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RULE §293.54Bond Anticipation Notes (BANs)

A district may issue bond anticipation notes (BANs) for any purpose for which bonds of the district may be issued or for the purpose of refunding previously issued BANs. All BANs issued by a district shall conform to the following requirements.

  (1) A bond application containing all projects to be financed by the BAN and the principal of and interest on the BAN shall be on file with the commission.

  (2) The financial advisor of the district renders a written opinion to the district to the effect that, based on the projections contained in the bond application report, the district can be reasonably expected to sell its bonds, under prevailing market conditions existing at the time of the sale of the BAN, in a principal amount at least sufficient to redeem and pay the principal of, and accrued interest on, the BAN on or prior to their stated maturity date.

  (3) The proceeds of the BAN may be used to pay only the district's allowable share of the costs of facilities as provided in §293.47 of this title (relating to Thirty Percent of District Construction Costs to be Paid by Developer) until the commission has unconditionally determined that the district is exempt from developer participation.

  (4) The interest rate on the BAN shall be limited to the maximum rate at which the district could have issued bonds on the date of issuance of the BAN pursuant to applicable statute or valid city consent.

  (5) All BANs shall be sold at par.

  (6) The proceedings authorizing the issuance of the BAN shall provide that the BAN shall be redeemed at not more than its par value within 30 days after receipt of proceeds from bonds issued for the purpose of redeeming the BAN.

  (7) No district funds shall be used to purchase bond or BAN insurance, collateral guarantees, letters of credit, or other forms of credit enhancement.

  (8) No BAN proceeds shall be used for the purpose of paying allowable developer interest, as provided in §293.50 of this title (relating to Developer Interest Reimbursement).

  (9) Except as hereinafter otherwise provided, BANs shall not be used to finance facilities unless the plans and specifications therefor have been approved by all regulatory authorities having jurisdiction thereof and such plans and specifications have been submitted to the executive director in connection with the district's pending bond application.

  (10) Issuance of BANs shall not prejudice the right of the commission to refuse to approve all or any portion of a bond application or any cost or facility contained therein.

  (11) BANs shall be payable solely from the proceeds of the district's bonds, as approved by the commission, and no other district funds shall be encumbered, pledged, committed or used for such purpose.

  (12) Prior to the issuance of the BAN, the developer shall provide the district a letter of credit, irrevocable development loan commitment, or other guarantee for the applicable contribution of construction and engineering costs for each project to be financed with BAN proceeds as required by §293.47(h) of this title.

  (13) Prior to the issuance of the BANs, the developer and district shall enter into a street and road construction agreement as required by §293.48 of this title (relating to Street and Water, Wastewater and Drainage Utility (Street and Utility) Construction by Developer), unless exempted or inapplicable pursuant to §293.59(k)(11) of this title (relating to Economic Feasibility of Project).

Source Note: The provisions of this §293.54 adopted to be effective September 5, 1986, 11 TexReg 3736; amended to be effective June 5, 1998, 23 TexReg 5715; amended to be effective September 14, 2000, 25 TexReg 8955; amended to be effective November 13, 2014, 39 TexReg 8730

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