(1)Legislative intent. It is the intent of the legislature, in recognition that providing Idaho students with a thorough education is an essential public purpose of the state, to support public charter schools by providing a mechanism to obtain favorable financing on bonds so that less money is obligated toward interest payments and more money remains in public charter schools for the benefit of Idaho’s students. There is hereby created the public charter school facilities program to assist qualifying charter schools in obtaining favorable financing on bonds for facility improvements and construction.
(2)Eligibility. A public charter school seeking to use the public charter school facilities program shall receive approval from the Idaho housing and finance association pursuant to require
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(1) Legislative intent. It is the intent of the legislature, in recognition that providing Idaho students with a thorough education is an essential public purpose of the state, to support public charter schools by providing a mechanism to obtain favorable financing on bonds so that less money is obligated toward interest payments and more money remains in public charter schools for the benefit of Idaho’s students. There is hereby created the public charter school facilities program to assist qualifying charter schools in obtaining favorable financing on bonds for facility improvements and construction.
(2) Eligibility. A public charter school seeking to use the public charter school facilities program shall receive approval from the Idaho housing and finance association pursuant to requirements for issuance of nonprofit facility bonds and to satisfaction of the criteria set forth in this section. To qualify, a public charter school shall submit the following documentation to the Idaho housing and finance association:
(a) A letter of commitment from one (1) of the following:
(i) A national or state-chartered financial institution;
(ii) A community development financial institution; or
(iii) A qualified underwriter or an investment firm;
(b) Evidence that the public charter school has been in academic, operational, and financial good standing according to its authorizer for each of the previous three (3) years;
(c) Annual budgets and cash flow statements projecting that the cost to operate the proposed facility, including future debt service, future occupancy cost, and facility operating expenses, will not exceed twenty percent (20%) of ongoing revenues;
(d) Evidence that the school has operating reserves greater than sixty (60) days of cash on hand and a debt service coverage ratio equal to or greater than one and two-tenths (1.2);
(e) An audit opinion or opinions demonstrating:
(i) An unqualified audit opinion, or a qualified opinion qualified only on the basis of not reporting the actuarial value of the PERSI sick leave plan pursuant to statement no. 45 of the governmental accounting standards board;
(ii) An audit devoid of significant findings and conditions, material weakness, or significant internal control weakness; and
(iii) An audit that does not include a going concern disclosure in the notes or an explanatory paragraph within the audit report for three (3) consecutive years;
(f) Certification from a public charter school’s board chair or treasurer that projected future budgets and cash flows are based on reasonable assumptions related to level or increasing projected enrollment or waitlist and projected total income, including any matching funds and donations contingent on receipt of a loan under this section;
(g) Evidence of strong academic results, including above-state average growth or proficiency on the Idaho standards achievement test. A public charter school with enrollment comprised of one hundred percent (100%) at-risk students as defined by section 33-1001 (3), Idaho Code, is exempt from this requirement; and
(h) Any additional information requested by the Idaho housing and finance association.
(3) Approval to participate. Upon receipt of documentation satisfying the criteria set forth in subsection (2) of this section, the Idaho housing and finance association shall notify the public charter school and the state treasurer that the school has been approved to participate in the public charter school facilities program if:
(a) The public charter school complies with the requirements set forth in subsection (4) of this section; and
(b) The public charter school’s participation would not cause a violation of the limitations set forth in subsection (8) of this section.
Additional requirements and security interests may be imposed by agreement of the school and bondholder or trustee.
(4) Restricted debt service reserve account.
(a) A school participating in the public charter school facilities program shall agree to have deposited a minimum of twelve (12) months’ payment on principal and interest in a restricted debt service reserve account established and held by the bondholder or trustee.
(b) Except as provided in paragraph (c) of this subsection, money in a participating public charter school’s restricted debt service reserve account may not be withdrawn if the amount withdrawn would reduce the level of money in the account to less than twelve (12) months’ payment on principal and interest.
(c) As long as applicable bonds issued under the facilities program remain outstanding, money in a restricted debt service reserve account may be withdrawn in an amount that would reduce the level to less than twelve (12) months’ payment on principal and interest if the money is withdrawn for the purpose of:
(i) Paying the principal, redemption price, or interest on a bond when due if the state payments intercepted pursuant to subsection (5) of this section, plus funded grants and other revenues pledged by the participating public charter school for payment of the bond, are insufficient to make the payment; or
(ii) Paying any redemption premium required to be paid when the bonds are redeemed prior to maturity if no bonds will remain outstanding.
(5) Intercept. As a requirement to participate in the public charter school facilities program, a participating public charter school shall provide a directive to the Idaho department of education that all payments to the school pursuant to the state educational support program shall be paid directly to the bond trustee to set aside funds in accordance with the bond indenture. All remaining funds shall be forwarded to the public charter school. The payment directive required in this subsection may not be revoked or amended.
(6) Public charter school facilities program fund. There is hereby established in the state treasury the public charter school facilities program fund, which shall consist of moneys made available through appropriations, fees, grants, gifts, or any other source to fulfill the purposes of this section. Moneys in the fund are hereby continuously appropriated for the purposes of this section and shall be expended only for the purposes stated herein. Any interest earned on the investment of idle moneys in the public charter school facilities program fund shall be returned to the public charter school facilities program fund. Schools participating in the public charter school facilities program shall pay a onetime fee in an amount equal to one-half percent (0.5%) of par at the time of issuance and an annual fee in an amount equal to seventy-five thousandths percent (0.075%) on the outstanding balance, which shall be deposited in the public charter school facilities program fund.
(7) Nonpayment.
(a) If a public charter school participating in the public charter school facilities program has defaulted on its obligation to pay, a draw on its restricted debt service reserve account shall be made, then the following shall occur:
(i) The bond trustee shall exercise its remedies under the bond indenture and loan agreement.
(ii) Within ten (10) days following the withdrawal from the restricted debt service account, the bondholder or trustee shall notify the Idaho housing and finance association, the state treasurer, and the state controller of the shortfall in the school’s restricted debt service reserve account.
(iii) Within fifteen (15) days of the notice provided pursuant to subparagraph (ii) of this paragraph, the controller shall transfer, from the public charter school facilities program fund set forth in subsection (6) of this section, to the public school income fund and then to the school’s restricted debt service reserve account an amount equal to one (1) month’s interest on the bonds based on the interest payments for which the draw on the restricted debt service reserve account occurred. Moneys transferred to the public school income fund pursuant to this subparagraph shall be continuously appropriated for such purposes.
(iv) By December 1 of each year, the treasurer shall submit to the governor a letter certifying the amount, if any, required to restore amounts on deposit in the restricted debt service reserve accounts of participating public charter schools and the public charter school facilities program fund. The governor shall send to the legislature a statement of the expenditure of moneys from the public charter school facilities program fund as specified in section 8, article IV of the Idaho constitution and report the amount needed to restore funds in the restricted debt service reserve accounts to the amount required in subsection (4)(b) of this section. The legislature may appropriate money to restore amounts on deposit in the restricted debt service reserve account of a defaulting public charter school to the amounts required in subsection (4)(b) of this section or to redeem all outstanding bonds issued for a defaulting public charter school, the source of which may be the public charter school facilities program fund or any other available funds. The legislature may also appropriate money to restore amounts withdrawn from the public charter school facilities program fund.
(b) Repayment. If money has been withdrawn from the public charter school facilities program fund pursuant to paragraph (a) of this subsection, the school shall repay the fund from the school’s allocation of facilities funds pursuant to section 33-5208 (5), Idaho Code, at a time agreed to by the superintendent of public instruction over a period of years until the amount so withdrawn has been repaid to the public charter school facilities program fund, as long as the repayment does not cause an event of default on a facility lease or loan.
(8) Limitations.
(a) Bonds issued for the benefit of public charter schools using the public charter school facilities program shall not be indebtedness of the state, but are special obligations payable solely from:
(i) Revenues or other funds pledged by the qualifying public charter school; and
(ii) Amounts appropriated by the legislature pursuant to subsection (7) of this section.
(b) The Idaho housing and finance association may not use the public charter school facilities program when issuing bonds for a public charter school under the facilities program if the total par amount outstanding under the facilities program as of the proposed closing date of the bonds to be issued, plus the par amount of the bonds to be issued, would cause the maximum aggregate annual debt service of all bonds outstanding under the facilities program to exceed the amount in the public charter school facilities program fund.
(c) Bonds issued under the public charter school facilities program shall not be subordinate to any other obligations used to finance the same project.