| (a) Statutory provision. The commissioner of education
must administer the guarantee program for open-enrollment charter
school bonds according to the provisions of Texas Education Code (TEC),
Chapter 45, Subchapter C.
(b) Definitions. The following definitions apply to
the guarantee program for open-enrollment charter school bonds.
(1) Amortization expense--the annual expense of any
debt and/or loan obligations.
(2) Annual debt service--payments of principal and
noncapitalized interest on outstanding bonded debt scheduled to occur
during a charter district's fiscal year as reported by the Municipal
Advisory Council (MAC) of Texas or its successor, if the charter district
is responsible for outstanding bonded indebtedness.
(A) The annual debt service will be determined by the
current report of the bonded indebtedness of the charter district
as reported by the MAC of Texas or its successor as of the date of
the application deadline.
(B) Solely for the purpose of this calculation, the
debt service amounts for variable rate bonds will be those that are
published in the final official statement or, if there is no official
statement, debt service amounts based on the maximum rate permitted
by the bond resolution or other bond proceeding that establishes a
maximum interest rate for the bonds.
(C) Annual debt service includes required payments
into a sinking fund as authorized under 26 United States Code (USC) §54A(d)(4)(C),
provided that the sinking fund is maintained by a trustee or other
entity approved by the commissioner that is not under the control
or common control of the charter district.
(3) Application deadline--the last business day of
the month in which an application for a guarantee is filed. Applications
must be submitted electronically through the website of the MAC of
Texas or its successor by 5:00 p.m. on the last business day of the
month to be considered in that month's application processing. This
application deadline does not apply to applications for issues to
refund bonds previously guaranteed by the Bond Guarantee Program.
(4) Board resolution--the resolution adopted by the
governing body of an open-enrollment charter holder that:
(A) requests guarantee of bonds through the Bond Guarantee
Program; and
(B) authorizes the charter holder's administration
to pursue bond financing.
(5) Bond--a debt security issuance approved by the
attorney general, issued under TEC, Chapter 53, to provide long-term
financing with a maturity schedule of at least three years.
(6) Bond Guarantee Program (BGP)--the guarantee program
that is described by this section and established under TEC, Chapter
45, Subchapter C.
(7) Bond resolution--the resolution, indenture, or
other instrument adopted by the governing body of an issuer of bonds
authorizing the issuance of bonds for the benefit of a charter district.
(8) Charter district--an open-enrollment charter holder
designated as a charter district under subsection (e) of this section,
as authorized by TEC, §12.135.
(9) Combination issue--an issuance of bonds for which
an application for a guarantee is filed that includes both a new money
portion and a refunding portion, as permitted by TEC, Chapter 53.
The eligibility of combination issues for the guarantee is limited
by the eligibility of the new money and refunding portions as defined
in this subsection.
(10) Debt service coverage ratio--a measure of a charter
district's ability to pay interest and principal with cash generated
from current operations. The debt service coverage ratio (total debt
service coverage on all long-term capital debt) equals the excess
of revenues over expenses plus interest expense plus depreciation
expense plus amortization expense, all divided by annual debt service.
The calculation can be expressed as: (Excess of revenues over expenses
+ interest expense + depreciation expense + amortization expense)/
annual debt service.
(11) Depreciation expense--the audited amount of depreciation
that was expensed during the fiscal period.
(12) Educational facility--a classroom building, laboratory,
science building, faculty or administrative office building, or other
facility used exclusively for the conduct of the educational and administrative
functions of a charter school.
(13) Foundation School Program (FSP)--the program established
under TEC, Chapters 41, 42, and 46, or any successor program of state
appropriated funding for school districts in the state of Texas.
(14) Long-term debt--any debt of the charter district
that has a term of greater than three years and is secured on a parity
basis with the bonds to be guaranteed.
(15) Maximum annual debt service--as of any date of
calculation, the highest annual debt service requirements with respect
to all outstanding long-term debt for any succeeding fiscal year.
(16) Nationally recognized investment rating firm--an
investment rating firm that is designated by the United States Securities
and Exchange Commission as a nationally recognized statistical rating
organization (NRSRO) and is demonstrating that it has:
(A) had its current NRSRO designation for at least
three consecutive years;
(B) provided credit ratings to each of the following:
(i) fifteen or more fixed income securities denominated
in United States dollars and issued during the immediately preceding
three years;
(ii) ten or more school districts in the United States;
(iii) one or more charter schools in the United States;
and
(C) a documented separation of duties between employees
involved in credit analysis and employees involved in business relationships
with clients.
(17) New money issue--an issuance of revenue bonds
under TEC, Chapter 53, for the purposes of:
(A) the acquisition, construction, repair, or renovation
of an educational facility of an open-enrollment charter school and
equipping real property of an open-enrollment charter school, provided
that any bonds for student or teacher housing must meet the following
criteria:
(i) the proposed housing is contemplated in the charter
or charter application; and
(ii) the proposed housing is an essential and integral
part of the educational program included in the charter contract;
or
(B) the refinancing of one or more promissory notes
executed by an open-enrollment charter school, each in an amount in
excess of $500,000, that evidence one or more loans from a national
or regional bank, nonprofit corporation, or foundation that customarily
makes loans to charter schools, the proceeds of which loans were used
for a purpose described in subparagraph (A) of this paragraph; or
(C) both.
(18) Open-enrollment charter--this term has the meaning
assigned in §100.1001 of this title (relating to Definitions).
(19) Open-enrollment charter holder--this term has
the meaning assigned to the term "charter holder" in TEC, §12.1012.
(20) Open-enrollment charter school--this term has
the meaning assigned to the term "charter school" in §100.1001
of this title.
(21) Open-enrollment charter school campus--this term
has the meaning assigned to the term "charter school campus" in §100.1001
of this title.
(22) Refunding issue--an issuance of bonds under TEC,
Chapter 53, for the purpose of refunding:
(A) bonds that have previously been issued under that
chapter and have previously been approved by the attorney general;
or
(B) bonds that have previously been issued for the
benefit of an open-enrollment charter school under Vernon's Civil
Statutes, Article 1528m, and have previously been approved by the
attorney general.
(c) Bond eligibility.
(1) Only those combination, new money, and refunding
issues as defined in subsection (b)(9), (17), and (22), respectively,
of this section are eligible to receive the guarantee. The bonds must,
without the guarantee, be rated as investment grade by a nationally
recognized investment rating firm and must be issued on or after September
28, 2011.
(2) Refunding issues must comply with the following
requirements to retain eligibility for the guarantee for the refunding
bonds.
(A) As with any open-enrollment charter holder applying
for approval for the guarantee, the charter holder for which the refunding
bonds are being issued must meet the requirements for charter district
designation specified in subsection (e)(2) of this section and the
requirements for initial approval specified in subsection (f)(3)(A)
of this section.
Cont'd... |
