| (1) Only those combination, new money, and refunding
issues as defined in subsection (b)(7), (10), and (12), respectively,
of this section are eligible to receive the guarantee.
(2) Refunding issues must comply with the following
requirements to retain eligibility for the guarantee 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) As with any district applying for approval for
the guarantee, the district issuing the refunding bonds must meet
the requirements for initial approval specified in subsection (g)(2)(A)
of this section.
(B) The bonds to be refunded must have been:
(i) previously guaranteed by the Permanent School Fund
(PSF) or approved for credit enhancement under §61.1038 of this
title (relating to School District Bond Enhancement Program);
(ii) issued on or after November 1, 2008, and before
January 1, 2010; or
(iii) issued as notes to provide interim financing
as defined in subsection (b)(11) of this section.
(C) The district must demonstrate that issuing the
refunding bond(s) will result in a 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. 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. Present value savings
must be computed at the true interest cost of the refunding bonds.
If the commissioner approves refunding bonds for the guarantee based
on evidence of present value savings but at the time of the sale of
the refunding bonds a present value savings is not realized, the commissioner
may revoke the approval of the bonds for the guarantee.
(D) The refunding transaction must comply with the
provisions of subsection (g)(4)(A)-(C) of this section.
(3) If a district files an application for a combination
issue, the application will be treated as an application for a single
issue for the purposes of eligibility for the guarantee. A guarantee
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 section. As part of its application,
the applicant district must present data that demonstrate compliance
for both the new money portion of the issue and the refunding portion
of the issue.
(4) If the commissioner determines that an applicant
has deliberately misrepresented information related to a bond issue
to secure a guarantee, the commissioner must revoke the approval of
the bonds for the guarantee.
(e) Determination of PSF capacity to guarantee bonds.
(1) Each month the commissioner will estimate the available
capacity of the PSF. If necessary, the commissioner will confirm that
the PSF has sufficient capacity to guarantee the bonds before the
issuance of the final approval for the guarantee in accordance with
subsection (g)(3) of this section. The calculation of capacity will
be based on a multiplier of three and one-half times the cost value
of the PSF with the proviso that under no circumstances could the
capacity of the fund exceed the limits set by federal regulation.
The commissioner may increase or decrease the multiplier to prudently
manage fund capacity and preserve the AAA credit rating of the PSF.
Changes to the multiplier made by the commissioner are to be ratified
or rejected by the State Board of Education (SBOE) at the next meeting
for which the item can be posted.
(2) The SBOE may establish an amount of capacity to
be held in reserve of up to 5.0% of the fund's capacity. The amount
to be held in reserve may be increased or decreased by a majority
vote of the SBOE based on changes in the cost value, asset allocation,
and risk in the portfolio, or may be increased or decreased by the
commissioner as necessary to prudently manage fund capacity and preserve
the AAA credit rating of the PSF. Changes to the amount held in reserve
made by the commissioner are to be ratified or rejected by the SBOE
at the next meeting for which the item can be posted.
(3) The net capacity of the PSF to guarantee bonds
is determined by subtracting the amount to be held in reserve, as
determined under paragraph (2) of this subsection, from the total
available capacity, as described in paragraph (1) of this subsection.
(f) Application process and application processing.
(1) Application submission and fee. A district must
apply to the commissioner for the guarantee of eligible bonds or the
credit enhancement of eligible bonds as authorized under §61.1038
of this title by submitting an application electronically through
the website of the MAC of Texas or its successor. The district must
submit the information required under TEC, §45.055(b), and this
section and any additional information the commissioner may require.
The application and all additional information required by the commissioner
must be received before the application will be processed. The district
may not submit an application for a guarantee or credit enhancement
before the successful passage of an authorizing proposition.
(A) The application fee is $1,500.
(B) The fee is due at the time the application for
the guarantee or the credit enhancement is submitted. An application
will not be processed until the fee has been remitted according to
the directions provided on the website of the MAC of Texas or its
successor and received by TEA.
(C) The fee will not be refunded to a district that:
(i) is not approved for the guarantee or the credit
enhancement; or
(ii) does not sell its bonds before the expiration
of its approval for the guarantee or the credit enhancement.
(D) The fee may be transferred to a subsequent application
for the guarantee or the credit enhancement by the district if the
district withdraws its application and submits the subsequent application
before the expiration of its approval for the guarantee or the credit
enhancement.
(2) Application prioritization and processing. Applications
will be prioritized based on districts' property wealth per ADA, with
the application of a district with a lower property wealth per ADA
prioritized before that of a district with a higher property wealth
per ADA. Applications may also be prioritized for districts that experience
unforeseen catastrophes or emergencies that require the renovation
or replacement of school facilities as described in TEC, §44.031(h).
All applications received during a calendar month will be held until
up to the 15th business day of the subsequent month. On or before
the 15th business day of each month, the commissioner will announce
the results of the prioritization and process applications for initial
approval for the guarantee, up to the available net capacity as of
the application deadline, subject to the requirements of this section.
(A) Approval for guarantees will be awarded each month
beginning with the districts with the lowest property wealth per ADA
until the PSF reaches its net capacity to guarantee bonds.
(B) Approval for guarantees will be awarded based on
the fund's capacity to fully guarantee the bond issue for which the
guarantee is sought. Applications for bond issues that cannot be fully
guaranteed will not receive an award. The amount of bond issue for
which the guarantee was requested may not be modified after the monthly
application deadline for the purposes of securing the guarantee during
the award process. If PSF net capacity has been exhausted, the commissioner
will process the application for approval of the credit enhancement
as specified in §61.1038 of this title.
(C) The actual guarantee of the bonds is subject to
the approval process prescribed in subsection (g) of this section.
(D) An applicant school district is ineligible for
consideration for the guarantee if its lowest credit rating from any
nationally recognized investment rating firm as defined in subsection
(b)(9) of this section is the same as or higher than that of the PSF.
(3) Late application. 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.
(4) Notice of application status. Each district that
submits a valid application will be notified of the application status
within 15 business days of the application deadline.
Cont'd... |
