| (A) Under the TEC, §45.056, the commissioner will
investigate the applicant school district's accreditation status and
financial status. A district must be accredited and financially sound
to be eligible for approval by the commissioner. The commissioner's
review will include the following:
(i) the purpose of the bond issue;
(ii) the district's accreditation status as defined
by §97.1055 of this title (relating to Accreditation Status)
in accordance with the following:
(I) if the district's accreditation status is Accredited,
the district will be eligible for consideration for the credit enhancement;
(II) if the district's accreditation status is Accredited-Warned
or Accredited-Probation, the commissioner will investigate the underlying
reason for the accreditation rating to determine whether the accreditation
rating is related to the district's financial soundness. If the accreditation
rating is related to the district's financial soundness, the district
will not be eligible for consideration for the credit enhancement;
or
(III) if the district's accreditation status is Not
Accredited-Revoked, the district will not be eligible for consideration
for the credit enhancement;
(iii) the district's compliance with statutes and rules
of the TEA; and
(iv) the district's financial status and stability,
regardless of the district's accreditation rating, including approval
of the bonds by the Office of the Attorney General under the provisions
of the TEC, §45.0031 and §45.005.
(B) The commissioner will grant or deny approval for
the credit enhancement based on the review described in subparagraph
(A) of this paragraph and will provide an applicant district whose
application has received or been denied approval for the credit enhancement
written notice of approval or denial. Notice of denial will include
the reasons for denial.
(e) Application processing. To facilitate prioritization
of applications for the guarantee authorized under §33.65 of
this title, or for the credit enhancement authorized under this section,
if the PSF capacity has been exhausted, all applications received
during a calendar month will be held until the fifteenth business
day of the subsequent month. On the fifteenth business day of each
month, the commissioner of education will announce the results of
the prioritization described in paragraph (5) of this subsection.
If the PSF capacity has been exhausted, the commissioner will process
the application for approval for the credit enhancement up to the
available capacity of money appropriated for the FSP for credit enhancement
under this section as of the application deadline, subject to the
requirements of this subsection.
(1) The school district may not submit an application
for a guarantee or credit enhancement before the successful passage
of an authorizing proposition.
(2) The actual credit enhancement of the bonds is subject
to the approval process prescribed in subsection (d) of this section.
(3) During those periods in which the PSF capacity
has been exhausted, the commissioner in each month of each fiscal
year will estimate the amount of funds available to make payments
under the SDBEP from the FSP through the end of the fiscal year for
purposes of providing approval for the credit enhancement of school
district bonds under this section. The commissioner will confirm that
a sufficient amount of these funds exists to enhance the credit of
the bonds before the issuance of the approval for the credit enhancement
in accordance with subsection (d)(2) of this section. The amount of
funds available to make payments under the SDBEP from the FSP is limited
as described in paragraph (4) of this subsection and does not include:
(A) Available School Fund (ASF) funds;
(B) any FSP funds designated for the facilities programs
provided for under the TEC, Chapter 46;
(C) any funds designated for the charter school credit
enhancement program provided for under the TEC, Chapter 45, Subchapter
J; or
(D) any federal funds, including federal funds provided
by the American Recovery and Reinvestment Act of 2009.
(4) Before approving school district bonds for credit
enhancement under the SDBEP, the commissioner must:
(A) make the determination described in paragraph (3)
of this subsection;
(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
Cont'd... |
