Part 10. TEXAS WATER DEVELOPMENT BOARD
Chapter 363. FINANCIAL ASSISTANCE PROGRAMS
Subchapter A. GENERAL PROVISIONS
Division 3. FORMAL ACTION BY THE BOARD
The Texas Water Development Board (board) proposes an amendment to §363.34 relating to criteria for listing financial guarantors acceptable to the board. The rules in Chapter 363 apply to state funded loan programs. The amendment adds the word "stable" after the word "triple-A." This amendment is proposed to clarify that the board will consider placement on the list of authorized financial guarantors only those entities who have attained a triple-A stable rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.
The board proposes this amendment because of recent market fluctuations related to investments by financial guarantors in certain collateralized debt obligations based on subprime mortgages. The board's purpose is to ensure the authorized list of financial guarantors for board loans have attained the highest rankings currently available by the rating agencies.
The proposed amendment to §363.34(b)(1) is authorized pursuant to Water Code §15.005 relating to Consideration of Certain Applications relating to flood control projects from the Water Loan Assistance Program, §15.105 relating to Considerations in Passing on Applications from the Water Loan Assistance Program, §15.403 relating to rules to carry out the Research and Planning Program, §15.403 relating to rules for Water and Wastewater Financial Assistance for Disadvantaged Rural Communities, §15.958 relating to rules to administer the Colonia Self-Help Program, §15.977 relating to rules for loans from the Water Infrastructure Fund, §15.995 relating to rules necessary to administer loans from the Rural Water Assistance Fund, §16.342 relating to rules necessary to administer the economically distressed areas programs, §36.372 relating to rules necessary to administer the Groundwater District Loan Assistance Fund, and §6.190 authorizing the board to adopt rules necessary to carry out its powers and duties.
Ms. Melanie Callahan, Chief Financial Officer, has determined that for the first five years the amended section is in effect, there will be no significant fiscal implications for state or local governments as a result of implementing the amendment to this section. Local governments that require insurance to guarantee a loan from the board are not expected to incur higher insurance rates as the result of this proposed amendment because the board has always required high ratings for financial guarantors. This amendment simply clarifies the type of rating required for board approval of the use of any guarantor.
Ms. Callahan has determined that for the first five years the rules is in effect there are not expected to be any reductions in the cost to the state or to local governments as the result of administering the rule.
Ms. Callahan has determined that during the first five years this amendment is in effect that there is not expected to be any increase in or loss of revenue to the state or local governments as the result of administering the rule.
Ms. Callahan has also determined that for each year of the first five years the section is in effect, the public benefit will be better protection from potential bond defaults because the board's selected financial guarantors will have the highest rating available from the rating agencies. Further, Ms. Callahan has determined that there is no economic cost to the board, the entity required to comply with the rule. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed section.
Comments on the proposed amendment to §363.34(b)(1) may be submitted by mail to Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by email to rulescomments@twdb.state.tx.us, or by fax at (512) 463-5580. All comments must be received by 5:00 p.m. on March 26, 2008.
This amendment is proposed under §6.101, Texas Water Code, which authorizes the board to adopt rules necessary to carry out the powers and duties of the board pursuant to §15.605, Texas Water Code, which requires the board to adopt rules to administer the fund.
Statutory authority: Texas Water Code, §6.101. The amendment of this section is proposed under the authority of the Texas Water Code §6.101, which provides the board with the authority to adopt rules necessary to carry out the powers and duties of the board. No other statute or codes are affected by this amendment.
§363.34.Financial Guarantees for Political Subdivision Bonds and Required Reserves.
(a) Financial Guarantees. The board will consider accepting surety bonds in lieu of required cash reserve deposits and insurance policies for political subdivision bonds. At the time of loan commitment and at loan closing, only those financial guarantors that have been approved by the board or its Finance Committee are authorized to underwrite financial guarantee policies on political subdivision bonds approved by the board.
(b) Criteria for Authorized List. The board will maintain a list of authorized financial guarantors. In order to be considered for placement on the list, a guarantor must meet the following minimum criteria:
(1) the financial guarantor must be a nationally recognized provider of municipal bond insurance and must have a triple-A stable insurer financial strength rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.; and
(2) the financial guarantor must have a triple-A insurer financial enhancement rating with Standard & Poor's.
(c) Review of Policies. The executive administrator shall review all policies of insurance submitted by authorized financial guarantors and may reject any policy of insurance or surety bond which does not protect the interests of the board's financial program.
(d) Removal from Authorized List. The executive administrator may remove a financial guarantor from the authorized list at any time that a change in status would cause the financial guarantor to fail to meet the minimum criteria.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on February 25, 2008.
TRD-200801127
Ingrid K. Hansen
Acting General Counsel
Texas Water Development Board
Earliest possible date of adoption: April 13, 2008
For further information, please call: (512) 463-4946
Subchapter D. BOARD ACTION ON APPLICATION
The Texas Water Development Board (board) proposes an amendment to §371.53 relating to criteria for listing financial guarantors acceptable to the board. The amendment adds the word "stable" after the word "triple-A." This amendment is proposed to clarify that the board will consider placement on the list of authorized financial guarantors only those entities that have attained a triple-A stable rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.
The board proposes this amendment because of recent market fluctuations related to investments by financial guarantors in certain collateralized debt obligations based on subprime mortgages. The board's purpose is to ensure the authorized list of financial guarantors for board loans have attained the highest rankings currently available by the rating agencies.
The proposed amendment to §371.53(b)(1) is authorized pursuant to Water Code §15. 605 that requires the board to adopt necessary rules to carry out Subchapter J relating to Financial Assistance for Water Pollution Control.
Ms. Melanie Callahan, Chief Financial Officer, has determined that for the first five years the amended section is in effect, there will be no significant fiscal implications for state or local governments as a result of implementing the amendment to this section. Local governments that require insurance to guarantee a loan from the board are not expected to incur higher insurance rates as the result of this proposed amendment because the board has always required high ratings for financial guarantors. This amendment simply clarifies the type of rating required for board approval of the use of any guarantor.
Ms. Callahan has determined that for the first five years the rules is in effect there are not expected to be any reductions in the cost to the state or to local governments as the result of administering the rule.
Ms. Callahan has determined that during the first five years this amendment is in effect that there is not expected to be any increase in or loss of revenue to the state or local governments as the result of administering the rule.
Ms. Callahan has also determined that for each year of the first five years the section is in effect, the public benefit will be better protection from potential bond defaults because the board's selected financial guarantors will have the highest rating available from the rating agencies. Further, Ms. Callahan has determined that there is no economic cost to the board, the entity required to comply with the rule. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed section.
Comments on the proposed amendment to §371.53(b)(1) may be submitted by mail to Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by email to rulescomments@twdb.state.tx.us, or by fax at (512) 463-5580. All comments must be received by 5:00 p.m. on March 26, 2008.
This amendment is proposed under §6.101, Texas Water Code, which authorizes the board to adopt rules necessary to carry out the powers and duties of the board pursuant to §15.605, Texas Water Code, which requires the board to adopt rules to administer the fund.
Statutory authority: Texas Water Code, §6.101. The amendment of this section is proposed under the authority of the Texas Water Code §6.101, which provides the board with the authority to adopt rules necessary to carry out the powers and duties of the board. No other statute or codes are affected by this amendment.
§371.53.Financial Guarantees for Political Subdivision Bonds and Required Reserves.
(a) Financial Guarantees. The board will consider accepting surety bonds in lieu of required cash reserve deposits and insurance policies for political subdivision bonds. At the time of loan commitment and at loan closing, only those financial guarantors that have been approved by the board or its Finance Committee are authorized to underwrite financial guarantee policies on political subdivision bonds approved by the board.
(b) Criteria for Authorized List. The board will maintain a list of authorized financial guarantors. In order to be considered for placement on the list, a guarantor must meet the following minimum criteria:
(1) the financial guarantor must be a nationally recognized provider of municipal bond insurance and must have a triple-A stable insurer financial strength rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.; and
(2) the financial guarantor must have a triple-A insurer financial enhancement rating with Standard & Poor's.
(c) Review of Policies. The executive administrator shall review all policies of insurance submitted by authorized financial guarantors and may reject any policy of insurance or surety bond which does not protect the interests of the board's financial program.
(d) Removal from Authorized List. The executive administrator may remove a financial guarantor from the authorized list at any time that a change in status would cause the financial guarantor to fail to meet the minimum criteria.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on February 25, 2008.
TRD-200801128
Ingrid K. Hansen
Acting General Counsel
Texas Water Development Board
Earliest possible date of adoption: April 13, 2008
For further information, please call: (512) 463-4946
Subchapter A. GENERAL PROVISIONS
Division 4. BOARD ACTION ON APPLICATIONS
The Texas Water Development Board (board) proposes an amendment to §375.53 relating to criteria for listing financial guarantors acceptable to the board. The amendment adds the word "stable" after the word "triple-A." This amendment is proposed to clarify that the board will consider placement on the list of authorized financial guarantors only those entities that have attained a triple-A stable rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.
The board proposes this amendment because of recent market fluctuations related to investments by financial guarantors in certain collateralized debt obligations based on subprime mortgages. The board's purpose is to ensure the authorized list of financial guarantors for board loans have attained the highest rankings currently available by the rating agencies.
The proposed amendment to §375.53(b)(1) are authorized pursuant to Water Code §15.601 which authorizes the creation of the state water pollution control revolving fund and which authorizes the board to administer the fund through rules adopted by the board. This proposed amendment is a rule necessary to administer the fund. Additionally, Water Code §15.603(f) relating to the creation and administration of the revolving fund program authorizes the board to administer the fund in the manner provided by the rules of the board. Finally, Water Code §15.605 requires the board to adopt necessary rules to carry out Subchapter J relating to Financial Assistance for Water Pollution Control.
Ms. Melanie Callahan, Chief Financial Officer, has determined that for the first five years the amended section is in effect, there will be no significant fiscal implications for state or local governments as a result of implementing the amendment to this section. Local governments that require insurance to guarantee a loan from the board are not expected to incur higher insurance rates as the result of this proposed amendment because the board has always required high ratings for financial guarantors. This amendment simply clarifies the type of rating required for board approval of the use of any guarantor.
Ms. Callahan has determined that for the first five years the rules is in effect there are not expected to be any reductions in the cost to the state or to local governments as the result of administering the rule.
Ms. Callahan has determined that during the first five years this amendment is in effect that there is not expected to be any increase in or loss of revenue to the state or local governments as the result of administering the rule.
Ms. Callahan has also determined that for each year of the first five years the section is in effect, the public benefit will be better protection from potential bond defaults because the board's selected financial guarantors will have the highest rating available from the rating agencies. Further, Ms. Callahan has determined that there is no economic cost to the board, the entity required to comply with the rule. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed section.
Comments on the proposed amendment to §375.53(b)(1) may be submitted by mail to Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by email to rulescomments@twdb.state.tx.us, or by fax at (512) 463-5580. All comments must be received by 5:00 p.m. on March 26, 2008.
This amendment is proposed under §6.101, Texas Water Code, which authorizes the board to adopt rules necessary to carry out the powers and duties of the board pursuant to §15.605, Texas Water Code, which requires the board to adopt rules to administer the fund.
Statutory authority: Texas Water Code, §6.101. The amendment of this section is proposed under the authority of the Texas Water Code §6.101, which provides the board with the authority to adopt rules necessary to carry out the powers and duties of the board. No other statute or codes are affected by this amendment.
§375.53.Financial Guarantees for Political Subdivision Bonds and Required Reserves.
(a) Financial Guarantees. The board will consider accepting surety bonds in lieu of required cash reserve deposits and insurance policies for political subdivision bonds. At the time of loan commitment and at loan closing, only those financial guarantors that have been approved by the board or its Finance Committee are authorized to underwrite financial guarantee policies on political subdivision bonds approved by the board.
(b) Criteria for Authorized List. The board will maintain a list of authorized financial guarantors. In order to be considered for placement on the list, a guarantor must meet the following minimum criteria:
(1) the financial guarantor must be a nationally recognized provider of municipal bond insurance and must have a triple-A stable insurer financial strength rating with Standard & Poor's, Moody's Investors Service, Inc. and Fitch, Inc.; and
(2) the financial guarantor must have a triple-A insurer financial enhancement rating with Standard & Poor's.
(c) Review of Policies. The executive administrator shall review all policies of insurance submitted by authorized financial guarantors and may reject any policy of insurance or surety bond which does not protect the interests of the board's financial program.
(d) Removal from Authorized List. The executive administrator may remove a financial guarantor from the authorized list at any time that a change in status would cause the financial guarantor to fail to meet the minimum criteria.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on February 25, 2008.
TRD-200801129
Ingrid K. Hansen
Acting General Counsel
Texas Water Development Board
Earliest possible date of adoption: April 13, 2008
For further information, please call: (512) 463-4946