DALLAS - The Texas Permanent School Fund Bond Guarantee Program, closed since March, will again back bonds issued by school districts in the state to pay for school construction starting next year, the Texas Education Agency announced.
The Internal Revenue Service notified TEA on Wednesday that it will update its regulation to allow bonds to be guaranteed up to 500% of the cost value of the Permanent School Fund effective immediately.
The bond insurance provides triple-A ratings to school districts, saving them millions of dollars in interest cost.
“This IRS ruling increases our capacity to back school district bonds by hundreds of millions of dollars,” said Commissioner of Education Robert Scott. “It will help school districts to build new buildings for generations to come. It will also help school districts keep tax rates down because this will save them money.”
The Permanent School Fund currently has a cost value of roughly $23 billion, which includes assets managed by State Board of Education and TEA, as well as the General Land Office. Before the ruling, the fund was able to back bonds up to 250% of the lower of its cost or value.
