On behalf of our members, TCSA recently submitted public comments to Education Commissioner Mike Morath on the Proposed Amendment to 19 TAC 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
Our comments focus on two requested changes needed to clarify and align the proposed rules to Texas Education Code (TEC), §45.0571, as amended by SB 1480 of the 85th Texas Legislature, Regular Session, 2017, regarding the required 20% savings set aside for the Charter District Bond Guarantee Reserve Fund.
Proposed 19 TAC §33.1001(c)
Senate Bill 1480 of the 85th Texas Legislature amended TEC §45.0571 to require a charter district that has bonds guaranteed under the Permanent School Fund Bond Guarantee Program to remit to the commissioner, for deposit in the charter district bond guarantee reserve fund, an amount equal to 20 percent of the savings to the charter district that is a result of the lower interest rate on the bond due to the guarantee by the permanent school fund. Senate Bill 1480 also provides, however, that the 20 percent remittance is not required if, at the time the charter district receives the proceeds of the bond guaranteed under the PSF Bond Guarantee Program, the balance of the charter district bond guarantee reserve fund is “at least equal to three percent of the total amount of outstanding guaranteed bonds issued by charter districts.” The proposed rules concerning the required 20 percent remittance do not address when the 20 percent is not required from a charter district. As such, TCSA requests that the agency add a subsection (5) to proposed 19 TAC §33.1001(c) to read as follows: “The payment due under this section is not required if, at the time the charter district receives the proceeds of the bond guaranteed under 33.67 of this title, the balance of the charter district bond guarantee reserve fund is at least equal to three percent of the total amount of outstanding guaranteed bonds issued by charter districts, including the amount of the current request.”
Proposed 19 TAC §33.1001(c)(4)
TCSA also requests the agency add language to subsection (4) of 19 TAC §33.1001(c) that provides that the charter district will first confirm the amount of the 20 percent remittance due under subsection (c) prior to pricing the bonds, so as to ensure charter districts determine the amount of remittance as part of the pricing of the bond. As such, TCSA requests the agency revise subsection (4) to read as follows: “The charter district will confirm the amount due under this section prior to pricing the bonds and the commissioner will provide a charter district with a statement of the amount due under this section after the bonds approved for the guarantee under §33.67 of this title are sold but before they close. The commissioner will calculate savings for refunding issues, and the refunding portion of combination issues, using the principal amount that is being refunded.”
The adopted rules were filed with the Texas Register on Monday, October 9, 2017, for publication in the October 27, 2017 issue, with an effective date of October 29, 2017.