| (a) Definitions. As used in this section, the following
terms have the meanings ascribed to such terms below.
(1) Agency means the Texas Education Agency and any
successors or assigns thereto with respect to the management and administration
of the Program or the investment of the Permanent School Fund.
(2) Financial Obligation means, with respect to the
Program, a:
(A) debt obligation;
(B) derivative instrument entered into in connection
with, or pledged as security or a source of a payment for, an existing
or planned debt obligation; or
(C) guarantee of a debt obligation or any such derivative
instrument; provided that "financial obligation" shall not include
municipal securities as to which a final official statement (as defined
in the Rule) has been provided to the MSRB consistent with the Rule.
(3) Guaranteed Bonds means obligations for which application
is made and granted for a guarantee under the Program.
(4) Issuing District means a school district or charter
district which issues Guaranteed Bonds.
(5) MSRB means the Municipal Securities Rulemaking
Board or any successor to its functions under the Rule.
(6) Official Statement means each offering document
of an Issuing District used in the offering and/or sale of Guaranteed
Bonds.
(7) Order means the resolution, order, ordinance or
other instrument or instruments of an Issuing District pursuant to
which Guaranteed Bonds are issued and the rights of the holders and
beneficial owners thereof are established.
(8) Permanent School Fund means the perpetual school
fund established by Article VII, Section 2 of the Texas Constitution.
(9) Program means the program of bond guarantee by
the Permanent School Fund, which program has been established by Article
VII, Sections 2 and 5 of the Texas Constitution, and is administered
in accordance with Subchapter C, Chapter 45, Texas Education Code,
as amended, and the rules and regulations of the Agency. The term
Program shall also include the rules, regulations and policies of
the Agency with respect to the administration of such program of guarantee
of school district bonds, as well as the rules, regulations, policies
of the Agency with respect to the administration, and the operational
and financial results, of the Permanent School Fund.
(10) Program Regulation means this rule of the Agency
which is promulgated for the purpose of establishing and undertaking
with respect to the Program which satisfies the requirements of the
Rule.
(11) PSF Corporation means the Permanent School Fund
Corporation created by the State Board of Education pursuant to, and
having the powers set forth in, Subchapter B of Chapter 43, Texas
Education Code, as amended.
(12) Rule means SEC Rule 15c2-12, as amended from time
to time.
(13) SEC means the United States Securities and Exchange
Commission.
(b) Annual Reports.
(1) The Agency shall provide annually to the MSRB,
within six months after the end of each fiscal year, financial information
and operating data with respect to Program of the general type which
describes the Program and which is included in an Official Statement
for Guaranteed Bonds, which is prepared by the PSF Corporation. Any
financial statements to be provided need not be audited. Such information
shall be transmitted electronically to the MSRB, in such format and
accompanied by such identifying information as prescribed by the MSRB.
(2) If the Agency changes its fiscal year from the
year ending August 31, it will file notice with the MSRB of the change
(and of the date of the new fiscal year end) prior to the next date
by which the Agency otherwise would be required to provide financial
information and data pursuant to this section.
(3) The financial information and operating data to
be provided pursuant to this section may be set forth in full in one
or more documents or may be included by specific reference to any
document (including an official statement or other offering document,
if it is available from the MSRB) that theretofore has been provided
to either the MSRB or filed with the SEC.
(c) Event Notices.
(1) The Agency shall notify the MSRB, in a timely manner
(but not in excess of ten business days after the occurrence of the
event), of any of the following events with respect to the Program:
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults if such event is material
within the meaning of the federal securities laws;
(C) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting
financial difficulties;
(E) Substitution of credit or liquidity providers,
or their failure to perform;
(F) Adverse tax opinions, the issuance by the Internal
Revenue Service of proposed or final determinations of taxability,
Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices
or determinations with respect to the tax status of the Program, or
other material events affecting the tax status of the Program;
(G) Modifications to rights of holders of the Bonds,
if such event is material within the meaning of the federal securities
laws;
(H) Bond calls, if such event is material within the
meaning of the federal securities laws, and tender offers;
(I) Defeasances;
(J) Release, substitution, or sale of property securing
repayment of Guaranteed Bonds, if such event is material within the
meaning of the federal securities laws;
(K) Rating changes of the Program;
(L) Bankruptcy, insolvency, receivership, or similar
event of the Program, which shall occur as described below;
(M) The consummation of a merger, consolidation, or
acquisition involving the Program or the sale of all or substantially
all of its assets, other than in the ordinary course of business,
the entry into a definitive agreement to undertake such an action
or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if such event is material
within the meaning of the federal securities laws;
(N) Appointment of a successor or additional trustee
with respect to the Program or the change of name of a trustee, if
such event is material within the meaning of the federal securities
laws;
(O) The incurrence of a financial obligation of the
Program, if material, or agreement to covenants, events of default,
remedies, priority rights, or other similar terms of a financial obligation
of the Program, any of which affect security holders, if material;
and
(P) Default, event of acceleration, termination event,
modification of terms, or other similar events under the terms of
a financial obligation of the Program, any of which reflect financial
difficulties.
(2) For these purposes, any event described in the
immediately preceding paragraph (L) is considered to occur when any
of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the Program in a proceeding under the United
States Bankruptcy Code or in any other proceeding under state or federal
law in which a court or governmental authority has assumed jurisdiction
over substantially all of the assets or business of the Program, or
if such jurisdiction has been assumed by leaving the existing governing
body and officials or officers in possession but subject to the supervision
and orders of a court or governmental authority, or the entry of an
order confirming a plan of reorganization, arrangement, or liquidation
by a court or governmental authority having supervision or jurisdiction
over substantially all of the assets or business of the Program.
(3) The Agency shall notify the MSRB, in a timely manner,
of any failure by the Agency to provide financial information or operating
data in accordance with Section 1 of this Program Regulation by the
time required by such Section.
(4) Nothing in this Program Regulation shall obligate
the Agency to make any filings or disclosures with respect to Guaranteed
Bonds, as the obligations of the Agency hereunder pertain solely to
the Program.
(d) Limitations, Disclaimers, and Amendments.
(1) With respect to a series of Guaranteed Bonds, the
Agency shall be obligated to observe and perform the covenants specified
in this Program Regulation for so long as, but only for so long as,
the Agency remains an "obligated person" with respect to the Guaranteed
Bonds within the meaning of the Rule.
Cont'd... |
