| (A) If the available capacity is insufficient to guarantee
the total value of the bonds for all applicant charter districts,
the commissioner will allocate the available capacity on a pro rata
basis to each applicant charter district. For each applicant, the
commissioner will determine the percentage of the total amount of
all applicants' proposed bonds that the applicant's proposed bonds
represent. The commissioner will then allocate to that applicant the
same percentage of the available capacity, but in no event will an
allocation be equal to an amount less than $500,000.
(B) The actual guarantee of the bonds is subject to
the approval process prescribed in subsection (f) of this section.
(C) An applicant charter 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)(16) of this section is the same as or higher than that of the
PSF.
(4) Late application. An application received after
the application deadline will be considered a valid application for
the subsequent month, unless withdrawn by the submitting open-enrollment
charter holder before the end of the subsequent month.
(5) Notice of application status. Each open-enrollment
charter holder that submits a valid application will be notified of
the application status within 15 business days of the application
deadline.
(6) Reapplication. If an open-enrollment charter holder
does not receive designation as a charter district, does not receive
approval for the guarantee, or for any reason does not receive approval
of the bonds from the attorney general within the time period specified
in subsection (f)(5) of this section, the charter holder may reapply
in a subsequent month. An application that was denied approval for
the guarantee or that was submitted by a charter holder that the commissioner
determined did not meet the criteria for charter district designation
will not be retained for consideration in subsequent months. A reapplication
fee will be required unless the conditions described in subsection
(e)(1)(D) of this section apply to the charter holder.
(f) Approval for the guarantee; charter district responsibilities
on receipt of approval.
(1) Approval for the guarantee and charter renewal
or amendment.
(A) If an open-enrollment charter holder applies for
the guarantee within the 12 months before the charter holder's charter
is due to expire, application approval will be contingent on successful
renewal of the charter, and the bonds for which the open-enrollment
charter holder is applying for the guarantee may not be issued before
the successful renewal of the charter.
(B) If an open-enrollment charter holder proposes to
use the proceeds of the bonds for which it is applying for the guarantee
for an expansion that requires a charter amendment, application approval
will be contingent on approval of the amendment, and the bonds may
not be issued before approval of the amendment.
(2) Initial and final approval provisions.
(A) The commissioner may require an applicant charter
district to obtain final approval for the guarantee as described in
paragraph (4) of this subsection if:
(i) during the monthly estimation of PSF capacity described
in §33.6 of this title, the commissioner determines that the
available capacity of the PSF as described in §33.6 of this title
is 10% or less; or
(ii) during the monthly estimation of the available
capacity of the PSF to guarantee bonds for charter districts described
in subsection (d) of this section, the commissioner determines that
the available capacity of the PSF to guarantee bonds for charter districts
is 10% or less.
(B) If the commissioner has not made such a determination:
(i) the commissioner will consider the initial approval
described in paragraph (3) of this subsection as both the initial
and final approval; and
(ii) an applicant charter district that has received
notification of initial approval for the guarantee, as described in
paragraph (3) of this subsection, may consider that notification as
notification of initial and final approval for the guarantee and may
complete the sale of the applicable bonds.
(3) Initial approval.
(A) The following provisions apply to all applications
for the guarantee, regardless of whether an application is for a new
money, refunding, or combination issue. Under TEC, §45.056, the
commissioner will investigate the financial status of the applicant
charter district and the accreditation status of all open-enrollment
charter schools operated under the charter. For the charter district's
application to be eligible for initial approval by the commissioner,
each open-enrollment charter school operated under the charter must
be accredited, and the charter district must be financially sound.
The commissioner's review will include review of the following:
(i) the purpose of the bond issue;
(ii) the accreditation status, as defined by §97.1055
of this title (relating to Accreditation Status), of all open-enrollment
charter schools operated under the charter in accordance with the
following, except that, if an open-enrollment charter school operated
under the charter has not yet received an accreditation rating because
it is in its first year of operation, that fact will not impact the
charter district's eligibility for consideration for the guarantee:
(I) if the accreditation status of all open-enrollment
charter schools operated under the charter is Accredited, the charter
district will be eligible for consideration for the guarantee;
(II) if the accreditation status of any open-enrollment
charter school operated under the charter 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 open-enrollment charter school's financial
soundness. If the accreditation rating is related to the open-enrollment
charter school's financial soundness, the charter district will not
be eligible for consideration for the guarantee; or
(III) if the accreditation status of any open-enrollment
charter school operated under the charter is Not Accredited-Revoked,
the charter district will not be eligible for consideration for the
guarantee;
(iii) the charter district's financial status and stability,
regardless of each open-enrollment charter school's accreditation
rating, including approval of the bonds by the attorney general under
the provisions of TEC, §53.40;
(iv) whether TEA has required the charter district
to submit a financial plan under §109.1101 of this title (relating
to Financial Solvency Review) in the last three years;
(v) the audit history of the charter district and of
all open-enrollment charter schools operated under the charter;
(vi) the charter district's compliance with statutes
and rules of TEA and with applicable state and federal program requirements
and the compliance of all open-enrollment charter schools operated
under the charter with these statutes, rules, and requirements;
(vii) any interventions and sanctions to which the
charter district has been subject; to which any of the open-enrollment
charter schools operated under the charter has been subject; and,
if applicable, to which any of the open-enrollment charter school
campuses operated under the charter has been subject;
(viii) formal complaints received by TEA that have
been made against the charter district, against any of the open-enrollment
charter schools operated under the charter, or against any of the
open-enrollment charter school campuses operated under the charter;
(ix) the state academic accountability rating of all
open-enrollment charter schools operated under the charter and the
campus ratings of all open-enrollment charter school campuses operated
under the charter;
(x) any unresolved corrective actions that are less
than one year old; and
(xi) whether the charter district is considered a high-risk
grantee by the TEA office responsible for planning, grants, and evaluation.
(B) The commissioner will limit approval for the guarantee
to a charter district with a historical debt service coverage ratio,
based on annual debt service, of at least 1.1 for the most recently
completed fiscal year and a projected debt service coverage ratio,
based on projected revenues and expenses and maximum annual debt service,
of at least 1.2. If the bond issuance for which an application has
been submitted is the charter district's first bond issuance, the
commissioner will evaluate only projected debt service coverage. Projections
of revenues and expenses are subject to approval by the commissioner.
Cont'd... |
