1. (a) An officer or entity may not issue state securities unless the issuance has been approved or exempted from review by the Board. An officer or entity that has not been granted an exemption from review by the board and that proposes to issue state bonds shall apply for board approval by filing one application with original signatures and nine copies with the Executive Director of the bond finance office. The Executive Director of the bond finance office shall forward one copy of the application to each member of the board and one copy to the Office of the Attorney General.
2. (b) Applications must be filed with the bond finance office no later than the first Tuesday of the month in which the applicant requests board consideration. Applications filed after that date will be considered at the regular meeting only with the approval of the Chair or two or more members of the board.

3. (c) An application for approval of a lease-purchase agreement must include:

   1. (1) a description of, and statement of need for, the facilities or equipment being considered for lease purchase;
   2. (2) the statutory authorization for the lease-purchase proposal;
   3. (3) evidence of all necessary approvals from any state boards, state agencies, etc.; and
   4. (4) a detailed explanation of the terms of the lease-purchase agreement, including, but not limited to, amount of purchase, trade-in allowances, interest charges, service contracts, etc.

4. (d) An application for all state securities other than lease-purchase agreements must include:

   1. (1) evidence that all necessary approvals of the issuance of the state securities or the project to be financed with the proceeds of the state securities have been obtained from the appropriate state boards or state agencies except

      1. (A) the approval of the state securities by the Attorney General;
      2. (B) the approval of or review of the projects by the Texas Higher Education Coordinating Board to be financed with the proceeds of the state securities issued by the board of regents of an institution of higher education pursuant to a system wide revenue financing system; and
      3. (C) environmental approvals and permits;
   2. (2) a substantially complete draft or summary of the proposed resolution, order, or ordinance providing for the issuance of state bonds;
   3. (3) where applicable, evidence of review of proposed issuance by local entities;
   4. (4) a brief description of the program under which the state securities are proposed to be issued, which may include a reference to a legislative enactment or to existing rules if the program is established in accordance with an existing statute or existing rules;
   5. (5) the applicant's plans for use of state security proceeds, including a description of, statement of the need for, and cost of each specific project for which security proceeds are proposed to be used;
   6. (6) the applicant's plans for the administration and servicing of the state securities to be issued, including, when applicable, a disbursement schedule of state security proceeds, the proposed flow of funds, the sources and methods of repayment, and an estimated debt-service schedule;
   7. (7) a description of the applicant's investment provisions for state security proceeds, including any specific provisions for safety and security and a description of the duties and obligations of the trustee and paying agent/registrar as applicable;
   8. (8) a timetable for financing that contains dates of all major steps in the issuance process, including all necessary approvals;
   9. (9) if the applicant has authority to issue both general obligation and revenue bonds and the proposed issuance is of one of these, a statement of the applicant's reasons for its choice of type of state securities;

   10. (10) a statement of the applicant's estimated costs of issuance, listed on an item by item basis, including, as applicable, the estimated costs for:

       1. (A) bond counsel
       2. (B) financial advisor
       3. (C) paying agent/registrar
       4. (D) rating agencies
       5. (E) official statement printing
       6. (F) bond printing
       7. (G) trustee
       8. (H) credit enhancement
       9. (I) liquidity facility
       10. (J) miscellaneous issuance costs;

   11. (11) an estimate, if state security sale is negotiated, of underwriter's spread, specified in the following components and accompanied by a list of underwriters' spreads from recent comparable bond issues:

       1. (A) management fee
       2. (B) underwriter's fees
       3. (C) selling concessions
       4. (D) underwriter's counsel
       5. (E) other costs;
   12. (12) a list of the firms providing the services reported in paragraphs (10) and (11) of this subsection and a statement of prior representation of the issuer by each firm;
   13. (13) a justification of the decision of whether or not to apply for municipal bond insurance or other credit enhancement, including a comparison of expected bond ratings and borrowing costs for the issue with and without the particular enhancement(s) considered;
   14. (14) copy of preliminary official statement, if available;
   15. (15) a statement of any potential liability of the general revenue fund or any other state funds resulting from the issuance;
   16. (16) a copy of any preliminary written review of the issuance that has been made by the attorney general;

   17. (17) a statement addressing the participation of women and minorities. The purpose of this section is to promote economic opportunity by affording equal access to the procurement of contracts for professional services for the financing of bonds by state issuers. Therefore, the following information about each participant (including, but not limited to, bond counsel, underwriters, underwriter's counsel, and financial advisor) must be included:

       1. (A) the degree of ownership and control of each participant firm by minorities and women;
       2. (B) the number and percentage of professionally employed women and minorities in each participant's firm; and
       3. (C) a brief description of the effort made by each participant to encourage and develop participation of women and minorities. This description can include internal firm recruitment efforts, any offers tendered for apportioning responsibilities by subcontract or joint venture, and the equal opportunity goals and policies of each participant's firm.
   18. (18) The notification procedures used by or on behalf of the issuer to select the participants referenced in paragraph (17) of this subsection.
   19. (19) Applications for the approval of proceedings authorizing the issuance of state securities in the form of commercial paper notes shall contain the information required by paragraphs (1) - (18) of this subsection to the extent it is available or capable of being determined.
5. (e) In addition to the information required by subsection (c) or (d) of this section, an application under this section may include any other relevant information the applicant wants to submit to the board.
6. (f) At any time before the date for consideration of an application by the board, an applicant may withdraw the application. Revisions to an application must be submitted in writing not less than 72 hours prior to the board meeting.

Source Note:The provisions of this §181.3 adopted to be effective August 10, 1988, 13 TexReg 3755; amended to be effective June 26, 1989, 14 TexReg 2901; amended to be effective September 26, 1990, 15 TexReg 5362; amended to be effective October 11, 1994, 19 TexReg 7711; amended to be effective February 27, 2002, 27 TexReg 1335.