| (a) Statutory provision. The commissioner of education
must administer the open-enrollment charter school facilities credit
enhancement program according to the provisions of the Texas Education
Code (TEC), Chapter 45, Subchapter J.
(b) Definitions. The following definitions apply to
the open-enrollment charter school facilities credit enhancement program.
(1) Amortization expense--The annual expense of any
debt and/or loan obligations.
(2) Annual debt service--Payments of principal and
interest on outstanding bonded debt scheduled to occur between September
1 and August 31 during a fiscal year as reported by the Municipal
Advisory Council (MAC) of Texas or its successor, if the open-enrollment
charter holder is responsible for outstanding bonded indebtedness.
(A) The annual debt service will be determined by the
current report of the bonded indebtedness of the open-enrollment charter
holder as reported by the MAC of Texas or its successor as of the
date of the application deadline.
(B) The debt service amounts used in this calculation
for variable rate bonds will be those that are published in the final
official statement or final maturity schedule.
(C) Annual debt service includes required payments
into a sinking fund as authorized under the laws of Texas and the
United States of America, provided that the sinking fund is maintained
by a trustee or other entity approved by the commissioner that is
not under the control or common control of the charter holder.
(3) Application deadline--The last business day of
the month in which an application for a credit enhancement is filed.
Applications must be received by the Texas Education Agency (TEA)
division responsible for state funding by 5:00 p.m. on the last business
day of the month to be considered in that month's application processing.
(4) Average daily attendance (ADA)--Total refined average
daily attendance as defined by the TEC, §48.005.
(5) Board resolution--The resolution adopted by the
governing body of an open-enrollment charter holder that:
(A) requests credit enhancement of bonds through the
Open-Enrollment Charter School Bond Enhancement Program; and
(B) authorizes the charter holder's administration
to pursue bond financing.
(6) Bond resolution--The resolution authorizing the
issuance of bonds adopted by the governing body of an issuer of bonds
for the benefit of an open-enrollment charter holder.
(7) Combination issue--An issuance of bonds for which
an application is filed for a credit enhancement that includes both
a new money portion and a refunding portion, as permitted by the TEC,
Chapter 53, or the Texas Government Code, Chapter 1207. The eligibility
of combination issues for the credit enhancement is limited by the
eligibility of the new money and refunding portions as defined in
this subsection.
(8) Debt service coverage ratio--A measure of an open-enrollment
charter holder's ability to pay interest and principal with cash generated
from current operations. The debt service coverage ratio (total debt
service coverage on all long-term capital debt) equals the excess
of revenues over expenses plus interest expense plus depreciation
expense plus amortization expense, all divided by maximum annual debt
service. The calculation can be expressed as: (Excess of revenues
over expenses + interest expense + depreciation expense + amortization
expense) / Maximum annual debt service.
(9) Depreciation expense--The audited amount of depreciation
that was expensed during the fiscal period.
(10) Foundation School Program (FSP)--The program established
under the TEC, Chapters 46, 48, and 49, or any successor program of
state appropriated funding for school districts in the state of Texas.
(11) Maximum annual debt service--As of any date of
calculation, the highest annual debt service requirements with respect
to all outstanding debt for any succeeding fiscal year.
(12) New money issue--An issuance of revenue bonds
for the purposes of the purchase, repair, or renovation of real property,
including improvements to real property, for an educational facility,
as that term is defined in the TEC, §53.02, of an open-enrollment
charter school and for purposes of equipping real property of an open-enrollment
charter school. Eligibility for the credit enhancement for new money
issues is limited to the issuance of bonds authorized under the TEC,
Chapter 53. A new money issue does not include the issuance of bonds
to purchase a facility from a public facility corporation created
by the open-enrollment charter holder or to purchase any property
that is currently under a lease-purchase contract under the Local
Government Code, Chapter 271, Subchapter A.
(13) Open-enrollment charter--This term has the meaning
assigned in §100.1001 of this title (relating to Definitions).
(14) Open-enrollment charter holder--This term has
the meaning assigned to the term "charter holder" in the TEC, §12.1012.
(15) Open-enrollment charter school--This term has
the meaning assigned to the term "charter school" in §100.1001
of this title.
(16) Open-Enrollment Charter School Bond Enhancement
Program (CSBEP)--The program to provide credit enhancement for open-enrollment
charter school bonds that is described by this section and established
under the TEC, Chapter 45, Subchapter J.
(17) Open-enrollment charter school campus--This term
has the meaning assigned to the term "charter school campus" in §100.1001
of this title.
(18) Proposed annual debt service--Payments of principal
and interest on the outstanding bonded debt for which the enhancement
is sought scheduled to occur between September 1 and August 31 during
the fiscal year in which the credit enhancement is sought and each
fiscal year for which the credit enhancement is or would be in effect
as described in the amortization schedule for the bonded debt for
which the enhancement is sought. Proposed annual debt service includes
required payments into a sinking fund as authorized under the laws
of Texas and the United States of America, provided that the sinking
fund is maintained by a trustee or other entity approved by the commissioner
that is not under the control or common control of the charter holder.
(19) Refunding issue--An issuance of bonds for the
purpose of refunding bonds that have previously been issued under
the TEC, Chapter 53, or the Texas Government Code, Chapter 1207, and
have previously been approved by the Office of the Attorney General.
(20) School year--The period beginning the fourth Monday
of August of the current calendar year and ending the Sunday before
the fourth Monday of August of the following calendar year.
(c) Eligibility to apply for the credit enhancement.
(1) To have its application for the credit enhancement
considered, an open-enrollment charter holder must:
(A) have operated at least one open-enrollment charter
school in the state of Texas for at least three years;
(B) identify in its application for which open-enrollment
charter school and, if applicable, for which open-enrollment charter
school campus the bond funds will be used;
(C) in its application, agree that the bonded indebtedness
for which the credit enhancement is sought will be undertaken as an
obligation of all tax-exempt entities under common control of the
open-enrollment charter holder and agree that all such entities will
be liable for the obligation if the open-enrollment charter holder
defaults on the bonded indebtedness, provided that an entity that
does not operate a charter school in Texas is subject to this subparagraph
only to the extent that it has received state funds from the open-enrollment
charter holder;
(D) not be considered a high-risk grantee by the TEA
office responsible for planning, grants, and evaluation; and
(E) not have an unresolved corrective action that is
more than one year old, unless the open-enrollment charter holder
has taken appropriate steps to begin resolving the action.
(2) For an open-enrollment charter holder to have its
application for the credit enhancement considered, each open-enrollment
charter school operated under the charter must not have an accreditation
rating of Not Accredited-Revoked and must have a rating of acceptable
or higher as its most recent state academic accountability rating.
However, if an open-enrollment charter school operated under the charter
is not yet rated because the school is in its first year of operation,
that fact will not impact the charter holder's eligibility to apply
for the credit enhancement.
(d) Criteria to be met for open-enrollment charter
holder to receive initial approval.
Cont'd... |
