Texas Administrative Code › Title 19 - EDUCATION › Part 2 - TEXAS EDUCATION AGENCY › Chapter 61 - SCHOOL DISTRICTS › Subchapter CC - COMMISSIONER'S RULES CONCERNING SCHOOL FACILITIES › Section 61.1039 - Open-Enrollment Charter School Bond Enhancement Program

Current through Reg. 49, No. 28; July 12, 2024
(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.