BUSINESS AND OPERATIONS: INTERCEPT AGREEMENTS [LAW]
If
the school has amended its charter to provide for intercept agreements, the school
may enter into such an agreement with the Texas Bond Review Board (TBRB) and
the Comptroller of Public Accounts to increase its credit rating.
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1. Notification to the Bond Review
Board
Prior to
issuing any obligation, the board may notify the TBRB of the proposed issuance
of an obligation and enter into an agreement with the TBRB to authorize and
direct the comptroller, to withhold from the school, sufficient money from any
payment to which the school may be entitled, and apply so much as shall be
necessary to pay the principal of and interest on such obligation then due, and
to continue withholding additional payments until an amount sufficient to
satisfy the amount then due has been met.
2. Agreement Requirements
The agreement with the TBRB and the comptroller shall
set forth:
A. The proposed
date of issuance of the obligation and the name and series of the proposed
obligation;
B. Each
payment date with respect to the obligation and the principal of and interest
on the obligation coming due on each such date; and
C. The
name and address of the financial institution serving as paying agent for the
obligation to whom any payment by the comptroller should be made.
The agreement terminates at the time the final payment
of principal and interest on the obligation is made or the obligation is
refunded.
3. Failure to Make Payments
A. If the school
enters into an intercept agreement with the TBRB, the TBRB may, on notification
from the school, the custodian bank, or the paying agent for the school, that
the school is unable or has failed to pay amounts required by the agreement or
to pay principal of or interest on the obligation when due, shall notify the comptroller,
who shall withhold sufficient money from any payment to which such local
government may be entitled and apply so much thereof as shall be necessary to
pay the amounts then due.
B. The
school may, in the agreement, agree to make monthly deposits of one-sixth of
the semiannual debt service requirement, or such other amount, at such other
times as specified in the agreement, into an interest and sinking fund in a
custodian bank. If a bank agrees to
serve as custodian for the interest and sinking fund, it shall be the duty of
the bank to notify the TBRB if the agreed upon amount of funds is not deposited
each month or other specified time on a timely basis.
C. On receipt of
notification and direction from the TBRB, the comptroller may withhold from any
payment an amount equal to any amount approved by the school in the agreement. The comptroller shall continue to withhold
payments until the required amounts have been deposited in the interest and
sinking fund with the custodian bank or with the paying agent. If the required amounts have not been
deposited at the time interest on or principal of the obligation of the school
is required to be deposited pursuant to the agreement, the comptroller shall
transmit, from payments withheld, the appropriate amount to the custodian bank
or to the paying agent, as directed by the TBRB.
D. Any
notice described above in subparagraphs (A)-(C) above shall be provided to the school.
4. Right to Pledge Payments
A. The school
may pledge payments to secure any obligation only if the amount of payments
received by the school in the state fiscal year preceding the proposed issuance
equals or exceeds the amount required in each year to pay the sum of an amount
equal to two (2) times:
(1) the maximum
annual principal and interest requirements for the obligation; and
(2) the
maximum annual principal and interest requirements on any additional obligation
for which payments have been pledged.
The school shall provide
evidence that these requirements are met.
B. A pledge of
payments under this policy is a first priority for the application of payments.
The comptroller shall apply such
payments as provided by this policy prior to applying such payments pursuant to
any other authorization to withhold or intercept such payments.