. A charter
district must receive final approval before completing the sale of
the bonds for which the charter district has received notification
of initial approval.
(A) A charter district that has received initial approval
must provide a written notice to TEA two business days before issuing
a preliminary official statement (POS) for the bonds that are eligible
for the guarantee or two business days before soliciting investment
offers, if the bonds will be privately placed without the use of a
POS.
(i) The charter district must receive written confirmation
from TEA that the capacity continues to be available and must continue
to meet the requirements of subsection (e)(2) of this section before
proceeding with the public or private offer to sell bonds.
(ii) TEA will provide this notification within one
business day of receiving the notice of the POS or notice of other
solicitation offers to sell the bonds.
(B) A charter district that received confirmation from
TEA in accordance with subparagraph (A) of this paragraph must provide
written notice to TEA of the placement of an item to approve the bond
sale on the agenda of a meeting of the bond issuer's board of directors
no later than two business days before the meeting. If the bond sale
is completed pursuant to a delegation by the issuer to a pricing officer
or committee, notice must be given to TEA no later than two business
days before the execution of a bond purchase agreement by such pricing
officer or committee.
(i) The charter district must receive written confirmation
from TEA that the capacity continues to be available for the bond
sale before the approval of the sale by the bond issuer or by the
pricing officer or committee.
(ii) TEA will provide this notification within one
business day before the date that the bond issuer expects to complete
the sale by official action of the bond issuer or of a pricing officer
or committee.
(C) TEA will process requests for final approval from
charter districts that have received initial approval on a first come,
first served basis. Requests for final approval must be received before
the expiration of the initial approval.
(D) A charter district may provide written notification
as required by this paragraph by facsimile transmission, by email,
or in another manner prescribed by the commissioner.
(5) Charter district responsibilities on receipt of
approval.
(A) Once a charter district is awarded initial approval
for the guarantee, each issuance of the bonds must be approved by
the attorney general within 180 days of the date of the letter granting
the approval for the guarantee. The initial approval for the guarantee
will expire at the end of the 180-day period. The commissioner may
extend the 180-day period, based on extraordinary circumstances, on
receiving a written request from the charter district or the attorney
general before the expiration of the 180-day period.
(B) If applicable, the charter district must comply
with the provisions for final approval described in paragraph (4)
of this subsection to maintain approval for the guarantee.
(C) If the bonds are not approved by the attorney general
within 180 days of the date of the letter granting the approval for
the guarantee, the commissioner will consider the application withdrawn,
and the charter district must reapply for a guarantee.
(D) A charter district may not represent bonds as guaranteed
for the purpose of pricing or marketing the bonds before the date
of the letter granting approval for the guarantee.
(E) The charter district must provide evidence of the
final investment grade rating of the bonds to TEA after receiving
initial approval but before the distribution of the preliminary official
statement for the bonds or, if the bonds are offered in a private
placement, before approval of the bond sale by the governing body
of the charter district.
(F) A charter district must identify by legal description
any educational facility purchased or improved with bond proceeds
no later than 30 days after entering into a binding commitment to
expend bond proceeds for that purpose. The charter district must identify
at that time whether and to what extent debt service will be paid
with any source of revenue other than state funds.
(g) Allocation of specific holdings. If necessary to
successfully operate the BGP, the commissioner may allocate specific
holdings of the PSF to specific bond issues guaranteed under this
section. This allocation will not prejudice the right of the SBOE
to dispose of the holdings according to law and requirements applicable
to the fund; however, the SBOE will ensure that holdings of the PSF
are available for a substitute allocation sufficient to meet the purposes
of the initial allocation. This allocation will not affect any rights
of the bond holders under law.
(h) Defeasance. The guarantee will be completely removed
when bonds guaranteed by the BGP are defeased, and such a provision
must be specifically stated in the bond resolution. If bonds guaranteed
by the BGP are defeased, the charter district must notify the commissioner
in writing within ten calendar days of the action.
(i) Payments. For purposes of the provisions of TEC,
Chapter 45, Subchapter C, matured principal and interest payments
are limited to amounts due on guaranteed bonds at scheduled maturity,
at scheduled interest payment dates, and at dates when bonds are subject
to mandatory redemption, including extraordinary mandatory redemption,
in accordance with their terms. All such payment dates, including
mandatory redemption dates, must be specified in the bond order or
other document pursuant to which the bonds initially are issued. Without
limiting the provisions of this subsection, payments attributable
to an optional redemption or a right granted to a bondholder to demand
payment on a tender of such bonds according to the terms of the bonds
do not constitute matured principal and interest payments.
(j) Guarantee restrictions. The guarantee provided
for eligible bonds under the provisions of TEC, Chapter 45, Subchapter
C, is restricted to matured bond principal and interest. The guarantee
applies to all matured interest on eligible bonds, whether the bonds
were issued with a fixed or variable interest rate and whether the
interest rate changes as a result of an interest reset provision or
other bond resolution provision requiring an interest rate change.
The guarantee does not extend to any obligation of a charter district
under any agreement with a third party relating to bonds that is defined
or described in state law as a "bond enhancement agreement" or a "credit
agreement," unless the right to payment of such third party is directly
as a result of such third party being a bondholder.
(k) Notice of default. A charter district that has
determined that it is or will be unable to pay maturing or matured
principal or interest on a guaranteed bond must immediately, but not
later than the fifth business day before the maturing or matured principal
or interest becomes due, notify the commissioner.
(l) Charter District Bond Guarantee Reserve Fund. The
Charter District Bond Guarantee Reserve Fund is a special fund in
the state treasury outside the general revenue fund and is managed
by the SBOE in the same manner that the PSF is managed by the SBOE.
(m) Payment from Charter District Bond Guarantee Reserve
Fund and PSF.
(1) Immediately after the commissioner receives the
notice described in subsection (k) of this section, the commissioner
will notify the Texas PSF Corporation of the notice of default and
instruct the comptroller to transfer from the Charter District Bond
Guarantee Reserve Fund established under TEC, §45.0571, to the
charter district's paying agent the amount necessary to pay the maturing
or matured principal or interest.
(2) If money in the reserve fund is insufficient to
pay the amount due on a bond under paragraph (1) of this subsection,
the commissioner will instruct the comptroller to transfer from the
appropriate account in the PSF to the charter district's paying agent
the amount necessary to pay the balance of the unpaid maturing or
matured principal or interest.
(3) Immediately after receipt of the funds for payment
of the principal or interest, the paying agent must pay the amount
due and forward the canceled bond or coupon to the comptroller. The
comptroller will hold the canceled bond or coupon on behalf of the
fund or funds from which payment was made.
Cont'd... |
