| (ii) The 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) The TEA will process requests for final approval
from open-enrollment charter holders 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) An open-enrollment charter holder may provide written
notification as required by this paragraph by facsimile transmission
or by electronic mail in a manner prescribed by the commissioner.
(h) Defeasance. The credit enhancement will be completely
removed when bonds approved for credit enhancement by this CSBEP are
defeased, and such a provision must be specifically stated in the
bond resolution. If bonds approved for credit enhancement by this
CSBEP are defeased, the open-enrollment charter holder must notify
the commissioner in writing within ten calendar days of the action.
(i) Payments. For purposes of the provisions of the
TEC, Chapter 45, Subchapter J, matured principal and interest payments
are limited to amounts due on bonds approved for credit enhancement
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) Credit enhancement restrictions. The credit enhancement
provided for eligible bonds under the provisions of the TEC, Chapter
45, Subchapter J, is restricted to matured bond principal and interest.
The credit enhancement does not extend to any obligation of an open-enrollment
charter holder 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) Report on the use of funds and confirmation of
use of funds by independent auditor. An open-enrollment charter holder
that issues bonds approved for credit enhancement by the CSBEP must
report to the TEA annually in a form prescribed by the commissioner
on the use of the bond funds until all bond proceeds have been spent.
The open-enrollment charter holder's independent auditor must confirm
in the open-enrollment charter holder's annual financial report that
bond funds have been used in accordance with the purpose specified
in the application for the credit enhancement.
(l) Failure to comply with statute or this section.
An open-enrollment charter holder's failure to comply with the requirements
of the TEC, Chapter 45, Subchapter J, or with the requirements of
this section, including by making any misrepresentations in the open-enrollment
charter holder's application for the credit enhancement, constitutes
a material violation of the open-enrollment charter holder's charter.
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