| (B) determine that credit enhancement of the bonds
will not cause the projected debt service coming due during the remainder
of the fiscal year for bonds provided credit enhancement under this
section to exceed the lesser of:
(i) one-half of the amount of funds due to public schools
from the FSP for the final month of the current fiscal year; or
(ii) one-half of the amount of funds anticipated to
be on hand in the FSP to make payments for the final month of the
current fiscal year; and
(C) determine that the maximum annual debt service
on the bonds provided credit enhancement under this section, during
any state fiscal year, will not exceed the lesser of:
(i) one-half of the amount of funds due to public schools
from the FSP for the final month of the current fiscal year; or
(ii) one-half of the amount of funds anticipated to
be on hand in the FSP to make payments for the final month of the
current fiscal year.
(5) Credit enhancements will be awarded each month
beginning with the districts with the lowest property wealth per ADA
until the amount of funds available to make payments under the SDBEP
from the FSP reaches its net capacity to enhance bonds, as described
in paragraph (4) of this subsection. Credit enhancements will be awarded
to applicants based on the amount available to fully enhance the bond
issue for which the credit enhancement is sought. Applications for
bond issues that cannot be fully enhanced will not receive an award.
The amount of bond issue for which the guarantee or credit enhancement
was requested may not be modified after the monthly application deadline
for the purposes of securing the guarantee or credit enhancement during
the award process.
(6) An application received after the application deadline
will be considered a valid application for the subsequent month, unless
withdrawn by the submitting district before the end of the subsequent
month.
(7) Each district that submits a valid application
will be notified of the application status within 15 business days
of the application deadline. If a district is awarded approval for
the credit enhancement as described in subsection (d)(2) of this section,
the bonds must be approved by the Office of the Attorney General within
180 days of the date of the letter granting the approval for the credit
enhancement. The approval for the credit enhancement 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 district before the expiration of the 180-day period.
(8) If a district does not receive a credit enhancement
or for any reason does not receive approval of the bonds from the
Office of the Attorney General within the specified time period, the
district may reapply in a subsequent month. Applications that were
denied a credit enhancement will not be retained for consideration
in subsequent months.
(9) If the bonds are not approved by the Office of
the Attorney General within 180 days of the date of the letter granting
the approval for the credit enhancement, the commissioner will consider
the application withdrawn, and the district must reapply for a credit
enhancement.
(10) Districts may not represent the bonds as approved
for credit enhancement for the purposes of pricing or marketing the
bonds before the date of the letter granting approval for the credit
enhancement.
(f) Eligibility.
(1) For bonds to be eligible for the credit enhancement
under the SDBEP:
(A) bonds must be issued in the manner provided by
the TEC, §45.054;
(B) payments of all of the principal of the bonds must
be scheduled during the first six months of the state fiscal year;
(C) the applicant school district's lowest credit rating
from any credit rating agency may not be the same as or higher than
that of the SDBEP;
(D) the bonded debt for which the credit enhancement
is sought must be structured so that no single annual debt service
payment exceeds two times the quotient produced by dividing the total
proposed annual debt service, as defined in subsection (b)(10) of
this section, for the term of the bonds by the number of years in
the amortization schedule; and
(E) the applicant school district must agree in its
application that the total annual debt service on bonds approved for
the credit enhancement will be paid on or before August 15 of each
state fiscal year.
(2) Refunding issues must comply with the following
requirements to be eligible for the credit enhancement for the refunding
bonds, except that subparagraph (C) of this paragraph does not apply
to a refunding issue that provides long-term financing for notes issued
to provide interim financing.
(A) Only refunding issues as defined in subsection
(b)(11) of this section are eligible for the credit enhancement.
(B) The bonds to be refunded must have been:
(i) previously guaranteed by the PSF under the guarantee
program authorized under §33.65 of this title or provided credit
enhancement under this section;
(ii) issued on or after November 1, 2008, and before
December 16, 2009; or
(iii) issued as notes to provide interim financing
as defined in subsection (b)(9) of this section.
(C) The district must demonstrate that issuing the
refunding bond(s) will result in a net present value savings to the
district and that the refunding bond or bonds will not have a maturity
date later than the final maturity date of the bonds being refunded.
Net present value savings is determined by computing the net present
value of the difference between each scheduled payment on the original
bonds and each scheduled payment on the refunding bonds. Net present
value savings must be computed at the true interest cost of the refunding
bonds.
(D) If a district files an application for a combination
issue, the application will be treated as a single issue for the purposes
of eligibility for the guarantee or the credit enhancement. A credit
enhancement for the combination issue will be awarded only if both
the new money portion and the refunding portion meet all of the applicable
eligibility requirements described in this subsection. The district
making the application must present data to the commissioner that
demonstrate compliance for both the new money portion of the issue
and the refunding portion of the issue.
(E) The refunding transaction must comply with the
provisions of subsection (e)(7) and (9) of this section.
(g) Limitations on access to the credit enhancement.
(1) The commissioner will limit approval for the credit
enhancement to a district with less than the amount of annual debt
service per student in ADA or less than the amount of total debt service
per student in ADA that is specified as the limitation in §33.65
of this title at the time of the application for a guarantee or a
credit enhancement. The limitation will not apply to school districts
that have enrollment growth, as defined in subsection (b)(5) of this
section, of at least 25%, based on TSDS PEIMS data on enrollment available
at the time of application. The annual debt service amount is the
amount defined by §33.65(b)(1) of this title. The total debt
service amount is the amount defined by subsection (b)(13) of this
section.
(2) The eligibility of bonds to receive the credit
enhancement is limited to those new money, refunding, and combination
issues as defined in subsection (b)(8), (11), and (4), respectively,
of this section.
(h) Financial exigency. A school district that declares
a financial exigency must designate the fiscal year to which the exigency
applies. A state of financial exigency expires at the end of that
fiscal year unless renewed or may be terminated by action of the board
of trustees at any time before the end of the fiscal year.
(1) Declaration for current fiscal year.
(A) Application for credit enhancement of new money
issue. The commissioner will deny approval of an application for the
credit enhancement of a new money issue if the applicant school district
has declared a state of financial exigency for the district's current
fiscal year. The denial of approval will be in effect for the duration
of the applicable fiscal year unless the district can demonstrate
financial stability.
(B) Approval granted before declaration. If in a given
district's fiscal year the commissioner grants approval for the credit
enhancement of a new money issue and the school district subsequently
declares a state of financial exigency for that same fiscal year,
the district must immediately notify the commissioner and may not
offer the bonds for sale unless the commissioner determines that the
district may proceed.
Cont'd... |
