A. The Arizona public school credit enhancement program is established to assist achievement district schools in obtaining more favorable financing by guaranteeing the payment of principal and interest on guaranteed financings issued by or on behalf of achievement district schools.

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B. To be considered for a guaranteed financing, an achievement district school shall submit an application to the board, on a form and in the manner prescribed by the board, that contains at least the following information:

1. Proof of approval of the school’s application pursuant to article 10 of this chapter at the time of applying to the board. A school’s failure to maintain ongoing achievement district school eligibility does not impair or affect the validity or enforceability of the program guarantee.

2. Exhibited sustainability in the financial operations of the school over at least two years based on financial metrics determined by the board, including days cash on hand, the ratio of operating revenues to debt service or the ratio of the financed property value to any debt being secured by the property.

3. For charter schools, demonstrated experience in operating and managing charter schools with high academic outcomes for at least two consecutive years.

4. Information regarding the proposed guaranteed financing by or on behalf of the school, including the planned timing of the financing, sources and uses of monies, the expected principal and interest payment dates and amounts by payment date, plans for funding reserves, expected ratings, if any, and any other information that would be useful to the board’s deliberations.

5. For charter schools, an acknowledgement that the guaranteed financing will include a fully funded debt service reserve equal to at least the maximum amount permitted by federal law in connection with the issuance of tax exempt obligations.

6. The identification of any property being pledged as collateral to the guaranteed financing and the value of the property.

7. Any additional information that the board determines to be reasonable or necessary in order to fully evaluate the application.

C. The board shall meet regularly to evaluate applications and shall either approve or reject each application submitted. In considering the approval of any application, the board shall ensure, if the application is approved:

1. That the program leverage ratio will not exceed a ratio of three and one-half to one as a result of the approval of the guaranteed financing being considered.

2. That, after ten guaranteed financings have been approved by the board, not more than twenty-five percent of the aggregate principal amount of guaranteed financings will be rated less than "BB-" or a comparable rating by a nationally recognized bond rating agency.

D. The board shall report each decision on each application to the achievement district school within ten business days after the board’s decision.

E. If approved by the board for guaranteed financing, each charter school shall pay an annual program participation fee in the amount of at least 0.25 percent of the outstanding principal amount of the guaranteed financing in any year as determined by the board for as long as the guaranteed financing is outstanding. Program participation fees for district public schools shall be as determined by the board. Program participation fees due in any year shall be paid in equal amounts on the date that interest is due and payable to investors under the guaranteed financing or at such other time as may be required by the board. Program participation fees shall be paid to the state treasurer on behalf of the program for deposit in the fund.

F. The terms and conditions of the board in approving a guaranteed financing may be set forth in a written agreement between the board and the achievement district school.