S&P - Public Finance Criteria (2007). - The Global Clearinghouse

Tax-Secured Debtenter this program and is accepted by the state, itcannot rescind its application as long as any debtobligation of that issue is outstanding. Upon notificationto the commissioner of education, the commissionerof finance will issue a warrant authorizing thecommissioner of education to pay the paying agentthe amounts necessary on or before the date paymentis due. The amounts needed for this purpose areappropriated to the Department of Education fromthe state general fund.Minnesota County Credit Enhancement Program (‘AAA’)Governing statutes: Authorized by MinnesotaStatutes, Section 373.45, the Minnesota programwas designed to provide a state guarantee of thepayment of principal and interest on a county’s GOor lease debt obligations issued after June 30, 2000for the purpose of funding the construction of jails,correctional facilities, law enforcement facilities,social services and human services facilities, or solidwaste facilities. This rating moves in tandem withthat of the state.Eligibility requirements: In order to qualify forparticipation in the County Credit EnhancementProgram, the bonds must be issued after June 30th,2000 and the county must apply to the PublicFacilities Authority prior to issuing the bonds. Thecounty must also enter into an agreement with theauthority obligating the county to be bound by theprovisions of Minnesota Statutes, Section 373.45Subd. 3.Program provisions: A participating county mustenter into an agreement with the Public FacilitiesAuthority obligating the county to:■ Deposit with the paying agent three days beforethe date on which the payment is due an amountsufficient to make that payment;■ Notify the authority, if the county will be unableto make all or a portion of the payment; and■ Include a provision in the bond resolution andcounty’s agreement with the paying agent for thedebt obligation that requires the paying agent toinform the commissioner of finance if it becomesaware of a potential default in the payment of principalor interest on that issue or if, on the day twobusiness days before the date a payment is due onthat issue, there are insufficient funds to make thepayment on deposit with the paying agent.The provisions of this agreement are binding toan issue as long as any debt obligation of the issueremains outstanding.After receipt of a notice of a potential default inpayment of principal or interest in debt obligationscovered by this agreement, and after consultationwith the county, the paying agent, and after verificationof the accuracy of the information provided,the authority shall notify the commissioner of thepotential default. The notice must include a finalfigure as to the amount due that the county will beunable to repay on the date due. Upon receipt ofthis notice from the authority, the commissionershall issue a warrant and authorize the authority topay to the paying agent for the debt obligation thespecified amount on or before the date due. Theamounts needed for the purposes of this subdivisionare annually appropriated to the authority from thegeneral fund.If Minnesota makes a guarantee payment on aparticipating county’s behalf, the county is obligatedto repay the state with interest and would berequired to levy a property tax if necessary, to makesuch repayments.Mississippi State Aid CapitalImprovement Bond Program (‘AA-’)Governing statute: The program was created underthe state’s Accountability and Adequate EducationProgram Act of 1997, which allows school districtsto authorize the state board of education to withholdan amount of the district’s MississippiAdequate Education Program (MAEP) funds andpledge these funds for debt service on capitalimprovement bonds. The authorization thatallowed districts to pledge MAEP funds for debtservice expired on June 30, 1998. This rating movesin conjunction with that of the state.Eligibility requirements: To qualify for the program,districts had to request that the stateDepartment of Education directly deposit theirMAEP funds with an independent paying agent andspecify this in the bond resolution. Upon stateapproval of this request, the state irrevocablyagreed to perform this function as long as programdebt is outstanding.Program provisions: State funds are depositeddirectly to a paying agent in advance of the debtservice due date and these monies are held in investmentsthat meet Standard & Poor’s criteria. Bondissues using this security were sized according to theamount of MAEP allocation each district received(up to $160 per pupil based on average daily attendance)and bond maturities could not exceed 20years. MAEP funds had to provide at least 1x debtservice coverage. The state, by statute will take allactions necessary to ensure that the amount of thedistrict’s MAEP funds pledged to repay state aidcapital improvement bonds will not be reduced aslong as the program bonds are outstanding.Missouri Direct Deposit of State Aid Program (‘AA+’)Governing statutes: In 1995, the MissouriLegislature adopted Senate Bill 301 that establisheda program to assist Missouri school districts with94 Standard & Poor’s Public Finance Criteria 2007