(a) Eligibility. Certain restrictions apply to debt
and to school districts eligible for the existing debt allotment (EDA).
(1) Debt eligible for the EDA is an existing obligation
of a school district made through the issuance of a bond for instructional
or non-instructional purposes pursuant to Texas Education Code (TEC),
Chapter 45, Subchapter A, or through the refunding of bonds as defined
in TEC, §46.007. [The district must have made a payment
on the bonds on or before August 31, 2007.] Lease-purchase agreements
authorized by Local Government Code, §271.004, are not eligible.
Payments demonstrating eligibility for the EDA must appear on the
debt service schedule contained in the final official statement (FOS)
or bond order. The debt service schedule contained in the FOS (or
in the bond order, if the bonds are privately placed) and filed with
the state information depository will be used to determine eligible
bond payments. [To the extent that neither the FOS nor the bond
order is filed with the state information depository, such documents
shall be filed with the Texas Education Agency (TEA).] Bond
issues and their related debt service payments that are not reported
to the state information depository [or the TEA, as applicable,]
are not eligible to receive EDA state assistance.
[(2) Eligible debt does not include
any portion of an existing obligation that has been approved for financial
assistance with the Instructional Facilities Allotment (IFA) as defined
in §61.1032 of this title (relating to Instructional Facilities
Allotment), in accordance with TEC, Chapter 46.]
(2) [(3)] Eligible bond payments
include regularly scheduled principal and interest payments that are
made between September 1 and August 31 each year.
[(4) Certain other refinanced debt
may be eligible for funding under this subsection.]
(3) [(A)] A lease purchase refinanced
with a general obligation bond shall be eligible for consideration
for the EDA in future years [based on the date of payment on
the new bond and the limits on tax rates that apply].
[(B) Any portion of a bond issue
that refinances a portion of an original lease-purchase agreement
that was eligible for IFA consideration but exceeded the IFA limit
shall be eligible for consideration in future years pursuant to this
subsection based on the date of first payment on the new bond and
the limits on tax rates that apply.]
[(C) If a lease purchase that is
not funded in the IFA program is refinanced with a general obligation
bonded debt, the bonded debt shall gain eligibility for the EDA by
the terms of the EDA program. Any interest and sinking (I&S) fund
tax effort associated with the bonded debt payments may be counted
for purposes of computing the EDA. Qualification pursuant to this
subsection shall be according to the terms of the program, including
the date of first payment on the bond and the relevant tax rate limitation.]
[(D) Debt that is refinanced in a
manner that disqualifies it for eligibility for funding within the
IFA program shall be treated as new bonded debt at the time of issuance
for the purpose of funding consideration pursuant to the EDA.]
(b) Qualifying debt service. The
following provisions apply to the applicability of debt service payments
for use in calculating EDA state aid.
(1) Computation of qualifying debt service for fixed-rate
bonds shall be based on debt service schedules obtained from the state
information depository. Prepayment of a bond, either through an early
call provision or some other mechanism, shall not increase the state's
obligation or the computed state aid pursuant to the EDA. To the extent
that prepayments reduce future debt service requirements, the computation
of state aid shall also be appropriately adjusted.
(2) Computation of qualifying debt service for a variable
rate bond shall be based on the minimum payment requirement necessary
to meet the computed interest costs for the year.
(3) If a district issues debt that requires the deposit
of payments into a mandatory I&S fund or debt service reserve
fund, the deposits will be considered qualifying debt payments for
the purpose of the EDA if the district's bond covenant calls for the
deposit of payments into a mandatory and irrevocable fund for the
sole purpose of defeasing the bonds or if the FOS stipulates the requirements
of the I&S fund.
(c) [(b)] Local share requirement.
The following [Qualifying debt service. Certain]
district revenues [may] qualify to meet the local share
requirement of the EDA when computing state assistance amounts.
(1) District revenues that qualify
to meet a district's local share requirement for the EDA are specified
in the TEC, §46.032(b) and (c). The commissioner of education
will provide each district with information about which tax collections
were not equalized by state assistance in the preceding school years
and worksheets to enable districts to calculate tax collections that
will not receive state assistance in a current school year. The commissioner
will determine the amount of excess collections, if any, to be applied
to the EDA local share requirement.
(2) I&S fund taxes collected
during a school year will be attributed first to satisfy the local
share requirement of debts eligible for EDA state aid for that school
year and then to satisfy the local share requirements of any Instructional
Facilities Allotment (IFA) debts for that school year.
[(1) I&S fund taxes collected
in the current school year may qualify toward meeting the local share
requirement of the EDA. In addition, other district funds budgeted
for the payment of bonds may qualify to meet the EDA local share requirements.]
[(A) Funds budgeted by a district for payment of eligible
bonds may include I&S fund taxes collected in the 1999-2000 school
year or later school year in excess of the amount necessary to pay
the district's local share of debt service on bonds in that year,
provided that the taxes were not used to generate other state aid.]
[(B) Funds budgeted by a district for payment of eligible
bonds may include maintenance and operations (M&O) taxes collected
in the current or previous school year that are in excess of amounts
used to generate other state aid.]
[(C) The commissioner of education will provide each
district with information about what tax collections were not equalized
by state assistance in the preceding school year and worksheets to
enable districts to calculate tax collections that will not receive
state assistance in a current school year.]
[(D) The commissioner of education will determine
the amount of excess collections, if any, to be applied to the EDA
local share requirement.]
[(2) If a district issues debt that
requires the deposit of payments into a mandatory I&S fund or
debt service reserve fund, the deposits will be considered debt payments
for the purpose of the EDA if the district's bond covenant calls for
the deposit of payments into a mandatory and irrevocable fund for
the sole purpose of defeasing the bonds or if the FOS stipulates the
requirements of the I&S fund and the bond covenant.]
[(3) An EDA correction form packet
is required for any EDA-supported bonds that have undergone changes,
including, but not limited to, refinancing, restatement, or any other
transaction that materially affects the terms of the bonds, including
transactions that materially affect the terms of the underlying bonds.
An EDA correction form packet must be submitted to the TEA no later
than 180 days following the date on which the transaction was approved
by the attorney general, if the transaction required approval by the
attorney general. If approval by the attorney general was not required,
the EDA correction form packet is due within 180 days of the date
that the school board approved the transaction.]
[(4) Failure to submit the EDA correction
form packet to the TEA division responsible for state funding within
the 180-day period defined in paragraph (3) of this subsection will
result in the suspension of EDA state aid payments for the applicable
EDA allotment award. This suspension has the following effects.]
[(A) Debt service payments associated with the applicable
EDA allotment will be disqualified for EDA state aid upon expiration
of the 180-day period defined in paragraph (3) of this subsection.
Debt service payments made after the 180-day period expires will not
earn EDA state aid.]
[(B) Eligibility for EDA state aid associated with
the applicable allotment will resume on the date the EDA correction
form packet, including any required supporting documentation, is received.
The EDA state aid will be based on eligible debt service payments
scheduled on or after the date the EDA correction form packet is received.]
[(C) Current and future EDA state aid payments may
be adjusted to reflect the disqualified debt service payments. If
no EDA state aid is due in a fiscal year that is affected by such
an adjustment, a district will be notified about the disqualified
amount and will be required to remit that amount to the TEA no later
than 30 days after notification.]
[(D) Unless otherwise requested, payments of EDA state
aid based on the updated eligible debt service reported in the completed
EDA correction form packet shall be made with the payments due for
the following fiscal year in accordance with TEC, §46.035.]
[(5) If a district enters into an
interest rate management agreement related to debt that is supported
by EDA funds, the district shall provide a schedule or schedules demonstrating
the anticipated effect of the interest rate management agreement on
the debt service for the related bonds. If a district enters into
an interest rate management agreement, the amount of debt service
eligible for EDA funding shall be determined as follows.]
[(A) If an interest rate management agreement is executed
concurrently with a public offering or private placement of bonds
related thereto, the debt service eligible for EDA funding will be
equal to the amount of debt service reflected in the debt service
schedule contained in the FOS, in the private placement memorandum,
or (if no FOS or private placement memorandum is prepared) in supplemental
schedule(s) filed with the TEA.]
[(B) If an interest rate management agreement is not
executed concurrently with a public offering or private placement
of bonds related thereto, the debt service eligible for EDA funding
will be equal to the amount of debt service reflected in schedules
to be provided by the district to the TEA as required by paragraph
(3) of this subsection.]
[(C) Failure to identify the interest rate management
agreement transaction to the commissioner within 180 days of its execution,
by submitting an EDA correction form packet, may disqualify the debt
service on the related bonds from the EDA state assistance as described
in paragraph (4) of this subsection. Such debt service will remain
ineligible unless the information described in this paragraph is provided
to the TEA division responsible for state funding. The commissioner
may require that EDA funding paid to a district for such ineligible
debt service be refunded by the district.]
[(D) For purposes of this section, "interest
rate management agreement" means an agreement that provides for
an interest rate transaction, including a swap, basis, forward, option,
cap, collar, floor, lock, debt derivative transaction, or hedge transaction;
for a transaction similar to those types of transactions; or for a
combination of any of those types of transactions, as described in
the Texas Government Code, §1231.001.]
[(6) I&S fund taxes collected
during a school year will be attributed first to satisfy the local
share requirement of debts eligible for EDA state aid for that school
year, second to satisfy the local share requirements of any IFA debts
for that school year, and third to excess taxes that may raise the
limit for the EDA program in a subsequent biennium if collected in
the second year of a state fiscal biennium.]
[(7) Computation of state aid in
the EDA program for a variable rate bond shall be based on the minimum
payment requirement. A district may receive such state aid for payment
on a variable rate bond in excess of the minimum payment requirement
as long as the additional amount meets certain conditions.]
[(A) The payment is necessary to meet the computed
interest costs for the year.]
[(B) The amount shall not exceed the applicable limit
for debt established pursuant to TEC, §46.034(b).]
[(C) The district shall notify the commissioner of
education of its intent prior to the adoption of the district's tax
rate for debt service for the applicable year.]
[(8) A district may exercise its
ability to make payments in excess of the minimum payment required
but the excess amount shall not be used in determining the limit on
the existing debt tax rate (EDTR) or in the calculation of state assistance
in that year.]
[(9) Computation for fixed-rate bonds
shall be based on published debt service schedules as contained in
the FOS or in schedules filed with the TEA for a private placement
or other transaction in which no FOS is prepared. Prepayment of a
bond, either through an early call provision or some other mechanism,
shall not increase the state's obligation or the computed state aid
pursuant to the EDA. To the extent that prepayments reduce future
debt service requirements, the computation of state aid shall also
be appropriately adjusted.]
(d) Limits on assistance. The following
exclusions apply to the amount of state assistance to which a district
is entitled under the TEC, Chapter 46, Subchapter B.
(1) For purposes of computing EDTR, as specified in
the TEC, §46.034, and in accordance with the provisions of the
TEC, §46.033, relating to eligible bonds for the EDA, tax collections
or payment amounts associated with bonded debt in the IFA program
shall be excluded from the calculation.
(2) Excess funds budgeted in prior tax years that
conform to the TEC, §46.032(c)(2) and (3), will not be applied
for purposes of computing a district's tax rate for the payment of
eligible bonds for the final year of the preceding state fiscal biennium
as specified in the TEC, §46.034(b).
[(c) Limits on assistance. The amount
of state assistance is limited by the lesser of a calculated EDTR
for eligible debt or an appropriated debt tax limit.]
[(1) The calculated EDTR is a rate determined with
the debt limit resulting from the lesser of calculations specified
in subparagraphs (A) or (B) of this paragraph, except as specified
in paragraph (2) of this subsection.]
[(A) EDTR may be calculated as the I&S fund taxes
collected for eligible bonds for the last fiscal year of the preceding
state fiscal biennium divided by the property value used for state
funding purposes in that year, then multiplied by 100.]
[(B) EDTR may be calculated as the current year debt
service payment on eligible bonds divided by the product of the current
year average daily attendance (ADA) multiplied by $35, and then divided
by $100.]
[(2) If the district demonstrates, in a manner prescribed
by the commissioner, that the district must construct, acquire, renovate,
or improve one or more instructional facilities to serve the children
of military personnel transferred to a military installation in or
near the district under the Defense Base Closure and Realignment Act
of 1990 (10 USC §2687), the EDTR may be calculated using the
method specified in paragraph (1)(B) of this subsection.]
[(3) The EDTR used in the funding formula cannot exceed
the appropriated limit ($.29).]
[(4) For purposes of computing EDTR, tax collections
or payment amounts associated with bonded debt in the IFA program
shall be excluded from the calculation.]
(e) [(d)] Data and payment cycles.
The necessary data elements to calculate state assistance for existing
debt and the associated payment cycle are determined by the commissioner
[of education].
(1) Cont'd...
|
