Chapter 33. Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund

Subchapter AA. Commissioner's Rules


33.1001. Payments for Remittance to Charter District Bond Guarantee Reserve Fund.

(a)  In this section, "charter district," "combination issue," and "refunding issue," have the meanings assigned to those terms by 33.67 of this title (relating to Bond Guarantee Program for Charter Schools).

(b)  A charter district that has bonds guaranteed under 33.67 of this title must annually remit to the commissioner of education a payment for deposit in the Charter District Bond Guarantee Reserve Fund established under the Texas Education Code (TEC), 45.0571, as described in subsections (e) and (f) of this section.

(c)  To calculate the total payments required under subsections (e) and (f) of this section for charter district bonds guaranteed under 33.67 of this title with a closing date before March 1, 2017, the first annual amount due under this section is the amount equal to 0.1% of the principal amount that is outstanding on the date the bonds were issued, which is the closing date for the bonds. The amount due annually for each subsequent payment due under this section is the amount equal to 0.1% of the principal amount that is outstanding on the anniversary of the closing date.

(d)  To calculate the total payments required under subsections (e) and (f) of this section for charter district bonds guaranteed under 33.67 of this title with a closing date on or after March 1, 2017, the commissioner will calculate an amount equal to 10% of the savings to the charter district resulting from the lower interest rate on the bond due to the guarantee by the permanent school fund.

(1)  The annual amount due to the Charter District Bond Guarantee Reserve Fund will be computed as R = P x S x 0.1, where:

(A)  "R" is the amount to be contributed to Charter District Bond Guarantee Reserve Fund;

(B)  "P" is the outstanding principal amount on the closing date of the bond for payments made under subsection (e) of this section or the outstanding principal amount on the anniversary of the closing date of the bond for payments made under subsection (f) of this section; and

(C)  "S" is the savings to the charter district as a result of the bond guarantee under 33.67 of this title, which is computed as the difference between the preceding 36-month moving average of the Thomson Reuters Municipal Market Data index yield for the Baa twenty-year maturity and the preceding 36-month moving average of the Thomson Reuters Municipal Market Data index yield for the AAA twenty-year maturity.

(i)  The savings "S" shall remain constant for the life of the newly guaranteed bond.

(ii)  If Thomson Reuters Municipal Market Data index is decomposed to reflect each ratings step within the Baa universe, the savings calculation shall be based on the charter district's actual rating to the comparable rating in the decomposed index.

(2)  The commissioner will semi-annually compute "S," which is the value to be used to compute "R" for charter district bonds, and post it on the agency's website during the first week of September and March of the applicable state fiscal year.

(e)  The first payment due under this section is due within 30 days of the closing date. The commissioner will direct the comptroller to withhold the amount of this first payment from the state funds otherwise payable to the charter district, on a date that falls within 30 days of the closing date. If, on that date, the state funds remaining to be paid to the charter district for the year are less than the amount due to the reserve fund for that year, the commissioner will recover the difference as authorized under the TEC, 42.258.

(f)  Each subsequent annual payment is due on the anniversary of the closing date. The commissioner will direct the comptroller to annually, during the month of the anniversary date, withhold the amount due to the reserve fund for that year from the state funds otherwise payable to the charter district. If, on the anniversary date, the state funds remaining to be paid to the charter district for the year are less than the amount due to the reserve fund for that year, the commissioner will recover the difference as authorized under the TEC, 42.258.

(g)  The commissioner will provide a charter district with a statement of the total and annual amounts due under this section within 60 days of the date that the bonds approved for the guarantee under 33.67 of this title are sold. The commissioner will calculate savings for refunding issues, and the refunding portion of combination issues, using the principal amount that is being refunded.

(h)  No payment is due on an anniversary date on which no principal amount is outstanding. The total amount due under this section is the sum of all annual payments due.

Statutory Authority: The provisions of this 33.1001 issued under the Texas Education Code, 45.0571.

Source: The provisions of this 33.1001 adopted to be effective April 22, 2014, 39 TexReg 3227; amended to be effective February 23, 2017, 42 TexReg 687.


For more information, email rules@tea.texas.gov.