(a) Any LOC submitted as a financial guarantee for combined amounts greater than $10,000 and less than $250,000 pursuant to these rules must be from financial institutions which meet the following qualifications:
  (1) Qualifications for Banks.
    (A) Must be federally insured;
    (B) Sheshunoff rating must be ten or better; and
    (C) Total assets must be at least fifty million dollars.
  (2) Qualifications for Savings and Loan Associations.
    (A) Must be federally insured; and
    (B) Tangible capital must be at least:
      (i) 1.5% of total assets if total assets are fifty million dollars or more; or
      (ii) Tangible capital must be at least 3.0% of total assets if total assets are less than fifty million dollars; and
    (C) Sheshunoff rating must be 30 or better.
(b) Any LOC submitted as a financial guarantee for combined amounts greater than $250,000 pursuant to these rules must be from financial institutions which meet the following qualifications:
  (1) Qualifications for Banks.
    (A) Must be federally insured;
    (B) Sheshunoff rating must be 30 or better; and
    (C) Total assets must be at least seventy-five million dollars.
  (2) Qualifications for Savings and Loan Associations.
    (A) Must be federally insured;
    (B) Tangible capital must be at least:
      (i) 3.0% of total assets and total assets must be seventy-five million dollars or more; or
      (ii) Tangible capital must be at least 5.0% of total assets if total assets are less than seventy-five million dollars; and
    (C) Sheshunoff rating must be 30 or better.
(c) All LOC's must be valid for a minimum of one year from the date of issuance and if the aggregrate amount of the LOC is $100,000 or more, the LOC shall be held and administered in an account for the benefit of the district by a bank corporate trust department. The district shall authorize the agent to administer all draws on the letter of credit including a final draw prior to the LOC expiration date if the letter of credit is:
  (1) not renewed for an additional year at least 45 days prior to its date of expiration;
  (2) not called upon in its entirety at least 30 days prior to its date of expiration;
  (3) not found to be unnecessary by the commission at least 45 days prior to its date of expiration; or
  (4) no longer required because the construction project has been completed as certified by the district's engineer at least 45 days prior to its date of expiration.
(d) Should the financial institution or agent deposit funds in an account in the name of the district, the district shall not commit or expend such funds until it has received written authorization from the executive director.
(e) All LOC's required pursuant to these rules must be approved by the commission staff.
(f) Form of letter of credit. The following form shall be used as a letter of credit for the financial guarantee for utilities construction and/or construction and paving of streets.
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Source Note: The provisions of this §293.56 adopted to be effective September 5, 1986, 11 TexReg 3736; amended to be effective June 30, 1993, 18 TexReg 3758; amended to be effective April 15, 1994, 19 TexReg 2301; amended to be effective October 22, 1996, 21 TexReg 9905; amended to be effective October 6, 2002, 27 TexReg 9365