minutes of the board of regents of the...

MINUTES

OF

THE BOARD OF REGENTS

OF

THE TEXAS STATE UNIVERSITY SYSTEM

Special Called Board Meeting

October 22, 2009

TSUS Called Board of Regents Meeting October 22, 2009

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TABLE OF CONTENTS

I. CALL TO ORDER ....................................................................................................... 3 II. ATTENDANCE ........................................................................................................ 3 III. AGENDA ITEMS ..................................................................................................... 3 2010-2 TSUS: Consideration and action with respect to the “Fourteenth Supplemental Resolution to the Master Resolution Authorizing the I ssuance, Sale and Delivery of Board of Regents, Texas State University System Revenue Financing System Revenue Bonds; and Approving and Authorizing Instruments and Procedures Relating Thereto” .............................................................................................................. 3 2010-3 TSUS: Texas Higher Education Coordinating Board Sub-grant under the American Recovery and Reinvestment Act ....................................................................... 3 IV. ADJOURNMENT ..................................................................................................... 4

Appendix A: Fourteenth Supplemental Resolution to the Master Resolution Authorizing the Issuance, Sale and Delivery of Board of Regents, Texas State University System Revenue Financing System Revenue Bonds; and Approving and Authorizing Instruments and procedures Relating Thereto Appendix B: 2009 ARRA Terms and Conditions Appendix C: ARRA Application Program Year 2009 Appendix D: ARRA Guidelines Program Year 2009


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I. CALL TO ORDER

The special called telephonic Board of Regents meeting of the Texas State University System was called to order on Thursday, October 22, 2009 at 1:30 p.m. CST by Chairman Ron Blatchley.

II. ATTENDANCE Present Absent Chairman Ron Blatchley Regent Kevin Lilly Vice Chairman Trisha S. Pollard Regent Donna Williams Regent Charlie Amato Regent Greg Wilkinson Regent Ron Mitchell Regent Michael Truncale Regent David Montagne Student Regent William Patterson Also Present: Chancellor Charles R. Matthews; Dr. Fernando Gomez, Vice Chancellor & General Counsel; Dr. Roland Smith, Vice Chancellor of Finance; Ms. Carole Fox, TSUS System Auditor; Ms. Kelly Wylie, Executive Assistant to the Chancellor

III. AGENDA ITEMS

2010-2 TSUS: Consideration and action with respect to the “Fourteenth Supplemental Resolution to the Master Resolution Authorizing the Issuance, Sale and Delivery of Board of Regents, Texas State University System Revenue Financing System Revenue Bonds; and Approving and Authorizing Instruments and Procedures Relating Thereto”

Upon motion of Regent Amato, seconded by Regent Mitchell, it is ordered that the consideration and action with respect to the “Fourteenth Supplemental Resolution to the Master Resolution Authorizing the Issuance, Sale and Delivery of Board of Regents, Texas State University System Revenue Financing System Revenue Bonds; and Approving and Authorizing Instruments and Procedures Relating Thereto” be adopted as shown in Exhibit A (attached). 2010-3 TSUS: Texas Higher Education Coordinating Board Sub-grant under the American Recovery and Reinvestment Act

Upon motion of Regent Montagne, seconded by Regent Pollard, the Board made the following findings and issued the following orders:

Findings

1. The American Recovery and Reinvestment Act (ARRA) was enacted by the

United States Congress to improve the nation’s economy and promote economic recovery, inter alia, by providing grants to help “stabilize State and local


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government budgets, in order minimize and avoid reductions in essential services”;

2. By agreement with Texas Governor’s Office, the Texas Higher Education Coordinating Board (THECB) has invited applications for sub-grants from “Institutions of Higher Education as defined in section 61.003 of the Texas Education Code”;

3. Pursuant to a rule of long standing, this Board has authorized Texas State

University System (TSUS) institutions to apply for and receive “[p]rivate, governmental, and foundation grants or agreements in which the donor or agency stipulates the purpose for which the funds are to be expended” (see Rules and Regulations, Chapter III, Sub-paragraph 1.11(1));

4. The Congress and THECB, as an administering ARRA agency in Texas, have

promulgated lengthy and explicit stipulations as to eligibility for and uses to which these sub-grants may be put; and,

5. Under the leadership of the Vice Chancellor for Finance, working with

component institution vice presidents for finance and other executive and professional support staffs, are preparing and submitting applications for sub-grants in the total approximate sum of $21,700,000.

Orders

1. Be it ordered that the authority previous granted by this Board in Rules and

Regulations, Chapter III, Sub-paragraph 1.11(1) be reaffirmed, the Vice Chancellor for Finance and/or his designees being hereby directed to exercise such authority as he deems necessary or reasonable to accomplish securing of said grant funds to TSUS and its component institutions; and,

2. Be it further ordered that the Vice Chancellor for Finance, through the Board’s Finance and Audit Committee, keep the Board informed on the progress of this ARRA-THECB grant program.

IV. ADJOURNMENT Upon motion of Regent Montagne, seconded by Williams with all regents voting aye, the meeting was adjourned at 1:40 p.m.

Charles R. Matthews Chancellor and Secretary to the Board


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TSUS\14thSupp09A: Res

Draft 10/19/09

FOURTEENTH SUPPLEMENTAL RESOLUTION TO THE MASTER RESOLUTIONAUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF BOARD OF REGENTS,TEXAS STATE UNIVERSITY SYSTEM REVENUE FINANCING SYSTEM REVENUE

BONDS; AND APPROVING AND AUTHORIZING INSTRUMENTS ANDPROCEDURES RELATING THERETO

Adopted October 23, 2009

iiTSUS\14thSupp09A: Res

FOURTEENTH SUPPLEMENTAL RESOLUTION TO THE MASTER RESOLUTIONAUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF BOARD OF REGENTS,TEXAS STATE UNIVERSITY SYSTEM REVENUE FINANCING SYSTEM REVENUEBONDS; AND APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURESRELATING THERETO

TABLE OF CONTENTSPage

PREAMBLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2. AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS . . . . . . . . . . . . 3(a) Amount and Designation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3(b) Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES, AND TERMSOF BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

(a) Terms of Each Series of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3(b) Award Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(c) Sale of Each Series of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5(d) In General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Section 4. INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Section 5. REGISTRATION, TRANSFER, AND EXCHANGE; AUTHENTICATIONAND BOOK-ENTRY-ONLY SYSTEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

(a) Paying Agent/Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6(b) Registration Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6(c) Ownership of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6(d) Payment of Bonds and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7(e) Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7(f) Transfer, Exchange or Replacement. . . . . . . . . . . . . . . . . . . . . . . . . . . 7(g) Substitute Paying Agent/Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8(h) Book-Entry-Only System.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9(i) Successor Securities Depository; Transfers Outside Book-Entry-Only System.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9(j) Payments to Cede & Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10(k) Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Section 6. FORM OF BOND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

iiiTSUS\14thSupp09A: Res

Section 7. ESTABLISHMENT OF REVENUE FINANCING SYSTEM ANDISSUANCE OF PARITY DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Section 8. SECURITY, PAYMENTS AND PERFECTION. . . . . . . . . . . . . . . . . . . . . . . . 11

Section 9. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 10. DAMAGED, MUTILATED, LOST, STOLEN ORDESTROYED BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(a) Replacement Bonds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(b) Application for Replacement Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(c) Payment in Lieu of Replacement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(d) Charge for Issuing Replacement Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12(e) Authority for Issuing Replacement Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Section 11. AMENDMENT OF SUPPLEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13(a) Amendments Without Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13(b) Amendments With Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13(c) Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(d) Receipt of Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(e) Effect of Amendments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(f) Consent Irrevocable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14(g) Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15(h) Insurer Consent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Section 12. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON THE TAX-EXEMPT BONDS. . . . . . . . . . . . . . . . . . . . . . . . . 15(a) Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15(b) Rebate Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16(c) Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17(d) Allocation Of, and Limitation On, Expenditures for the Project. . . . . . . . . . . 17(e) Disposition of Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 13. FOURTEENTH SUPPLEMENT TO CONSTITUTE A CONTRACT;EQUAL SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Section 14. SEVERABILITY OF INVALID PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 18

Section 15. PAYMENT AND PERFORMANCE ON BUSINESS DAYS. . . . . . . . . . . . . . 18

Section 16. LIMITATION OF BENEFITS WITH RESPECT TO THE FOURTEENTHSUPPLEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ivTSUS\14thSupp09A: Res

Section 17. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION,CUSIP NUMBERS, PREAMBLE AND INSURANCE. . . . . . . . . . . . . . . . . . . 18

Section 18. COMPLIANCE WITH RULE 15c2-12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19(a) Annual Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19(b) Material Event Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19(c) Limitations, Disclaimers, and Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 20

Section 19. APPLICATION OF BOND PROCEEDS,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Section 20. ADDITIONAL DEFEASANCE PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 22

Section 21. OFFICIAL STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Section 22. FURTHER PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Section 23. DTC LETTER OF REPRESENTATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Section 24. BOND INSURANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Section 25. REFUNDING OF REFUNDED BONDS: ESCROW AGREEMENT; REDEMPTION OF REFUNDED BONDS.. . . . . . 24

Section 26. PUBLIC NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Section 27. REIMBURSEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Section 28. PAYMENT OF ATTORNEY GENERAL FEE. . . . . . . . . . . . . . . . . . . . . . . . . 25

Section 29. NO PERSONAL LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Section 30. REPEAL OF CONFLICTING RESOLUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 25

EXHIBIT A DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1EXHIBIT B FORM OF BOND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1EXHIBIT C DESCRIPTION OF ACCOUNTING PRINCIPLES.. . . . . . . . . . . . . . . . . . . . C-1

TSUS\14thSupp09A: Res

FOURTEENTH SUPPLEMENTAL RESOLUTION TO THE MASTER RESOLUTIONAUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF BOARD OF REGENTS,TEXAS STATE UNIVERSITY SYSTEM REVENUE FINANCING SYSTEM REVENUE

BONDS; AND APPROVING AND AUTHORIZING INSTRUMENTS ANDPROCEDURES RELATING THERETO

WHEREAS, the Legislature of the State of Texas in the Seventy-Fifth Legislature, RegularSession, passed Senate Bill 1907 ("S.B. 1907"), which amends the provisions of the Texas EducationCode (the "Code") concerning the financing of improvements for institutions of higher education,particularly Chapters 54 and 55 of the Code; and

WHEREAS, S.B. 1907 substantially changed the laws under which the Board may issue itsbonds and notes by combining the general use fees heretofore authorized by the Code into tuition;specifically, S.B. 1907 redesignated the general use fee authorized by Section 55.16 of the Code, astuition (under a new Section 54.0513 of the Code); and

WHEREAS, S.B. 1907 made a number of conforming amendments to the Code, includingamending Section 55.16 to provide that the unlimited general use fee previously authorized therebyshall be replaced with an ability of the Board to establish and collect that amount of all "...necessaryfees, tuition, rentals, rates, and other charges...", including tuition "...when and to the extent requiredby the resolution authorizing the issuance of the bonds in any amount required to provide revenuefunds sufficient for the payment of the principal of and interest on the bonds, regardless of any otherprovision or limitation provided by..." the provisions of the Code; and

WHEREAS, S.B. 1907 also contains comprehensive provisions ensuring that its provisionswill not in any manner impair the contractual rights of any party to a contract with the governing bodyof an institution of higher education, including any holders of any outstanding bonds; and

WHEREAS, on August 13, 1998, the Board of Regents of Texas State University Systemadopted the "Master Resolution Establishing The Texas State University System Revenue FinancingSystem" ("Original Master Resolution") and on June 19, 2008 the Board adopted a "ResolutionAmending the Master Resolution Establishing the Texas State University System Revenue FinancingSystem" (the "Amending Resolution" together with the "Original Master Resolution" collectively,referred to as the "Master Resolution") in order to authorize certain springing amendments to theOriginal Master Resolution that provide for the removal of Angelo State University as a Member ofthe Revenue Financing System pursuant to the provisions of H.B. 3564 passed by the 80 Texasth

Legislature upon the occurrence of certain conditions required by the Original Master Resolution andadd to the definition of Pledged Revenue those amounts to be received from Texas Tech UniversitySystem ("TTUS") pursuant to a binding obligation to be delivered by TTUS to the System inaccordance with the requirements of the Original Master Resolution; and

WHEREAS, on December 30, 2008, the Board received the executed (i) "Agreementbetween the Board of Regents, Texas Tech University System and the Board of Regents, Texas StateUniversity System" dated as of December 19, 2008 and the (ii) Board of Regents of Texas Tech

2TSUS\14thSupp09A: Res

University System Revenue Financing System Refunding Note Thirteenth Series (2008) (the "Note")which together constitute a binding obligation in accordance with Section 7 of the Master Resolutionrelated to the transfer and release of Angelo State University as a Member of the Revenue FinancingSystem; and

WHEREAS, on January 14, 2009, the Board received the approval of the Attorney Generalof the State of Texas and the Texas Bond Review Board; and

WHEREAS, on February 4, 2009, Bond Counsel to the System delivered the opinionrequired by Section 7(b)(2) of the Master Resolution and, therefore, effective February 4, 2009, allconditions precedent to the release of Angelo State University as a member of the Revenue FinancingSystem pursuant to the Master Resolution were completed and the transfer and release waseffectuated as of February 4, 2009; and

WHEREAS, unless otherwise defined herein, capitalized terms used herein shall have themeaning given in the Master Resolution; and

WHEREAS, the Master Resolution establishes the Revenue Financing System and pledgesthe Pledged Revenues to the payment of Parity Debt to be outstanding under the Master Resolution;and

WHEREAS, the Board has outstanding its Prior Encumbered Obligations, and the Board hasprovided in the Master Resolution that it will no longer issue bonds on a parity with the PriorEncumbered Obligations, except that in the Master Resolution the Board reserves the right to issueobligations to refund any Prior Encumbered Obligations and to secure the refunding obligations withthe same source or sources securing the Prior Encumbered Obligations being refunded; and

WHEREAS, the Board has implemented the Revenue Financing System in order to establisha system of financing improvements for Members of the Financing System in a manner consistent withS.B. 1907; and

WHEREAS, the Board has previously adopted the First through Thirteenth SupplementalResolutions authorizing Parity Debt, all of which supplement the Master Resolution; and

WHEREAS, the Board has determined that it is in the best interest of the System to proceedwith issuing bonds in one or more series to finance the cost of facilities and improvements forMembers of the Revenue Financing System and to authorize the potential refunding of a portion ofits Outstanding Parity Debt as described in the definition of Potential Refunded Bonds herein; and

WHEREAS, the bonds authorized to be issued in one or more series by this FourteenthSupplemental Resolution (the "Fourteenth Supplement") are to be issued and delivered pursuant tolaws of the State of Texas, including Chapters 54 and 55 of the Code, Chapter 1371, TexasGovernment Code, as amended, and other applicable laws, including Chapter 1207, Texas


Government Code, as amended, insofar as it may be required in connection with the refunding of anyof the Potential Refunded Bonds, and constitute Parity Debt pursuant to the Master Resolution.

NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF REGENTS, TEXASSTATE UNIVERSITY SYSTEM THAT:

Section 1. DEFINITIONS. In addition to the definitions set forth in the preamble of thisFourteenth Supplement, the terms used in this Fourteenth Supplement (except in the FORM OFBOND) and not otherwise defined shall have the meanings given in the Master Resolution or inExhibit "A" to this Fourteenth Supplement attached hereto and made a part hereof.

Section 2. AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS. (a) Amountand Designation. The Board's bonds each entitled "BOARD OF REGENTS, TEXAS STATEUNIVERSITY SYSTEM REVENUE FINANCING SYSTEM REVENUE BOND," are herebyauthorized to be issued in one or more series and delivered in an aggregate maximum principalamount not to exceed $180,000,000. The title of the Bonds shall be designated by the year in whicheach Series is awarded pursuant to Section 3 below and in the event that another series of bonds isissued by the Board within a calendar year each Series within that year shall have a letter designationfollowing the year. Any Series of Bonds which is issued for the purpose of refunding all or a portionof the Potential Refunded Bonds may include the refunding designation in the title as set forth in theapplicable Award Certificate. The authority of the System Representative to execute and deliver anAward Certificate for each Series shall expire at 5:00 p.m. on October 22, 2010.

(b) Purpose. The Bonds of each Series are to be issued for the following purposes: (i)ACQUIRING, PURCHASING, CONSTRUCTING, IMPROVING, RENOVATING, ENLARGINGOR EQUIPPING THE PROPERTY, BUILDINGS, STRUCTURES, FACILITIES, ROADS ORRELATED INFRASTRUCTURE FOR THE MEMBERS OF THE REVENUE FINANCING SYSTEMINCLUDING ANY NECESSARY CAPITALIZED INTEREST IN AN AMOUNT NOT TO EXCEEDTHAT AUTHORIZED BY LAW ALL AS FURTHER PROVIDED IN THE AWARD CERTIFICATE,(ii) REFUNDING ALL OR A PORTION OF THE POTENTIAL REFUNDED BONDS, AND (iii)PAYING THE COSTS OF ISSUANCE OF THE BONDS.

Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND TERMS OFBONDS. (a) Terms of Each Series of Bonds. The Bonds of each Series shall initially be issued, sold,and delivered hereunder as fully registered bonds, without interest coupons, numbered consecutively fromR-1 upward (except the initial Bond of each Series delivered to the Attorney General of the State of Texaswhich shall be numbered T-1), payable to the respective initial registered owners thereof, or to theregistered assignee or assignees of said bonds or any portion or portions thereof (in each case, the"Registered Owner"), in the denomination of $5,000 or any integral multiple thereof (an "AuthorizedDenomination"), each Series maturing not later than March 15, 2034, serially or otherwise on the dates,in the years and in the principal amounts, respectively, dated and be either Taxable Bonds, Tax-ExemptBonds or Build America Bonds as provided in Section 4, all as set forth in the Award Certificate of theSystem Representative.


(b) Award Certificate. As authorized by Chapter 1371, Government Code, as amended, theSystem Representative is hereby authorized, appointed, and designated to act on behalf of the Board inselling and delivering the Bonds of each Series and carrying out the other procedures specified in thisFourteenth Supplement, including determining and fixing the date of each Series of the Bonds, anyadditional or different designation or title by which each Series of the Bonds shall be known, the price atwhich each Series of the Bonds will be sold, the years in which each Series of the Bonds will mature, theprincipal amount to mature in each of such years, the aggregate principal amount of each Series of theBonds, whether the Bonds are designated as Tax-Exempt Bonds, Taxable Bonds or Build America Bonds,the rate or rates of interest to be borne by each maturity, the interest payment periods, the dates, price, andterms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of theBoard, as well as any mandatory sinking fund redemption provisions, the amount of capitalized interest,if any, for each Series of Bonds and all other matters relating to the issuance, sale, and delivery of theBonds, all of which shall be specified in a certificate of the System Representative delivered to theSecretary to the Board (the "Award Certificate"); provided that (i) the price to be paid for each Series ofthe Bonds shall not be less than 90% of the aggregate original principal amount thereof plus accruedinterest, if any, thereon from its date to its delivery, (ii) Bonds shall be issued to refund all or a portion ofthe Potential Refunded Bonds only if such refunding, assuming that each Series sold and delivered at thesame time constitutes one Series, results in a present value savings on the Annual Debt ServiceRequirements on the Refunded Bonds, provided further, that in the case of Refunded Bonds being advancerefunded more than 90 days prior to their maturity or earlier redemption, the present value savings on theAnnual Debt Service Requirements must not be less than an amount equal to 3% of the principal amountof such Refunded Bonds being advance refunded, and (iii) each Series of the Bonds shall not bear interestat a rate in excess of the maximum rate allowed by law.

In establishing the aggregate principal amount of a Series of Bonds to be issued to refundRefunded Bonds, the System Representative shall establish an amount, not to exceed the amountauthorized in Section 2, sufficient to provide for the refunding of the Refunded Bonds that will result ina reduction in the Annual Debt Service Requirements that otherwise would be payable from the PledgedRevenues with respect to the Refunded Bonds, on a present value basis, provided further, that inestablishing the aggregate principal amount of a Series of Bonds to be issued to advance refund RefundedBonds more than 90 days prior to their maturity or earlier redemption date, the System Representative shallestablish an amount, not to exceed the amount authorized in Section 2, sufficient to provide for theadvance refunding of such Refunded Bonds that will result in a reduction in the Annual Debt ServiceRequirements that otherwise would be payable from the Pledged Revenues with respect to the RefundedBonds, on a present value basis of at least 3%. The amount of savings to be realized from the refundingshall be shown in each Award Certificate. The Award Certificate of each Series that is issued to refundRefunded Bonds shall also identify the Refunded Bonds being refunded by that Series.

It is further provided, however, that, notwithstanding the foregoing provisions, the Bonds shall notbe delivered unless prior to delivery of each Series (i) the Award Certificate has been executed anddelivered as required by this Fourteenth Supplement and (ii) the particular Series of the Bonds have beenrated by a nationally recognized rating agency for municipal securities in one of the four highest ratingcategories for long term obligations, as required by Chapter 1371, Government Code, as amended.


The System Representative is authorized and directed to determine which facilities andimprovements will be financed with the proceeds of the Bonds taking into account (i) the scheduledcompletion dates of the improvements and facilities financed with the proceeds of the Bonds, (ii) theeconomic projections for each such facility and improvement and the Member on whose campus the facilityor improvement is located and (iii) the projected budget impact on the Financing System of such financing.The designation of which improvements or facilities are to be financed or refinanced with the proceeds ofthe Bonds shall be set forth in the Award Certificate. Before the System Representative may determinethat any improvement or facility is to be financed or refinanced with the proceeds of the Bonds, (i) theimprovement or facility must have been approved for construction and financing by the Board, (ii) theBoard must have made the findings required by Section 5 of the Master Resolution with respect to theParity Debt to be issued for such improvement or facility, and (iii) the project must have received anyrequired approval or review of the Higher Education Coordinating Board to the extent and as required bythe provisions of Section 61.058 of the Texas Education Code.

Each Award Certificate is hereby incorporated in and made a part of this Fourteenth Supplementand shall be filed in the minutes of the Board as a part of this Fourteenth Supplement.

(c) Sale of Each Series of Bonds. To achieve advantageous borrowing costs for the Membersof the Financing System, each Series of the Bonds shall be sold on a negotiated, placement or competitivebasis as determined by the System Representative in the Award Certificate. In determining whether to selleach Series of the Bonds by negotiated, placement or competitive sale, the System Representative shalltake into account the financial condition of the State, the System, and the Financing System, any materialdisclosure issues which might exist at the time, the market conditions expected at the time of the sale, theachievement of the HUB goals of the Board, and any other matters which, in the judgment of the SystemRepresentative, might affect the net borrowing costs on each Series of the Bonds.

If the System Representative determines that a Series of the Bonds should be sold at a competitivesale, the System Representative shall cause to be prepared a notice of sale and official statement in suchmanner as the System Representative deems appropriate, to make the notice of sale and official statementavailable to those institutions and firms wishing to submit a bid for the Bonds, to receive such bids, andto award the sale of the Bonds to the bidder submitting the best bid in accordance with the provisions ofthe notice of sale.

If the System Representative determines that a Series of the Bonds should be sold by a negotiatedsale or placement, the System Representative shall designate the placement purchaser or the seniormanaging underwriter for the Bonds and such additional investment banking firms as the SystemRepresentative deems appropriate to assure that the Bonds are sold on the most advantageous terms tothe Revenue Financing System. The System Representative, acting for and on behalf of the Board, isauthorized to enter into and carry out a Bond Purchase Contract or other agreement for the Bonds to besold by negotiated sale, with the Underwriter at such price, with and subject to such terms as determinedby the System Representative pursuant to Section 3(b) above. Each Bond Purchase Contract or otheragreement shall be substantially in the form and substance previously approved by the Board in connectionwith the authorization of Parity Debt with such changes as are acceptable to the System Representative,including those covered by Section 18 or Section 21.


(d) In General. Each Series of the Bonds (i) may and shall be redeemed prior to the respectivescheduled maturity dates, (ii) may be assigned and transferred, (iii) may be exchanged for other Bonds, (iv)shall have the characteristics, (v) shall be Tax-Exempt Bonds, Taxable Bonds or Build America Bondsand (vi) shall be signed and sealed, and the principal of and interest on the Bonds shall be payable, all asprovided, and in the manner required or indicated, in the FORM OF BOND set forth in Exhibit "B" to thisFourteenth Supplement and as determined by the System Representative as provided herein, with suchchanges and additions as are required to be consistent with the terms and provisions shown in the AwardCertificate.

Section 4. INTEREST. Each Series of the Bonds shall bear interest, calculated on the basis ofa 360-day year composed of twelve 30-day months, from their date, until maturity or redemption, at therates set forth in the Award Certificate. Each Series of Bonds shall be designated as Tax-Exempt Bonds,Taxable Bonds or Build America Bonds as set forth in the Award Certificate. Interest shall be payable tothe registered owner of any such Bond in the manner provided and on the dates stated in the FORM OFBOND set forth in this Fourteenth Supplement and the Award Certificate.

Section 5. REGISTRATION, TRANSFER, AND EXCHANGE; AUTHENTICATION;BOOK-ENTRY-ONLY SYSTEM. (a) Paying Agent/Registrar. The Bank of New York Mellon TrustCompany, National Association is hereby appointed the Paying Agent/Registrar for the Bonds. The SystemRepresentative is authorized to enter into and carry out a Paying Agent/Registrar Agreement with thePaying Agent/Registrar with respect to the Bonds in substantially the form previously approved inconnection with the authorization of Parity Debt with such changes as are acceptable to the SystemRepresnetative.

(b) Registration Books. The Board shall keep or cause to be kept at the designated corporate trustoffice of the Paying Agent/Registrar in Dallas, Texas (the "Designated Trust Office") books or records forthe registration of the transfer, exchange, and replacement of the Bonds (the "Registration Books"), andthe Board hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such booksor records and make such registrations of transfers, exchanges, and replacements under such reasonableregulations as the Board and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shallmake such registrations, transfers, exchanges, and replacements as herein provided. The PayingAgent/Registrar shall obtain and record in the Registration Books the address of the registered owner ofeach Bond to which payments with respect to the Bonds shall be mailed, as herein provided; but it shallbe the duty of each registered owner to notify the Paying Agent/Registrar in writing of the address towhich payments shall be mailed, and such interest payments shall not be mailed unless such notice has beengiven. The Board shall have the right to inspect the Registration Books at the Designated Trust Office ofthe Paying Agent/Registrar during regular business hours, but otherwise the Paying Agent/Registrar shallkeep the Registration Books confidential and, unless otherwise required by law, shall not permit theirinspection by any other entity. A copy of the Registration Books shall be maintained in the State of Texas.

(c) Ownership of Bonds. The entity in whose name any Bond shall be registered in theRegistration Books at any time shall be deemed and treated as the absolute owner thereof for all purposesof this Fourteenth Supplement, whether or not such Bond shall be overdue, and, to the extent permitted


by law, the Board and the Paying Agent/Registrar shall not be affected by any notice to the contrary; andpayment of, or on account of, the principal of, premium, if any, and interest on any such Bond shall bemade only to such registered owner. All such payments shall be valid and effectual to satisfy and dischargethe liability upon such Bond to the extent of the sum or sums so paid.

(d) Payment of Bonds and Interest. The Paying Agent/Registrar shall further act as the payingagent for paying the principal of, premium, if any, and interest on the Bonds, all as provided in thisFourteenth Supplement. The Paying Agent/ Registrar shall keep proper records of all payments made bythe Board and the Paying Agent/Registrar with respect to the Bonds.

(e) Authentication. The Bonds initially issued and delivered pursuant to this FourteenthSupplement shall be authenticated by the Paying Agent/Registrar by execution of the PayingAgent/Registrar's Authentication Certificate unless they have been approved by the Attorney General ofthe State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and on eachsubstitute Bond issued in exchange for any Bond or Bonds issued under this Fourteenth Supplement thePaying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATIONCERTIFICATE (the"Authentication Certificate"). The Authentication Certificate shall be in the form setforth in the FORM OF BOND.

(f) Transfer, Exchange, or Replacement. Each Bond issued and delivered pursuant to thisFourteenth Supplement, to the extent of the unpaid or unredeemed principal amount thereof, may, uponsurrender of such Bond at the Designated Trust Office of the Paying Agent/Registrar, together with awritten request therefor duly executed by the registered owner or the assignee or assignees thereof, or itsor their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to thePaying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, asappropriate, be exchanged for fully registered bonds, without interest coupons, in the appropriate formprescribed in the FORM OF BOND set forth in this Fourteenth Supplement, in any AuthorizedDenomination (subject to the requirement hereinafter stated that each substitute Bond shall be of the sameSeries and have a single stated maturity date), as requested in writing by such registered owner or suchassignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed principalamount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee,or assignees, as the case may be. If a portion of any Bond shall be redeemed prior to its scheduled maturityas provided herein, a substitute Bond or Bonds having the same Series designation and maturity date,bearing interest at the same rate, and payable in the same manner, in Authorized Denominations at therequest of the registered owner, and in aggregate principal amount equal to the unredeemed portionthereof, will be issued to the registered owner upon surrender thereof for cancellation. If any Bond orportion thereof is assigned and transferred, each Bond issued in exchange therefor shall have the sameSeries designation and maturity date and bear interest at the same rate and payable in the same manner asthe Bond for which it is being exchanged. Each substitute Bond shall bear a letter and/or number todistinguish it from each other Bond. The Paying Agent/Registrar shall exchange or replace Bonds asprovided herein, and each fully registered bond delivered in exchange for or replacement of any Bond orportion thereof as permitted or required by any provision of this Fourteenth Supplement shall constituteone of the Bonds for all purposes of this Fourteenth Supplement, and may again be exchanged or replaced.On each substitute Bond issued in exchange for or replacement of any Bond or Bonds issued under this


Fourteenth Supplement there shall be printed an Authentication Certificate, in the form set forth in Exhibit"B" to this Fourteenth Supplement. An authorized representative of the Paying Agent/Registrar shall,before the delivery of any such Bond, date and manually sign the Authentication Certificate, and, exceptas provided in (e) above, no such Bond shall be deemed to be issued or outstanding unless theAuthentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Bondssurrendered for transfer, exchange, or replacement. No additional orders or resolutions need be passed oradopted by the Board or any other body or person so as to accomplish the foregoing transfer, exchange,or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for theprinting, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bondsshall be in typed or printed form as determined by the System Representative. Pursuant to Subtitle D,Texas Government Code and particularly Section 1201.063, thereof, the duty of transfer, exchange, orreplacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon theexecution of the Authentication Certificate, the exchanged or replaced Bond shall be valid, incontestable,and enforceable in the same manner and with the same effect as the Bonds which were originally issuedpursuant to this Fourteenth Supplement. The Board shall pay the Paying Agent/Registrar's standard orcustomary fees and charges, if any, for transferring, and exchanging any Bond or any portion thereof, butthe one requesting any such transfer and exchange shall pay any taxes or governmental charges requiredto be paid with respect thereto as a condition precedent to the exercise of such privilege. The PayingAgent/Registrar shall not be required to make any such transfer, exchange, or replacement of Bonds or anyportion thereof (i) during the period commencing with the close of business on any Record Date andending with the opening of business on the next following interest payment date, or (ii) with respect to anyBond or portion thereof called for redemption prior to maturity, within 45 days prior to its redemptiondate. To the extent possible, any new Bond issued in an exchange, replacement, or transfer of a Bond willbe delivered to the registered owner or assignee of the registered owner not more than three business daysafter the receipt of the Bonds to be canceled and the written request as described above.

(g) Substitute Paying Agent/Registrar. The Board covenants with the registered owners of theBonds that at all times while the Bonds are outstanding the Board will provide a competent and legallyqualified bank, trust company, financial institution, or other agency to act as and perform the services ofPaying Agent/Registrar for the Bonds under this Fourteenth Supplement, and that the PayingAgent/Registrar will be one entity. The Board reserves the right to, and may, at its option, change thePaying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to beeffective not later than 60 days prior to the next principal or interest payment date after such notice. In theevent that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition,or other method) should resign or otherwise cease to act as such, the Board covenants that promptly it willappoint a competent and legally qualified bank, trust company, financial institution, or other agency to actas Paying Agent/Registrar under this Fourteenth Supplement. Upon any change in the PayingAgent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the RegistrationBooks (or a copy thereof), along with all other pertinent books and records relating to the Bonds, to thenew Paying Agent/Registrar designated and appointed by the Board. Upon any change in the PayingAgent/Registrar, the Board promptly will cause a written notice thereof to be sent by the new PayingAgent/Registrar to each registered owner of the Bonds, by United States mail, first-class postage prepaid,which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position andperforming as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this


Fourteenth Supplement, and a certified copy of this Fourteenth Supplement shall be delivered to eachPaying Agent/Registrar.

(h) Book-Entry-Only System. The Bonds issued in exchange for the Bonds initially issued anddelivered to the underwriter shall be issued in the form of a separate single fully registered Bond per Seriesfor each of the maturities thereof registered in the name of Cede & Co., as nominee of The DepositoryTrust Company, New York, New York ("DTC"), and except as provided in subsection(i) hereof, all of theOutstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. With respect toBonds registered in the name of Cede & Co., as nominee of DTC, the Board and the PayingAgent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person onbehalf of whom such a DTC Participant holds an interest on the Bonds. Without limiting the immediatelypreceding sentence, the Board and the Paying Agent/Registrar shall have no responsibility or obligationwith respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respectto any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, otherthan a Bondholder, as shown on the Registration Books, of any notice with respect to the Bonds, includingany notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than aBondholder, as shown in the Registration Books of any amount with respect to principal of, premium, ifany, or interest on the Bonds. Notwithstanding any other provision of this Fourteenth Supplement to thecontrary but to the extent permitted by law, the Board and the Paying Agent/Registrar shall be entitled totreat and consider the person in whose name each Bond is registered in the Registration Books as theabsolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest, withrespect to such Bond, for the purpose of giving notices of redemption and other matters with respect tosuch Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposeswhatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on theBonds only to or upon the order of the respective owners, as shown in the Registration Books as providedin this Fourteenth Supplement, or their respective attorneys duly authorized in writing, and all suchpayments shall be valid and effective to fully satisfy and discharge the Board's obligations with respect topayment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums sopaid. No person other than an owner, as shown in the Registration Books, shall receive a Bond certificateevidencing the obligation of the Board to make payments of principal, premium, if any, and interestpursuant to this Fourteenth Supplement. Upon delivery by DTC to the Paying Agent/Registrar of writtennotice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., andsubject to the provisions in this Fourteenth Supplement with respect to interest checks being mailed to theregistered owner at the close of business on the Record Date, the word "Cede & Co." in this FourteenthSupplement shall refer to such new nominee of DTC.

(i) Successor Securities Depository; Transfers Outside Book-Entry-Only System. In the eventthat the Board or the Paying Agent/Registrar determines that DTC is incapable of discharging itsresponsibilities described herein and in the representation letter of the Board to DTC (as described inSection 23 of this Fourteenth Supplement) or DTC determines to discontinue providing its services withrespect to the Bonds, the Board shall (i) appoint a successor securities depository, qualified to act as suchunder Section 17A of the Securities and Exchange Act of 1934, as amended, notify DTC and DTCParticipants of the appointment of such successor securities depository and transfer one or more separateBonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability


through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bondscredited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registeredin the Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in thename of the successor securities depository, or its nominee, or in whatever name or names Bondholderstransferring or exchanging Bonds shall designate, in accordance with the provisions of this FourteenthSupplement.

(j) Payments to Cede & Co. Notwithstanding any other provision of this Fourteenth Supplementto the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, allpayments with respect to principal of, premium, if any, and interest on such Bond and all notices withrespect to such Bond shall be made and given, respectively, in the manner provided in the representationletter of the Board to DTC.

(k) Notice of Redemption. In addition to the method of providing a notice of redemption set forthin the FORM OF BOND, the Paying Agent/Registrar shall give notice of redemption of Bonds by mail,first-class postage prepaid at least thirty (30) days prior to a redemption date to each registered securitiesdepository and to any national information service that disseminates redemption notices. In addition, in theevent of a redemption caused by an advance refunding of the Bonds, the Paying Agent/Registrar shall senda second notice of redemption to the persons specified in the immediately preceding sentence at least thirty(30) days but not more than ninety (90) days prior to the actual redemption date. Any notice sent to theregistered securities depositories or such national information services shall be sent so that they arereceived at least two (2) days prior to the general mailing or publication date of such notice. The PayingAgent/Registrar shall also send a notice of prepayment or redemption to the registered owner of any Bondwho has not sent the Bonds in for redemption sixty (60)days after the redemption date. Each notice ofredemption, whether required in the FORM OF BOND or in this Section, shall contain a description ofthe Bonds to be redeemed including the complete name of the Bonds, the Series, the date of issue, theinterest rate, the maturity date, the CUSIP number, a reference to the certificate numbers and the amountscalled of each certificate, the publication and mailing date for the notice, the date of redemption, theredemption price, the name of the Paying Agent/Registrar and the address at which the Bonds may beredeemed, including a contact person and telephone number. All redemption payments made by the PayingAgent/Registrar to the registered owners of the Bonds shall include a CUSIP number relating to eachamount paid to such registered owner.

Section 6. FORM OF BOND. The form of the Bonds, including the form of the AuthenticationCertificate, the form of Assignment and the form of Registration Certificate of the Comptroller of PublicAccounts of the State of Texas, with respect to the Bonds initially issued and delivered pursuant to thisFourteenth Supplement, shall be, respectively, substantially as set forth in Exhibit "B",with suchappropriate variations, omissions, or insertions as are permitted or required by this Fourteenth Supplementand any Award Certificate including specifically information relating to payment dates, the Bond date,redemption provisions and the information to be included in the purpose clause.

Section 7. ESTABLISHMENT OF FINANCING SYSTEM AND ISSUANCE OF PARITYDEBT. By adoption of the Master Resolution, the Board has established the Texas State UniversitySystem Revenue Financing System for the purpose of providing a financing structure for revenue


supported indebtedness of components of the Texas State University System which are from time to timeincluded as Members of the Financing System. The Master Resolution is intended to establish a master planunder which revenue supported debt of the Financing System can be incurred. This Fourteenth Supplementprovides for the authorization, issuance, sale, delivery, form, characteristics, provisions of payment andredemption, and security of the Bonds as Parity Debt. The Master Resolution is incorporated herein byreference and as such made a part hereof for all purposes, except to the extent modified and supplementedhereby, and the Bonds are hereby declared to be Parity Debt under the Master Resolution. As required bySection 5(a) of the Master Resolution, the Board hereby determines that upon the issuance of the Bondsit will have sufficient funds to meet the financial obligations of the Texas State University System, includingsufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the Financing System andto meet all financial obligations of the Board relating to the Financing System and that the Members onwhose behalf the Bonds are to be issued possess the financial capacity to satisfy their Direct Obligationsafter taking the Bonds into account.

Section 8. SECURITY, PAYMENTS AND PERFECTION. The Bonds are special obligationsof the Board payable from and secured solely by the Pledged Revenues pursuant to the Master Resolutionand this Fourteenth Supplement. The Pledged Revenues are hereby pledged, subject to the liens securingthe Prior Encumbered Obligations, to the payment of the principal of, premium, if any, and interest on theBonds as the same shall become due and payable. The Board agrees to pay the principal of, premium, ifany, and the interest on the Bonds when due, whether by reason of maturity or redemption.

Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of thePledged Revenues granted by the Board under this Section of this Fourteenth Supplement, and such pledgeis therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds areoutstanding and unpaid such that the pledge of Pledged Revenues granted by the Board under this Sectionof this Fourteenth Supplement is to be subject to the filing requirements of Chapter 9, Business &Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of thesecurity interest in said pledge, the Board agrees to take such measures as it determines are reasonable andnecessary under Texas law to comply with the applicable provisions of Chapter 9, Business & CommerceCode and enable a filing to perfect the security interest in said pledge to occur.

Section 9. PAYMENTS. (a) Immediately after the delivery of the Bonds, the Board shall depositany accrued interest received from the sale and delivery of the Bonds to the credit of a special account tobe held to pay interest on such Bonds on the first interest payment date.

(b) Semiannually on or before each principal or interest payment date while any of the Bonds areoutstanding and unpaid, commencing on the first interest payment date for the Bonds as provided therein,the Board shall make available to the Paying Agent/Registrar, money sufficient to pay such interest on andsuch principal of the Bonds as will accrue or mature, or be subject to mandatory redemption prior tomaturity, on such principal, redemption, or interest payment date. The Paying Agent/Registrar shall cancelall paid Bonds and shall furnish the Board with an appropriate certificate of cancellation.


Section 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, ordestroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond ofthe same Series, principal amount, maturity, and interest rate, and in the same form, as the damaged,mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafterprovided.

(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost,stolen, or destroyed Bonds shall be made to the Paying Agent/Registrar. In every case of loss, theft, ordestruction of a Bond, the applicant for a replacement bond shall furnish to the Board and to the PayingAgent/Registrar such security or indemnity as may be required by them to save each of them harmless fromany loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, theapplicant shall furnish to the Board and to the Paying Agent/Registrar evidence to their satisfaction of theloss, theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of aBond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Bond so damagedor mutilated.

(c) Payment in Lieu of Replacement. Notwithstanding the foregoing provisions of this Section,in the event any such Bond shall have matured, and no default has occurred which is then continuing in thepayment of the principal of, redemption premium, if any, or interest on the Bond, the Board may authorizethe payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond)instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided inthis Section.

(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond, thePaying Agent/Registrar shall charge the owner of such Bond with all legal, printing, and other expensesin connection therewith including any security or indemnity as may be required by the Board. Everyreplacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond islost, stolen, or destroyed shall constitute a contractual obligation of the Board whether or not the lost,stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled toall the benefits of this Fourteenth Supplement equally and proportionately with any and all other Bondsduly issued under this Fourteenth Supplement.

(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter D of Chapter1201, Texas Government Code, this Section shall constitute authority for the issuance of any suchreplacement bond without the necessity of further action by the Board or any other body or person, andthe duty of the replacement of such Bonds is hereby authorized and imposed upon the PayingAgent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form andmanner and with the effect, as provided in Section 5(f) of this Fourteenth Supplement for Bonds issuedin exchange and replacement for other Bonds.


Section 11. AMENDMENT OF SUPPLEMENT. (a) Amendments Without Consent. ThisFourteenth Supplement and the rights and obligations of the Board and of the owners of the Bonds maybe modified or amended at any time without notice to or the consent of any owner of the Bonds or anyother Parity Debt, solely for any one or more of the following purposes:

(i) To add to the covenants and agreements of the Board contained in this FourteenthSupplement, other covenants and agreements thereafter to be observed, or to surrender any rightor power reserved to or conferred upon the Board in this Fourteenth Supplement;

(ii) To cure any ambiguity or inconsistency, or to cure or correct any defective provisionscontained in this Fourteenth Supplement, upon receipt by the Board of an Opinion of Counsel, thatthe same is needed for such purpose, and will more clearly express the intent of this FourteenthSupplement;

(iii) To supplement the security for the Bonds, replace or provide additional creditfacilities, or change the form of the Bonds or make such other changes in the provisions hereof asthe Board may deem necessary or desirable and which shall not, in the judgment of the Board,materially adversely affect the interests of the owners of the Outstanding Bonds;

(iv) To make any changes or amendments requested by any bond rating agency then ratingor requested to rate the Bonds, as a condition to the issuance or maintenance of a rating, whichchanges or amendments do not, in the judgment of the Board, materially adversely affect theinterests of the owners of the Outstanding Bonds;

(v) To make such changes, modifications or amendments as are permitted by Section 18(c) (v) of this Fourteenth Supplement; or

(vi) To make such other changes in the provisions hereof as the Board may deemnecessary or desirable and which shall not, in the judgment of the Board, materially adverselyaffect the interests of the owners of the Outstanding Bonds.

(b) Amendments With Consent. Subject to the other provisions of this Fourteenth Supplement,the owners of Outstanding Bonds aggregating 51% in Outstanding Principal Amount shall have the rightfrom time to time to approve any amendment, other than amendments described in Subsection (a) of thisSection, to this Fourteenth Supplement which may be deemed necessary or desirable by the Board;provided, however, that nothing herein contained shall permit or be construed to permit, without theapproval of the owners of all of the Outstanding Bonds, the amendment of the terms and conditions in thisFourteenth Supplement or in the Bonds so as to:

(1) Make any change in the maturity of the Outstanding Bonds;

(2) Reduce the rate of interest borne by the Outstanding Bonds;

(3) Reduce the amount of the principal payable on the Outstanding Bonds;


(4) Modify the terms of payment of principal of or interest on the Outstanding Bonds, orimpose any conditions with respect to such payment;

(5) Affect the rights of the owners of less than all Bonds then Outstanding; or

(6) Change the minimum percentage of the Outstanding Principal Amount of Bondsnecessary for consent to such amendment.

(c) Notice. (i) If at any time the Board shall desire to amend this Fourteenth Supplement other thanpursuant to (a) above, the Board shall cause notice of the proposed amendment to be published in afinancial newspaper or journal of general circulation in The City of New York, New York once duringeach calendar week for at least two successive calendar weeks. Such notice shall briefly set forth the natureof the proposed amendment and shall state that a copy thereof is on file at the principal office of theRegistrar for inspection by all owners of Bonds. Such publication is not required, however, if the Boardgives or causes to be given such notice in writing to each owner of Bonds.

(ii) Copies of any modification or amendment to the Master Resolution or this FourteenthSupplement shall be sent to Standard & Poor's Ratings Services and Moody's Investors Service, Inc. atleast 10 days prior to the effective date thereof.

(d) Receipt of Consents. Whenever at any time not less than thirty days, and within one year, fromthe date of the first publication of said notice or other service of written notice of the proposed amendmentthe Board shall receive an instrument or instruments executed by all of the owners or the owners of at least51% in Outstanding Principal Amount of Bonds, as appropriate, which instrument or instruments shallrefer to the proposed amendment described in said notice and which specifically consent to and approvesuch amendment in substantially the form of the copy thereof on file as aforesaid, the Board may adopt theamendatory resolution in substantially the same form.

(e) Effect of Amendments. Upon the adoption by the Board of any resolution to amend thisFourteenth Supplement pursuant to the provisions of this Section, this Fourteenth Supplement shall bedeemed to be amended in accordance with the amendatory resolution, and the respective rights, duties, andobligations of the Board and all the owners of then Outstanding Bonds and all future Bonds shall thereafterbe determined, exercised, and enforced under the resolution and this Fourteenth Supplement, as amended.

(f) Consent Irrevocable. Any consent given by any owner of Bonds pursuant to the provisions ofthis Section shall be irrevocable for a period of six months from the date of the first publication or otherservice of the notice provided for in this Section, and shall be conclusive and binding upon all futureowners of the same Bonds during such period. Such consent may be revoked at any time after six monthsfrom the date of the first publication of such notice by the owner who gave such consent, or by a successorin title, by filing notice thereof with the Registrar and the Board, but such revocation shall not be effectiveif the owners of 51% in Outstanding Principal Amount of Bonds, prior to the attempted revocation,consented to and approved the amendment.


(g) Ownership. For the purpose of this Section, the ownership and other matters relating to allBonds registered as to ownership shall be determined from the Registration Books kept by the Registrartherefor. The Registrar may conclusively assume that such ownership continues until written notice to thecontrary is served upon the Registrar.

(h) Insurer Consent. Notwithstanding the foregoing provisions of this Section, so long as anyInsurer is not in default under its policy, no amendment or supplement to the Master Resolution or thisFourteenth Supplement may become effective except upon obtaining the prior written consent of any suchInsurer, other than a supplement for the issuance of additional debt in accordance with the MasterResolution for which no prior written consent of the Insurer is necessary.

Section 12. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON THETAX-EXEMPT BONDS. (a) Covenants. The Board covenants to take any action necessary toassure, or refrain from any action which would adversely affect, the treatment of the Tax-Exempt Bondsas obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the "IRSCode"), the interest on which is not includable in the "gross income" of the holder for purposes of federalincome taxation. In furtherance thereof, the Board covenants as follows:

(1) to take any action to assure that no more than 10 percent of the proceeds of the Tax-Exempt Bonds or the projects financed or refinanced therewith (less amounts deposited to areserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of theIRS Code or, if more than 10 percent of the proceeds of the Tax-Exempt Bonds or the projectsfinanced or refinanced therewith are so used, such amounts, whether or not received by the Board,with respect to such private business use, do not, under the terms of this Fourteenth Supplementor any underlying arrangement, directly or indirectly, secure or provide for the payment of morethan 10 percent of the debt service on the Tax-Exempt Bonds, in contravention of section141(b)(2) of the IRS Code;

(2) to take any action to assure that in the event that the "private business use" describedin subsection (1) hereof exceeds 5 percent of the proceeds of the Tax-Exempt Bonds or theprojects financed or refinanced therewith (less amounts deposited into a reserve fund, if any) thenthe amount in excess of 5 percent is used for a "private business use" which is "related" and not"disproportionate," within the meaning of section 141(b)(3) of the IRS Code, to the governmentaluse;

(3) to take any action to assure that no amount which is greater than the lesser of$5,000,000, or 5 percent of the proceeds of the Tax-Exempt Bonds (less amounts deposited intoa reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state orlocal governmental units, in contravention of section 141(c) of the IRS Code;

(4) to refrain from taking any action which would otherwise result in the Tax-ExemptBonds being treated as "private activity bonds" within the meaning of section 141(b) of the IRSCode;


(5) to refrain from taking any action that would result in the Tax-Exempt Bonds being"federally guaranteed" within the meaning of section 149(b) of the IRS Code;

(6) to refrain from using any portion of the proceeds of the Tax-Exempt Bonds, directlyor indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquireinvestment property (as defined in section 148(b)(2) of the IRS Code) which produces a materiallyhigher yield over the term of the Tax-Exempt Bonds, other than investment property acquiredwith:

(A) proceeds of the Tax-Exempt Bonds invested for a reasonable temporaryperiod of 3 years or less or, in the case of a refunding bond, for a period of 30 days or lessuntil such proceeds are needed for the purpose for which the Tax-Exempt Bonds areissued,

(B) amounts invested in a bona fide debt service fund, within the meaning ofsection l.148-1(b) of the Treasury Regulations, and

(C) amounts deposited in any reasonably required reserve or replacement fund tothe extent such amounts do not exceed 10 percent of the proceeds of the Tax-ExemptBonds;

(7) to otherwise restrict the use of the proceeds of the Tax-Exempt Bonds or amountstreated as proceeds of the Tax-Exempt Bonds, as may be necessary, so that the Tax-ExemptBonds do not otherwise contravene the requirements of section 148 of the IRS Code (relating toarbitrage) and, to the extent applicable, section 149(d) of the IRS Code (relating to advancerefundings); and

(8) to pay to the United States of America at least once during each five-year period(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent ofthe "Excess Earnings," within the meaning of section 148(f) of the IRS Code and to pay to theUnited States of America, not later than 60 days after the Tax-Exempt Bonds have been paid infull, 100 percent of the amount then required to be paid as a result of Excess Earnings undersection 148(f) of the IRS Code; and

(9) to assure that the proceeds of the Bonds will be used solely for new money projects.

(b) Rebate Fund. With respect to the Tax-Exempt Bonds, in order to facilitate compliance withthe above covenant (8), a "Rebate Fund" is hereby established by the Board for the sole benefit of theUnited States of America, and such fund shall not be subject to the claim of any other person, includingwithout limitation the bondholders. The Rebate Fund is established for the additional purpose ofcompliance with section 148 of the IRS Code.


(c) Proceeds. With respect to the Tax-Exempt Bonds, the Board understands that the term"proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case ofrefunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to thedate of issuance of the Tax-Exempt Bonds. It is the understanding of the Board that the covenantscontained herein are intended to assure compliance with the IRS Code and any regulations or rulingspromulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations orrulings are hereafter promulgated which modify or expand provisions of the IRS Code, as applicable tothe Tax-Exempt Bonds, the Board will not be required to comply with any covenant contained herein tothe extent that such failure to comply, in the opinion of nationally recognized bond counsel, will notadversely affect the exemption from federal income taxation of interest on the Tax-Exempt Bonds undersection 103 of the IRS Code. In the event that regulations or rulings are hereafter promulgated whichimpose additional requirements which are applicable to the Tax-Exempt Bonds, the Board agrees tocomply with the additional requirements to the extent necessary, in the opinion of nationally recognizedbond counsel, to preserve the exemption from federal income taxation of interest on the Tax-ExemptBonds under section 103 of the IRS Code. In furtherance of such intention, the Board hereby authorizesand directs the System Representative to execute any documents, certificates or reports required by theIRS Code and to make such elections, on behalf of the Board, which may be permitted by the IRS Codeas are consistent with the purpose for the issuance of the Tax-Exempt Bonds.

(d) Allocation Of, and Limitation On, Expenditures for the Project. If the Bonds are issuedas Tax-Exempt Bonds, the Board covenants to account for the expenditure of sale proceeds andinvestment earnings to be used for the purposes described in Section 2 of this Fourteenth Supplement (the"Project") on its books and records in accordance with the requirements of the IRS Code. The Boardrecognizes that in order for the proceeds to be considered used for the reimbursement of costs, theproceeds must be allocated to expenditures within 18 months of the later of the date that (1) theexpenditure is made, or (2) the Project is completed; but in no event later than three years after the dateon which the original expenditure is paid. The foregoing notwithstanding, the Board recognizes that inorder for proceeds to be expended under the IRS Code, the sale proceeds or investment earnings must beexpended no more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Tax-Exempt Bonds, or (2) the date the Tax-Exempt Bonds are retired. The Board agrees to obtain the adviceof nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure thatsuch expenditure will not adversely affect the tax-exempt status of the Tax-Exempt Bonds. For purposesof this subsection, the Board shall not be obligated to comply with this covenant if it obtains an opinionof nationally-recognized bond counsel to the effect that such failure to comply will not adversely affect theexcludability for federal income tax purposes from gross income of the interest.

(e) Disposition of Project. If the Bonds are issued as Tax-Exempt Bonds, the Board covenantsthat the property constituting the Project or the projects financed by any Refunded Bonds will not be soldor otherwise disposed in a transaction resulting in the receipt by the Board of cash or other compensation,unless the Board obtains an opinion of nationally-recognized bond counsel that such sale or otherdisposition will not adversely affect the tax-exempt status of the Tax-Exempt Bonds. For purposes of thissubsection, the portion of the property comprising personal property and disposed of in the ordinary courseshall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposesof this subsection, the Board shall not be obligated to comply with this covenant if it obtains an opinion


of nationally-recognized bond counsel to the effect that such failure to comply will not adversely affect theexcludability for federal income tax purposes from gross income of the interest.

Section 13. FOURTEENTH SUPPLEMENT TO CONSTITUTE A CONTRACT; EQUALSECURITY. In consideration of the acceptance of the Bonds, the issuance of which is authorizedhereunder, by those who shall hold the same from time to time, this Fourteenth Supplement shall bedeemed to be and shall constitute a contract between the Board and the Holders from time to time of theBonds and the pledge made in this Fourteenth Supplement by the Board and the covenants and agreementsset forth in this Fourteenth Supplement to be performed by the Board shall be for the equal andproportionate benefit, security, and protection of all Holders, without preference, priority, or distinctionas to security or otherwise of any of the Bonds authorized hereunder over any of the others by reason oftime of issuance, sale, or maturity thereof or otherwise for any cause whatsoever, except as expresslyprovided in or permitted by this Fourteenth Supplement.

Section 14. SEVERABILITY OF INVALID PROVISIONS. If any one or more of thecovenants, agreements, or provisions herein contained shall be held contrary to any express provisions oflaw or contrary to the policy of express law, though not expressly prohibited, or against public policy, orshall for any reason whatsoever be held invalid, then such covenants, agreements, or provisions shall benull and void and shall be deemed separable from the remaining covenants, agreements, or provisions andshall in no way affect the validity of any of the other provisions hereof or of the Bonds issued hereunder.

Section 15. PAYMENT AND PERFORMANCE ON BUSINESS DAYS. Except as providedto the contrary in the FORM OF BOND, whenever under the terms of this Fourteenth Supplement or theBonds, the performance date of any provision hereof or thereof, including the payment of principal of orinterest on the Bonds, shall occur on a day other than a Business Day, then the performance thereof,including the payment of principal of and interest on the Bonds, need not be made on such day but maybe performed or paid, as the case may be, on the next succeeding Business Day with the same force andeffect as if made on the date of performance or payment.

Section 16. LIMITATION OF BENEFITS WITH RESPECT TO THE FOURTEENTHSUPPLEMENT. With the exception of the rights or benefits herein expressly conferred, nothingexpressed or contained herein or implied from the provisions of this Fourteenth Supplement or the Bondsis intended or should be construed to confer upon or give to any person other than the Board, the Holders,and the Paying Agent/Registrar, any legal or equitable right, remedy, or claim under or by reason of or inrespect to this Fourteenth Supplement or any covenant, condition, stipulation, promise, agreement, orprovision herein contained. This Fourteenth Supplement and all of the covenants, conditions, stipulations,promises, agreements, and provisions hereof are intended to be and shall be for and inure to the sole andexclusive benefit of the Board, the Holders, and the Paying Agent/Registrar as herein and therein provided.

Section 17. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIPNUMBERS, PREAMBLE AND INSURANCE. The System Representative is hereby authorized tohave control of the Bonds issued hereunder and all necessary records and proceedings pertaining to theBonds pending their delivery and approval by the Attorney General of the State of Texas. The System


Representative is hereby authorized, to the extent deemed necessary or advisable thereby, in the discretionthereof, to request that the Attorney General approve the Bonds as permitted by Chapter 1202, TexasGovernment Code, in which case the System Representative also is authorized to request the Comptrollerof Public Accounts register the Bonds, and to cause an appropriate legend reflecting such approval andregistration to appear on the Bonds and the substitute Bonds. The approving legal opinion of the Board'sBond Counsel and the assigned CUSIP numbers may, at the option of the Board, be printed on the Bondsand on any Bonds issued and delivered in exchange or replacement of any Bond, but neither shall have anylegal effect, and shall be solely for the convenience and information of the registered owners of the Bonds.The preamble to this Fourteenth Supplement is hereby adopted and made a part of this FourteenthSupplement for all purposes. If insurance is obtained on any of the Bonds, the Bonds shall bear, asappropriate and applicable, a legend concerning insurance as provided by the municipal bond insurancecompany issuing any such insurance.

Section 18. COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports. (i) The Board shallprovide annually to the MSRB, in an electronic format as prescribed by the MSRB, within six months afterthe end of any fiscal year, financial information and operating data with respect to the Board of the generaltype included in the final Official Statement authorized by Section 21 of this Resolution, being theinformation described in Exhibit "C" hereto. Any financial statements to be so provided shall be(1) prepared in accordance with the accounting principles described in Exhibit "C" hereto, or such otheraccounting principles as the Board may be required to employ from time to time pursuant to state law orregulation, and (2) audited, if the Board commissions an audit of such statements and the audit iscompleted within the period during which they must be provided. If the audit of such financial statementsis not complete within such period, then the Board shall provide unaudited financial statements within suchperiod, and audited financial statements for the applicable fiscal year to the MSRB, when and if the auditreport on such statements become available.

(ii) If the Board changes its fiscal year, it will notify the MSRB of the change (and of the date ofthe new fiscal year end) prior to the next date by which the Board otherwise would be required to providefinancial information and operating data pursuant to this Section. The financial information and operatingdata to be provided pursuant to this Section may be set forth in full in one or more documents or may beincluded by specific reference to any document that is available to the public on the MSRB's internet website or filed with the SEC. All documents provided to the MSRB pursuant to this Section shall beaccompanied by identifying information as prescribed by the MSRB.

(b) Material Event Notices. The Board shall notify the MSRB, in an electronic format asprescribed by the MSRB, in a timely manner, of any of the following events with respect to the Bonds, ifsuch event is material within the meaning of the federal securities laws:

A. Principal and interest payment delinquencies;

B. Non-payment related defaults;

C. Unscheduled draws on debt service reserves reflecting financial difficulties;


D. Unscheduled draws on credit enhancements reflecting financial difficulties;

E. Substitution of credit or liquidity providers, or their failure to perform;

F. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;

G. Modifications to rights of holders of the Bonds;

H. Certificate calls;

I. Defeasances;

J. Release, substitution, or sale of property securing repayment of the Bonds; and

K. Rating changes.

The Board shall notify the MSRB, in an electronic format as prescribed by the MSRB, in a timelymanner, of any failure by the Board to provide financial information or operating data in accordance withsubsection (a) of this Section by the time required by such subsection. All documents provided to theMSRB pursuant to this Section shall be accompanied by identifying information as prescribed by theMSRB.

(c) Limitations, Disclaimers, and Amendments. (i) The Board shall be obligated to observe andperform the covenants specified in this Section for so long as, but only for so long as, the Board remainsan "obligated person" with respect to the Bonds within the meaning of the Rule, except that the Board inany event will give notice of any deposit made in accordance with Section 12 of the Master Resolution thatcauses the Bonds no longer to be outstanding.

(ii) The provisions of this Section are for the sole benefit of the holders and beneficial owners ofthe Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitableright, remedy, or claim hereunder to any other person. The Board undertakes to provide only the financialinformation, operating data, financial statements, and notices which it has expressly agreed to providepursuant to this Section and does not hereby undertake to provide any other information that may berelevant or material to a complete presentation of the City's financial results, condition, or prospects orhereby undertake to update any information provided in accordance with this Section or otherwise, exceptas expressly provided herein. The Board does not make any representation or warranty concerning suchinformation or its usefulness to a decision to invest in or sell Board at any future date.

(iii) UNDER NO CIRCUMSTANCES SHALL THE BOARD BE LIABLE TO THE HOLDEROR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACTOR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BYTHE BOARD, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANYCOVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY


SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACHSHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.

(iv) No default by the Board in observing or performing its obligations under this Section shallcomprise a breach of or default under this Resolution for purposes of any other provision of thisResolution.

(v) Should the Rule be amended to obligate the District to make filings with or provide noticesto entities other than the MSRB, the Board hereby agrees to undertake such obligation with respect to theBoard in accordance with the Rule as amended.

(vi) Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the dutiesof the Board under federal and state securities laws.

(vii) The provisions of this Section may be amended by the Board from time to time to adapt tochanged circumstances that arise from a change in legal requirements, a change in law, or a change in theidentity, nature, status, or type of operations of the Board, but only if (1) the provisions of this Section,as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering ofthe Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rulesince such offering as well as such changed circumstances and (2) either (a) the holders of a majority inaggregate principal amount (or any greater amount required by any other provision of this Resolution thatauthorizes such an amendment) of the outstanding Bonds consents to such amendment or (b) a person thatis unaffiliated with the Board (such as nationally recognized bond counsel) determines that suchamendment will not materially impair the interest of the holders and beneficial owners of the Bonds. If theBoard so amends the provisions of this Section, it shall include with any amended financial information oroperating data next provided in accordance with paragraph (a) of this Section an explanation, in narrativeform, of the reason for the amendment and of the impact of any change in the type of financial informationor operating data so provided. The Board may also amend or repeal the provisions of this continuingdisclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of finaljurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent thatthe provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bondsin the primary offering of the Bonds.

Section 19. APPLICATION OF BOND PROCEEDS. (a) Proceeds from the sale of eachSeries of the Bonds shall, promptly upon receipt thereof, be applied by the System Representative asfollows:

(i) accrued interest, if any, for each Series of the Bonds shall be deposited as provided inSection 9;

(ii) an amount sufficient to accomplish the purposes of Section 2 shall be so applied; and(iii) any proceeds from the sale of each Series of the Bonds remaining after the deposits

provided for in clauses (i) and (ii) above, shall be applied to pay expenses arising inconnection with the issuance of the Bonds.


Any sale proceeds of each Series of the Bonds remaining after making all deposits and paymentsprovided for above shall be applied to the payment of interest on the Bonds.

(b) Additional projects may be added to the list of projects included in the Award Certificatepursuant to Section 3(b) and the amount of the proceeds of a Series of Bonds allocated to each projectmay be reallocated to other projects in the list, and therefore be financed or refinanced with the proceedsof the Bonds upon satisfaction of the following conditions:

(i) the project has received the required approval or review of the Higher EducationCoordinating Board to the extent and as required by the provisions of Section 61.058 of the TexasEducation Code;

(ii) the Board shall have approved the construction of the project and made thefindings required by Section 5 of the Master Resolution relating to the issuance of Parity Debt tofinance the cost of the project;

(iii) the Board shall have received an opinion of nationally-recognized bond counselwith respect to the Revenue Financing System, to the effect that the amendment of the exhibit, orthe financing or refinancing of the project, and the expenditure of the proceeds of the Bonds to paythe cost of project will not adversely affect the treatment of interest on the Bonds for federalincome tax purposes; and

(iv) the System Representative shall execute and deliver a certificate to the Boardcertifying (a) that the requirements of subsection (b)(i), (ii), and (iii) of this Section have beensatisfied and having attached to such certificate copies of the documents referred to in thosesubsections and (b) that, to the extent that the list of projects set forth in the Award Certificate orthe allocation of proceeds set forth in the Award Certificate to finance or refinance improvementsand facilities pursuant to Section 55.17 Authorization have been changed, the Board is incompliance with the requirements and limitations of such applicable Sections of the EducationCode. A copy of the certificate shall be filed in the minutes of the Board with the AwardCertificate.

Section 20. ADDITIONAL DEFEASANCE PROVISIONS. (a) In addition to the defeasanceprovisions set forth in Section 12 of the Master Resolution, it is hereby provided that, to the extent thatthe Bonds are treated as Defeased Debt for purposes of Section 12 of the Master Resolution, anydetermination not to redeem Defeased Debt that is made in conjunction with the payment arrangementsspecified in Section 12(a)(i) or (ii) of the Master Resolution shall not be irrevocable, provided that: (1) inthe proceedings providing for such defeasance, the Board expressly reserves the right to call the DefeasedBonds for redemption; (2) gives notice of the reservation of that right to the owners of the Defeased Bondsimmediately following the defeasance; (3) directs that notice of the reservation be included in anydefeasance notices that it authorizes; and (4) at or prior to the time of the redemption, satisfies theconditions of subsection (a) of Section 12 of the Master Resolution with respect to such Defeased Debtas though it was being defeased at the time of the exercise of the option to redeem the Defeased Debt, aftertaking the redemption into account in determining the sufficiency of the provisions made for the paymentof the Defeased Debt.


(b) Notwithstanding the provisions of Section 12(c) of the Master Resolution, in connection withthe defeasance of the Bonds pursuant to Section 12 of the Master Resolution, the term GovernmentObligations shall mean (i) direct, noncallable obligations of the United States of America, includingobligations that are unconditionally guaranteed by the United States of America, (ii) noncallable obligationsof an agency or instrumentality of the United States of America, including obligations that areunconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchasethereof are rated as to investment quality by a nationally recognized investment rating firm not less thanAAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality,or other political subdivision of a state that have been refunded and that, on the date the Board adopts orapproves the proceedings authorizing the financial arrangements are rated as to investment quality by anationally recognized investment rating firm not less than AAA or its equivalent.

(c) Notwithstanding the provisions of Section 12 of the Master Resolution, the Board may providefor the irrevocable deposit contemplated by Section 12 of the Master Resolution to be made with thePaying Agent/Registrar or with any other eligible bank or trust company as then authorized by state law.

Section 21. OFFICIAL STATEMENT. The System Representative is authorized and directedto provide for and oversee the preparation of a preliminary and final official statement in connection withthe issuance of the Bonds, and to approve such official statement and deem it final in compliance with theRule and to provide it to the purchasers of the Bonds in compliance with such Rule.

Section 22. FURTHER PROCEDURES. The Chair of the Board, any System Representative,and all other officers, employees, and agents of the Board, and each of them, shall be and they are herebyexpressly authorized, empowered, and directed from time to time and at any time to do and perform allsuch acts and things and to execute, acknowledge, and deliver in the name and under the corporate sealand on behalf of the Board all such instruments, whether or not herein mentioned, as may be necessary ordesirable in order to carry out the terms and provisions of this Fourteenth Supplement, the Bonds, the saleand delivery of the Bonds and fixing all details in connection therewith. The System Representative isauthorized to make application to obtain all approvals necessary in connection with the issuance of eachSeries of the Bonds including the Texas Bond Review Board and the Texas Higher EducationCoordinating Board. The System Representative is authorized to sign this Fourteenth Supplement.Nothing herein shall be construed as a waiver by the Board of its own rules and regulations, policies andprocedures.

Section 23. DTC LETTER OF REPRESENTATION. The Board heretofore has executed anddelivered to DTC a "Blanket Letter of Representations" with respect to the utilization by the Board ofDTC's book-entry-only system and the Board intends to utilize such book-entry-only system in connectionwith each Series of the Bonds.

Section 24. BOND INSURANCE. In connection with the sale of the Bonds, the Board mayobtain municipal bond insurance policies from a municipal bond insurer (the "Insurer") to guarantee thefull and complete payment required to be made by or on behalf of the Board on some or all of the Bondsas determined by the System Representative. The System Representative is hereby authorized to sign a


commitment letter with the Insurer and to pay the premium for the bond insurance policies at the time ofthe delivery of each Series of the Bonds out of the proceeds of sale of each Series of the Bonds or fromother available funds and to execute such other documents and certificates as necessary in connection withthe bond insurance policies as he or she may deem appropriate. Printing on Bonds covered by the bondinsurance policies a statement describing such insurance, in form and substance satisfactory to the Insurerand the System Representative, is hereby approved and authorized. The Award Certificate may containprovisions related to the bond insurance policies, including payment provisions thereunder, and the rightsof the Insurer or Insurers, and any such provisions shall be read and interpreted as an integral part of thisFourteenth Supplement.

Section 25. REFUNDING OF REFUNDED BONDS: ESCROW AGREEMENT;REDEMPTION OF REFUNDED BONDS. Concurrently with the delivery of a Series of Bonds issuedto refund Refunded Bonds, the System Representative shall cause to be deposited with the Escrow Agentan amount, from the proceeds from the sale of each Series of the Bonds, sufficient, together with otherlegally available funds of the Board, to provide for the payment and retirement of the Refunded Bonds.In the event that it is deemed necessary, the System Representative is authorized to enter into one or moreescrow agreements in the form and substance previously approved by the Board in connection with therefunding of Debt with such changes as are acceptable to the System Representative. In such event, theSystem Representative is authorized hereby to take such steps as may be necessary to purchase EscrowedSecurities, as defined in the Escrow Agreement, on behalf of the Board, and is authorized to create andfund the Escrow Fund contemplated by the Escrow Agreement through the use of the proceeds of eachSeries of the Bonds, the monies and investments held in the fund securing the Refunded Bonds and otherlawfully available monies of the Board.

Subject to the execution of a Bond Purchase Contract by the System Representative, the RefundedBonds are hereby called for redemption on the first optional redemption date following the delivery of eachSeries of the Bonds for which all of the notice requirements for redemption can be reasonably met, at aredemption price of par plus accrued interest, if any, to the date of redemption. The System Representativeshall take such actions as are necessary to cause the required notice of such redemption to be given. TheSystem Representative is authorized to solicit bids for and select one or more escrow agents with respectto each Series of Bonds issued to refund the Refunded Bonds.

Section 26. PUBLIC NOTICE. It is hereby found and determined that each of the officers andmembers of the Board was duly and sufficiently notified officially and personally, in advance, of the time,place, and purpose of the Meeting at which this Fourteenth Supplement was adopted; that this FourteenthSupplement would be introduced and considered for adoption at said meeting; and that said meeting wasopen to the public, and public notice of the time, place, and purpose of said meeting was given, all asrequired by Chapter 551, Texas Government Code.

Section 27. REIMBURSEMENT. The Board expects to pay expenditures in connection withthe purposes set forth in the Section 2 of this Fourteenth Supplement prior to the issuance of the Bonds.The Board finds, considers and declares that the reimbursement of the Board for the payment of suchexpenditures will be appropriate and consistent with the lawful objectives of the Board and, as such,chooses to declare its intention, in accordance with the provisions of Section 1.150-2 of the Treasury


Regulations, to reimburse itself for such payments at such time as it issues Bonds to accomplish thepurposes set forth in Section 2 of this Fourteenth Supplement. All costs to be reimbursed pursuant heretowill be capital expenditures. No Tax-Exempt Bonds will be issued by the Board in furtherance of thisFourteenth Supplement after a date which is later than 18 months after the later of (1) the date theexpenditures are paid or (2) the date on which the property, with respect to which such expenditures weremade, is placed in service. The foregoing notwithstanding, no Tax-Exempt Bonds will be issued pursuantto this Fourteenth Supplement more than three years after the date any expenditure which is to bereimbursed is paid.

Section 28. PAYMENT OF ATTORNEY GENERAL FEE. The Board hereby authorizes thedisbursement of a fee equal to the lesser of (i) one-tenth of one percent of the principal amount of eachSeries of the Bonds or (ii) $9,500 per Series, provided that such fee shall not be less than $750, to theAttorney General of Texas Public Finance Division for payment of the examination fee charged by theState of Texas for the Attorney General's review and approval of public securities and credit agreements,as required by Section 1202.004 of the Texas Government Code. The System Representative is herebyinstructed to take the necessary measures to make this payment. The Board is also authorized to reimbursethe appropriate funds for such payment from proceeds of the Bonds.

Section 29. NO PERSONAL LIABILITY. No covenant or agreement contained in the Bonds,this Fourteenth Supplement or any corollary instrument shall be deemed to be the covenant or agreementof any member of the Board or any officer, agent, employee or representative of the Board in his individualcapacity, and neither the directors, officers, agents, employees or representatives of the Board nor anyperson executing the Bonds shall be personally liable thereon or be subject to any personal liability fordamages or otherwise or accountability by reason of the issuance thereof, or any actions taken or dutiesperformed, whether by virtue of any constitution, statute or rule of law, or by the enforcement of anyassessment or penalty, or otherwise, all such liability being expressly released and waived as a conditionof and in consideration for the issuance of the Bonds.

Section 30. REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and all parts ofany resolutions that are in conflict or are inconsistent with this Fourteenth Supplement are hereby repealedand shall be of no further force or effect to the extent of such conflict or inconsistency. The remainingauthorization to issue additional bonds constituting Parity Debt as of the date hereof under the ThirteenthSupplemental Resolution to the Master Resolution adopted by the Board on April 20, 2009 (the"Thirteenth Supplemental Resolution") is hereby rescinded, and no such additional bonds may be issuedunder the Thirteenth Supplemental Resolution; provided, however, that for all purposes with respect tothe Board's outstanding Revenue Financing System Bonds issued under the Thirteenth SupplementalResolution, such resolution remains in full force and effect and is hereby ratified and reaffirmed in all suchrespects.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

SignaturePageTSUS\14thSupp09A: Res

The System has caused this Fourteenth Supplement to be executed by a System Representativeand its official seal to be impressed hereon.

TEXAS STATE UNIVERSITY SYSTEM

By: ______________________________________System Representative

[SEAL]

A-1TSUS\14thSupp09A: Res

EXHIBIT ADEFINITIONS

As used in this Fourteenth Supplement the following terms and expressions shall have the meaningsset forth below, unless the text hereof specifically indicates otherwise:

The term "Authorized Denomination" shall mean an Authorized Denomination as defined inSection 3 of this Fourteenth Supplement.

The term "Award Certificate" shall mean each Certificate executed by the System Representativein connection with each Series of Bonds that establishes the terms of the series of Bonds issued pursuantto Section 3 of this Fourteenth Supplement.

The term "Bonds" shall mean one or more Series of the Bonds designated in Section 2 of thisFourteenth Supplement, and all substitute bonds exchanged therefor, and all other substitute andreplacement bonds issued pursuant to this Fourteenth Supplement; and the term "Bond" means any of theBonds.

The term "Build America Bonds" shall mean each Series of Bonds designated as Build AmericaBonds pursuant to the provisions of the American Recovery and Reinvestment Act of 2009.

The term "Business Day" shall mean any day which is not a Saturday, Sunday, legal holiday, ora day on which banking institutions in The City of New York, New York or in the city where theDesignated Trust Office of the Paying Agent/Registrar is located are authorized by law or executive orderto close.

The term "Chancellor" shall mean the Chancellor or the Interim Chancellor of the Texas StateUniversity System.

The term "Designated Trust Office" shall have the meaning ascribed to said term in Section 5(b)of this Fourteenth Supplement.

The term "DTC" shall mean The Depository Trust Company, New York, New York, or anysuccessor securities depository.

The term "DTC Participant" shall mean securities brokers and dealers, banks, trust companies,clearing corporations, and certain other organizations on whose behalf DTC was created to hold securitiesto facilitate the clearance and settlement of securities transactions among DTC Participants.

The term "Fourteenth Supplement" shall mean this amended and restated resolution authorizingeach Series of the Bonds.

The term "Insurance Policy" shall mean the insurance policy issued by the Insurer guaranteeingthe scheduled payment of principal of and interest on a particular Series of the Bonds when due.


The term "Insurer" shall mean the company insuring a particular Series of the Bonds, or anysuccessor thereto or assignee thereof as set forth in the Award Certificate.

The term "IRS Code" shall mean the Internal Revenue Code of 1986, as amended.

The term "Master Resolution" shall mean the "Master Resolution Establishing The Texas StateUniversity System Revenue Financing System," adopted by the Board on August 12, 1998 as amendedby the "Resolution Amending the Master Resolution Establishing The Texas State University SystemRevenue Financing System" adopted by the Board on June 19, 2008.

The term "Maturity" shall mean the date on which the principal of a Bond becomes due andpayable as therein and herein provided, whether at Stated Maturity, by redemption or otherwise.

The term "MSRB" shall mean the Municipal Securities Rulemaking Board.

The terms "Paying Agent/Registrar," "Paying Agent" or "Registrar" shall mean the agentappointed pursuant to Section 5 of this Fourteenth Supplement, or any successor to such agent.

The term "Potential Refunded Bonds" means outstanding Parity Debt previously issued by theBoard.

The term "Refunded Bonds" means the Potential Refunded Bonds refunded by each Series of theBonds.

The term "Record Date" shall mean, with respect to each Series of the Bonds, the business dayof each month as set forth in the Award Certificate.

The term "Registration Books" shall mean the books or records relating to the registration,payment, and transfer or exchange of the Bonds maintained by the Paying Agent/Registrar pursuant toSection 5 of this Fourteenth Supplement.

The term "Rule" shall mean SEC Rule 15c2-12, as amended from time to time.

The term "SEC" shall mean the United States Securities and Exchange Commission.

The term "Section 55.17 Authorization" means Sections 55.1716, 55.1724, 55.1734, 55.1744,55.1754 of the Education Code or similar provisions hereafter enacted by the Texas Legislature.

The term "Series" shall mean any designated series of Bonds issued pursuant to this FourteenthSupplement.

The term "Stated Maturity", shall mean, when used with respect to the Bonds, the scheduledmaturity or mandatory sinking fund redemption date of a Series of the Bonds.


The term "System Representative" shall mean any one or more of the following officers oremployees of the Texas State University System, to wit: the Chair of the Board, the Chancellor, theInterim Chancellor, the Vice Chancellor for Finance or such other officer or employees of the Texas StateUniversity System, authorized by the Board to act as a System Representative.

The term "Taxable Bonds" shall mean each Series of Bonds bearing interest at a taxable rate.

The term "Tax-Exempt Bonds" shall mean each Series of Bonds bearing interest which isexcludable from gross income for federal taxation purposes pursuant to Section 103 of the IRS Code.

All terms not herein defined shall have the meanings given to said terms by the Master Resolutionor as otherwise defined in this Fourteenth Supplement.

As provided in the Award Certificate. To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this Form of*

Bond or contains information to complete missing information in this Form of Bond, the language in the Award Certificate shall be used in the executed

Bonds.

B-1TSUS\14thSupp09A: Res

EXHIBIT B

FORM OF BOND

UNITED STATES OF AMERICASTATE OF TEXAS

BOARD OF REGENTS, TEXAS STATE UNIVERSITY SYSTEMREVENUE FINANCING SYSTEM REVENUE BOND,

SERIES 20___*

NO. R-_ PRINCIPALAMOUNT

$__________

INTERESTRATE*

MATURITYDATE*

BONDDATE* CUSIP

REGISTERED OWNER:

PRINCIPAL AMOUNT: DOLLARS

ON THE MATURITY DATE specified above, the BOARD OF REGENTS, TEXAS STATEUNIVERSITY SYSTEM (the "Board"), being an agency and political subdivision of the State of Texas,hereby promises to pay to the Registered Owner, specified above, or the registered assignee hereof (eitherbeing hereinafter called the "registered owner") the principal amount, specified above, and to pay interestthereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from the BondDate, specified above, to the Maturity Date, specified above, or the date of redemption prior to maturity,at the interest rate per annum, specified above; with interest being payable on _________, 200___*, andsemiannually on each _____________* and _____________* thereafter, except that if the date ofauthentication of this Bond is later than the first Record Date (hereinafter defined), such principal amountshall bear interest from the interest payment date next preceding the date of authentication, unless such dateof authentication is after any Record Date but on or before the next following interest payment date, inwhich case such principal amount shall bear interest from such next following interest payment date.Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined only bya book entry at a securities depository for the Bonds, any payment to the securities depository, or its

As provided in the Award Certificate. To the extent that the Award Certificate relating to the Bonds is inconsistent with any provisions in this Form of*

Bond or contains information to complete missing information in this Form of Bond, the language in the Award Certificate shall be used in the executed

Bonds.


nominee or registered assigns, shall be made in accordance with existing arrangements between the Boardand the securities depository.

THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of theUnited States of America, without exchange or collection charges, solely from funds of the Board requiredby the resolution authorizing the issuance of the Bonds to be on deposit with the Paying Agent/Registrarfor such purpose as hereinafter provided. The principal of this Bond shall be paid to the registered ownerhereof upon presentation and surrender of this Bond at maturity or upon the date fixed for its redemptionprior to maturity, at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office")of The Bank of New York Mellon Trust Company, National Association, which is the "PayingAgent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the PayingAgent/Registrar to the registered owner hereof on each interest payment date by check, dated as of suchinterest payment date, and such check shall be sent by the Paying Agent/Registrar by United States mail,first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at theaddress of the registered owner, as it appeared on the last business day of the month next preceding eachsuch date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, ashereinafter described; provided, that upon the written request of any owner of not less than $1,000,000in principal amount of Bonds provided to the Paying Agent/Registrar not later than the Record Dateimmediately preceding an interest payment date, interest due on such Bonds on such interest payment dateshall be made by wire transfer to any designated account within the United States of America. In addition,interest may be paid by such other method acceptable to the Paying Agent/Registrar, requested by, andat the risk and expense of, the registered owner hereof. Any accrued interest due upon the redemption ofthis Bond prior to maturity as provided herein shall be paid to the registered owner upon presentation andsurrender of this Bond for redemption and payment at the Designated Trust Office of the PayingAgent/Registrar. The Board covenants with the registered owner of this Bond that on or before eachprincipal payment date and interest payment date for this Bond it will make available to the PayingAgent/Registrar, the amounts required to provide for the payment, in immediately available funds, of allprincipal of and interest on the Bonds, when due. Notwithstanding the foregoing, during any period inwhich ownership of the Bonds is determined by a book entry at a securities depository for the Bonds,payments made to the securities depository, or its nominee, shall be made in accordance with arrangementsbetween the Board and the securities depository. Terms used herein and not otherwise defined have themeaning given in the Bond Resolution (hereinafter defined).

DURING ANY PERIOD in which ownership of the Bonds is determined only by a book entryat a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and bearingthe same interest rate are to be redeemed, the particular Bonds of such maturity and bearing such interestrate shall be selected in accordance with the arrangements between the Board and the securities depository.

THIS BOND is one of a series of Bonds, dated as of the Bond Date stated above, authorized inaccordance with the Constitution and laws of the State of Texas in the aggregate principal amount of$______________ , issued pursuant to a Master Resolution adopted August 13, 1998, and pursuant to*

a Fourteenth Supplement Resolution adopted on October 23, 2009 referred therein (collectively, the "Bond


Resolution"), FOR THE PURPOSE OF _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.*

ON ___________, 20_____*, or on any date thereafter, the Bonds of this series maturing on andafter ____________, 20____* may be redeemed prior to their scheduled maturities, at the option of theBoard, with funds derived from any available and lawful source, as a whole, or in part, and, if in part, theparticular Bonds, or portions thereof, to be redeemed shall be selected and designated by the Board(provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at par andaccrued interest to the date fixed for redemption; provided, that during any period in which ownership ofthe Bonds is determined only by a book entry at a securities depository for the Bonds, if fewer than all ofthe Bonds of the same maturity and bearing the same interest rate are to be redeemed, the particular Bondsof such maturity and bearing such interest rate shall be selected in accordance with the arrangementsbetween the Board and the securities depository.

THE BONDS maturing on ____________, 20___* are subject to mandatory sinking fundredemption by lot prior to maturity in the following amounts, on the following dates and at a price of parplus accrued interest to the redemption date.

Bonds Maturing __________, 20___*

Redemption Date Principal Amount

________, 20___ $___________

_________, 20___† ___________†

†Final Maturity

THE PRINCIPAL AMOUNT of the Term Bonds required to be redeemed pursuant to theoperation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the Boardby the principal amount of any Term Bonds of the stated maturity which, at least 50 days prior to amandatory redemption date, (1) shall have been acquired by the Board, at a price not exceeding theprincipal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and deliveredto the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the PayingAgent/Registrar at the request of the Board at a price not exceeding the principal amount of the TermBonds plus accrued interest to the date of purchase thereof, or (3) shall have been redeemed pursuant tothe optional redemption provisions and not theretofore credited against a mandatory sinking fundredemption requirement.

AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof priorto maturity a written notice of such redemption shall be published once in a financial publication, journalor reporter of general circulation among securities dealers in The City of New York, New York or in theState of Texas. Such notice also shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the registeredowner of each Bond to be redeemed at its address as it appeared on the Registration Books on the 45th


day prior to such redemption date; provided, however, that the failure to send, mail or receive such notice,or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of theproceedings for the redemption of any Bond, and it is hereby specifically provided that the publication ofsuch notice as required above shall be the only notice actually required in connection with or as aprerequisite to the redemption of any Bonds or portions thereof. By the date fixed for any such redemptiondue provision shall be made with the Paying Agent/Registrar for the payment of the required redemptionprice for the Bonds or portions thereof which are to be so redeemed. If such written notice of redemptionis published and if due provision for such payment is made, all as provided above, the Bonds or portionsthereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to theirscheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall notbe regarded as being outstanding except for the right of the registered owner to receive the redemptionprice from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of anyBond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at thesame rate, in any denomination or denominations in any integral multiple of $5,000, at the written requestof the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, willbe issued to the registered owner upon the surrender thereof for cancellation, at the expense of the Board,all as provided in the Bond Resolution.

IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,Sunday, a legal holiday, or a day on which banking institutions in The City of New York, New York, orin the city where the Designated Trust Office of the Paying Agent/Registrar is located are authorized bylaw or executive order to close, then the date for such payment shall be the next succeeding day which isnot such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close;and payment on such date shall have the same force and effect as if made on the original date payment wasdue.

THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY AUTHORIZEDDENOMINATION may be assigned and shall be transferred only in the Registration Books of the Boardkept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms andconditions set forth in the Bond Resolution. Among other requirements for such assignment and transfer,this Bond must be presented and surrendered to the Paying Agent/Registrar, together with properinstruments of assignment, in form and with guarantee of signatures satisfactory to the PayingAgent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any authorizeddenomination to the assignee or assignees in whose name or names this Bond or any such portion orportions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed onthis Bond shall be executed by the registered owner or its duly authorized attorney or representative, toevidence the assignment hereof. A new Bond or Bonds payable to such assignee or assignees (which thenwill be the new registered owner or owners of such new Bond or Bonds), or to the previous registeredowner in the case of the assignment and transfer of only a portion of this Bond, may be delivered by thePaying Agent/Registrar in exchange for this Bond, all in the form and manner as provided in the nextparagraph hereof for the exchange of other Bonds. The Board shall pay the Paying Agent/Registrar's feesand charges, if any, for making such transfer or exchange as provided below, but the one requesting suchtransfer or exchange shall pay any taxes or other governmental charges required to be paid with respectthereto. The Paying Agent/Registrar shall not be required to make transfers of registration or exchange ofthis Bond or any portion hereof (i) during the period commencing with the close of business on any Record


Date and ending with the opening of business on the next following principal or interest payment date,or,(ii) with respect to any Bond or any portion thereof called for redemption prior to maturity, within 45days prior to its redemption date. The registered owner of this Bond shall be deemed and treated by theBoard and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including paymentand discharge of liability upon this Bond to the extent of such payment, and, to the extent permitted by law,the Board and the Paying Agent/Registrar shall not be affected by any notice to the contrary.

ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interestcoupons in the denomination of any integral multiple of $5,000 (an "Authorized Denomination"). Asprovided in the Bond Resolution, this Bond, or any unredeemed portion hereof, may, at the request of theregistered owner or the assignee or assignees hereof, be exchanged for a like aggregate principal amountof fully registered bonds, without interest coupons, payable to the appropriate registered owner, assignee,or assignees, as the case may be, having the same maturity date, in the same form, and bearing interest atthe same rate, in any Authorized Denomination as requested in writing by the appropriate registeredowner, assignee, or assignees, as the case may be, upon surrender of this Bond to the PayingAgent/Registrar for cancellation, all in accordance with the form and procedures set forth in the BondResolution.

WHENEVER the beneficial ownership of this Bond is determined by a book entry at a securitiesdepository for the Bonds, the foregoing requirements of holding, delivering, or transferring this Bond shallbe modified to require the appropriate person or entity to meet the requirements of the securitiesdepository as to registering or transferring the book entry to produce the same effect.

IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Board, resigns, orotherwise ceases to act as such, the Board has covenanted in the Bond Resolution that it promptly willappoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereofto be mailed to the registered owners of the Bonds.

IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validlyauthorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed,exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have beenperformed, existed, and been done in accordance with law; that the series of Bonds of which this Bond isone constitute Parity Debt under the Master Resolution; and that the interest on and principal of this Bond,together with the other Bonds of this series and the other outstanding Parity Debt are equally and ratablysecured by and payable from a lien on and pledge of the Pledged Revenues, subject only to the provisionsof, and the lien on and pledge of certain Pledged Revenues to, the Prior Encumbered Obligations.

THE BOARD has reserved the right, subject to the restrictions referred to in the BondResolution,(i) to issue additional Parity Debt which also may be secured by and made payable from a lienon and pledge of the aforesaid Pledged Revenues, in the same manner and to the same extent as this Bondand (ii) to amend the provisions of the Bond Resolution under the conditions provided in the BondResolution.


THE REGISTERED OWNER hereof shall never have the right to demand payment of thisBond or the interest hereon out of any funds raised or to be raised by taxation or from any sourcewhatsoever other than specified in the Bond Resolution.

BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledgesall of the terms and provisions of the Bond Resolution, agrees to be bound by such terms and provisions,acknowledges that the Bond Resolution is duly recorded and available for inspection in the official minutesand records of the Board, and agrees that the terms and provisions of this Bond and the Bond Resolutionconstitute a contract between each registered owner hereof and the Board.

IN WITNESS WHEREOF, the Board has caused this Bond to be signed with the manual orfacsimile signature of the Chairman of the Board and countersigned with the manual or facsimile signatureof the Secretary of the Board, and has caused the official seal of the Board to be duly impressed, or placedin facsimile, on this Bond.

____________________________________ ____________________________________Chairman, Board of Regents [Interim] Chancellor, Secretary of the Board

(SEAL)

FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE:

PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE

It is hereby certified that this Bond has been issued under the provisions of the Bond Resolutiondescribed in this Bond; and that this Bond has been issued in conversion of and exchange for orreplacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approvedby the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of theState of Texas.

THE BANK OF NEW YORK MELLONTRUST COMPANY, NATIONALASSOCIATIONPaying Agent/Registrar

Dated _______________________________________Authorized Representative

FORM OF ASSIGNMENT:

ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto


____________________________________________________________________________________________________________________________________________________________Please insert Social Security or TaxpayerIdentification Number of Transferee

_________________________________________

______________________________________________________________________________(Please print or typewrite name and address,

including zip code of Transferee)

______________________________________________________________________________

the within Bond and all rights thereunder, and hereby irrevocably constitutes andappoints________________________________________________________________, attorney, toregister the transfer of the within Bond on the books kept for registration thereof, with full power ofsubstitution in the premises.

Dated: ___________________________

Signature Guaranteed:_________________________________

__________________________________

NOTICE: Signature(s) must be guaranteed by aneligible guarantor institution participating in asecurities transfer association recognizedsignature guarantee program.

_____________________________________

NOTICE: The signature above must correspondwith the name of the registered owner as itappears upon the front of this Bond in everyparticular, without alteration or enlargement orany change whatsoever.

FORM OF REGISTRATION CERTIFICATE OFCOMPTROLLER OF PUBLIC ACCOUNTS TO ACCOMPANY

THE INITIAL BOND:

COMPTROLLER'S REGISTRATION CERTIFICATE:REGISTER NO. __________

I hereby certify that this Bond has been examined, certified as to validity, and approvedby the Attorney General of the State of Texas, and that this Bond has been registered by the Comptrollerof Public Accounts of the State of Texas.

Witness my signature and seal this

As provided in the Award Certificate. To the extent that the Award Certificate relating to the Bonds is inconsistent*

with any provisions in this Form of Bond or contains information to complete missing information in this Form ofBond, the language in the Award Certificate shall be used in the executed Bonds.

As provided in the Award Certificate. To the extent that the Award Certificate relating to the Bonds is inconsistent*

with any provisions in this Form of Bond or contains information to complete missing information in this Form ofBond, the language in the Award Certificate shall be used in the executed Bonds.


_______________________________________Comptroller of Public Accountsof the State of Texas

(COMPTROLLER'S SEAL)

INSERTIONS FOR THE INITIAL BOND

The initial Bond shall be in the form set forth in this Exhibit, except that:

A. immediately under the name of the Bond, the headings "INTEREST RATE" and"MATURITY DATE" shall both be completed with the words "As shown below" and "CUSIPNO." shall be deleted.

B. the first paragraph shall be deleted and the following will be inserted:

"ON THE MATURITY DATE SPECIFIED ABOVE, the Board of Regents of the TexasState University System (the "Board"), being a political subdivision, hereby promises to pay to theRegistered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on__________________ in each of the years, in the principal installments and bearing interest at the per*

annum rates set forth in the following schedule:

PrincipalAmount

Maturity( )

InterestRate

InitialYield

(Information from the Award Certificate of the System Representative to be inserted)

The Board promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a360-day year of twelve 30-day months) from ______________, 20___* at the respective Interest Rate perannum specified above. Interest is payable on _____________, 20___* and semiannually on each_______________ and _______________* thereafter to the date of payment of the principal installment*

specified above; except, that if this Bond is required to be authenticated and the date of its authenticationis later than the first Record Date (hereinafter defined), such principal amount shall bear interest from the


interest payment date next preceding the date of authentication, unless such date of authentication is afterany Record Date but on or before the next following interest payment date, in which case such principalamount shall bear interest from such next following interest payment date; provided, however, that if onthe date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is beingexchanged is due but has not been paid, then this Bond shall bear interest from the date to which suchinterest has been paid in full."

C. The initial Bond shall be numbered "T-1."

C-1TSUS\14thSupp09A: Res

EXHIBIT C

DESCRIPTION OF ACCOUNTING PRINCIPLES

The financial statements of the Texas State University System will be prepared in accordance withthe Texas Comptroller of Public Accounts' Annual Financial Reporting Requirements, and follow to theextent practical, the AICPA Industry Audit Guide Audits of Colleges and Universities, 1973,as amendedby AICPA Statement of Position (SOP) 74-8, Financial Accounting and Reporting by Colleges andUniversities, or such other accounting principles as the Board may be required to employ from time to timepursuant to state law or regulation.

1

2009 TERMS AND CONDITIONS American Recovery and Reinvestment Act (ARRA)

Parties to ARRA-recipient Agreement

This ARRA-recipient Agreement (ARRA-recipient Agreement or Agreement) is made and entered into by and between the Texas Higher Education Coordinating Board, an agency of the State of Texas, hereinafter referred to as "THECB," and the funds recipient, hereinafter referred to as the ARRA-recipient. Furthermore, THECB and the ARRA-recipient are collectively hereinafter referred to as the “Parties.” By this ARRA-recipient Agreement’s execution, the Parties have severally and collectively agreed to be bound to the mutual obligations and to the performance and accomplishment of the tasks described in this ARRA-recipient Agreement. The ARRA-recipient Agreement is only an offer until the ARRA-recipient returns the signed copy of the 2009 ARRA-recipient Agreement in accordance with the date provided in the transmittal letter and in the Agreement. ARRA-recipient Purpose and Overview

A. Purpose and Overview. The American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5, is an Act making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, and for other purposes. B. Special Conditions, Activities implemented under ARRA must preserve and create jobs and promote economic recovery, assist those most impacted by the recession, provide investment needed to increase economic efficiency by spurring technological advances in science and health, invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, and stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. Use of ARRA funds must be consistent with and supportive of implementation of the project. Linkages between specific projects undertaken with ARRA funds and strategic goals and objectives will be highlighted through regular mechanisms, including the reporting requirements outlined at http://www.federalreporting.gov. The ARRA-recipient shall comply with the cost principles set forth in Office of Management and Budget (OMB) Circulars (as Applicable to their entity), and these (OMB) Circulars are incorporated by reference as part of this

Agreement: OMB A-21, Cost Principles for Educational Institutions OMB A-87, Cost Principles for State, Local, and Indian Tribal Governments OMB A-122, Cost Principles for Non-Profit Organizations The ARRA-recipient shall comply with the uniform administrative requirements set forth in OMB Circulars (as applicable), and these (OMB) Circulars are incorporated by reference as part of this Agreement: OMB A-102, Grants and Cooperative Agreements with State and Local Governments OMB A-110, Uniform Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations The ARRA-recipient shall comply with the uniform administrative requirements set forth in OMB Circulars (as applicable), and this (OMB) Circular is incorporated by reference as part of this Agreement: OMB A-133, Audits of States, Local Governments, and Non-Profit Organizations

C. Standard of Performance. The ARRA-recipient shall perform all activities and projects outlined in ARRA-recipient’s application to THECB. The ARRA-recipient shall perform all activities in accordance with all terms, provisions and requirements set forth in this ARRA-recipient Agreement and the:

1. Applicable Laws and Regulations, hereinafter referred to as “Exhibit A”; 2. Certifications, hereinafter referred to as “Exhibit B”; and 3. Certification Regarding Lobbying for ARRA-recipient Agreements, Grants, Loans, and Cooperative

Agreements, hereinafter referred to as “Exhibit C”. D. Failure to Perform. In the event the ARRA-recipient fails to implement the project(s) outlined in its application to THECB, or comply with any of this ARRA-recipient Agreement’s provisions, in addition to the remedies specified in this ARRA-recipient Agreement, the ARRA-recipient is liable to THECB for an amount not to exceed the award amount of this ARRA-recipient Agreement and may be barred from applying for or receiving additional ARRA program funds or any other

2

federal program funds administered by THECB until repayment to THECB is made and any other compliance or audit finding is satisfactorily resolved. THECB Obligations

A. Measure of Liability. THECB shall be liable for actual and reasonable costs incurred by the ARRA-recipient during the ARRA-recipient Agreement period for performances rendered under this ARRA-recipient Agreement by the ARRA-recipient, subject to the limitations set forth in this Section. THECB shall not be liable to the ARRA-recipient for any costs incurred by the ARRA-recipient that are not allowable costs. B. ARRA-recipient Agreement Funds Defined and Limit of Liability. The term "ARRA-recipient Agreement funds" as used in this ARRA-recipient Agreement means funds provided by THECB under the ARRA programs. The term "ARRA-recipient's funds" or match funds as used in this ARRA-recipient Agreement means funds provided by the ARRA-recipient. Notwithstanding any other provision of this ARRA-recipient Agreement, the total of all payments and other obligations incurred by THECB under this ARRA-recipient Agreement shall not exceed the Total Award Amount listed on the cover page of the ARRA-recipient Agreement. C. Excess Payments. The ARRA-recipient shall refund to THECB any sum of ARRA-recipient Agreement funds that THECB determines has resulted in overpayment to the ARRA-recipient as a result of a THECB determination that the funds have not been spent by the ARRA-recipient in accordance with this ARRA-recipient Agreement. No refund payment(s) may be made from federal grant funds unless repayment with grant funds is specifically permitted by statute or regulation. The ARRA-recipient shall make such refund to THECB within thirty (30) days after THECB requests such refund. Suspension

Notwithstanding the provisions of Chapter 2251, Texas Government Code, in the event the ARRA-recipient fails to comply with any of this ARRA-recipient Agreement’s terms, THECB may, upon written notification to the ARRA-recipient, suspend this ARRA-recipient Agreement in whole or in part, withhold payments to the ARRA-recipient and prohibit the ARRA-recipient from incurring additional obligations of ARRA-recipient Agreement funds. Termination

A. THECB’s Right to Terminate. THECB shall have the right to terminate this ARRA-recipient Agreement, in whole or in part, at any time before the end of the Performance Period, whenever THECB determines that the ARRA-recipient has failed to comply with any of this ARRA-recipient Agreement’s terms. THECB shall notify the ARRA-recipient in writing prior to the thirtieth (30th) day preceding the termination of such determination and include:

1. the reasons for such termination; 2. the effective date of such termination; and 3. in the case of partial termination, the portion of the ARRA-recipient Agreement to be terminated.

THECB may also terminate this ARRA-recipient Agreement upon termination of ARRA funding from the federal government. B. Parties’ Right to Terminate. In addition to THECB’s right to terminate specified in Subsection A of this section, both Parties shall have the right to terminate this ARRA-recipient Agreement, in whole or in part, when the Parties agree that the continuation of the activities funded under this ARRA-recipient Agreement would not produce beneficial results commensurate with the further expenditure of ARRA-recipient Agreement funds. The Parties shall agree, in writing, upon the termination conditions, including the effective date of termination and in the case of partial termination, the portion of the ARRA-recipient Agreement to be terminated. Conflict of Interest

A. Financial Interest Prohibited. A conflict of interest may arise when the employee, officer or agent; any member of his or her immediate family; his or her partner; or, any organization that employs, or is about to employ any of the above, has a financial or other interest in the firm or person selected to perform a subcontract pursuant to this ARRA-recipient Agreement. The ARRA-recipient shall ensure that no employee, officer, or agent of the ARRA-recipient shall participate in the selection, in the award or administration of a subcontract supported by ARRA-recipient Agreement funds pursuant to this ARRA-recipient Agreement and shall comply with Chapter 171, Texas Local Government Code. B. Other Prohibited Interests. In all cases not governed by Subsection A of this Section and except for eligible administrative or personnel costs, no person who is an employee, agent, consultant, officer, elected official, appointed

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official of the ARRA-recipient or of a subcontractor of the ARRA-recipient, who exercises or has exercised any functions or responsibilities with respect to the activities assisted under this ARRA-recipient Agreement or any other ARRA-recipient Agreement who is in a position to participate in a decision making process or gain inside information with regard to such activities, may obtain a financial interest or benefit from the activity, have an interest in or benefit from the activity or have any interest in any ARRA-recipient Agreement, subcontract or agreement with respect to the activities or the proceeds either for themselves or those with whom they have family or business ties during their tenure or for one year thereafter.

C. Inclusion in Subcontracts. The ARRA-recipient shall include the substance of this Section in all subcontracts. Monitoring

THECB reserves the right to perform periodic on-site monitoring of the ARRA-recipient's compliance with this ARRA-recipient Agreement’s terms and conditions and of the adequacy and timeliness of the ARRA-recipient's performance pursuant to this ARRA-recipient Agreement and 34 C.F.R. 80.40. THECB will monitor ARRA-recipients to assure compliance with applicable Federal requirements and that performance goals are being achieved for each program, function or activity. After each monitoring visit, THECB shall provide the ARRA-recipient with a written report of the monitor's findings. If the monitoring report notes deficiencies in the ARRA-recipient's performance under this ARRA-recipient Agreement’s terms, the monitoring report shall include requirements for the timely correction of such deficiencies by the ARRA-recipient. Failure by the ARRA-recipient to take action specified in the monitoring report may be cause for this ARRA-recipient Agreement’s suspension or termination pursuant to the Sections on Suspension and/or Termination set forth on page 2 of this ARRA-recipient Agreement. Audit

A. Audit of Federal and State Funds. The ARRA-recipient shall arrange for the performance of an annual financial and compliance audit of ARRA-recipient Agreement funds received and performances rendered under this ARRA-recipient Agreement under the Single Audit Act (OMB Circular A – 133; 34 C.F.R. Part 74) and as outlined in Exhibit A. The ARRA-recipient will also comply with Texas Government Code, Chapter 783, 1 TAC 5.141.et.seq. and the Uniform Grant Management Standards (UGMS), State Uniform Administrative Requirements for Grants and Cooperative Agreements. B. THECB’s Right to Audit. Notwithstanding Subsection A. of this Section, THECB reserves the right to conduct a financial and compliance audit of ARRA-recipient Agreement funds received and performances rendered under this ARRA-recipient Agreement. The ARRA-recipient agrees to permit THECB or its authorized representative, designee, or agent to audit the ARRA-recipient’s records and to obtain any documents, materials or information necessary to facilitate such audit.

C. ARRA-recipient’s Liability for Disallowed Costs. The ARRA-recipient understands and agrees that it shall be liable to THECB for any costs disallowed pursuant to financial and compliance audit(s) of ARRA-recipient Agreement funds. The ARRA-recipient further understands and agrees that reimbursement to THECB of such disallowed costs shall be paid by the ARRA-recipient from funds that were not provided or otherwise made available to the ARRA-recipient pursuant to this ARRA-recipient Agreement or any other federal contract. D. ARRA-recipient’s Facilitation of Audit. The ARRA-recipient shall take such action to facilitate the performance of such audit(s) conducted pursuant to this Section as THECB may require of the ARRA-recipient. E. State Auditor’s Office. The ARRA-recipient understands that acceptance of ARRA-recipient Agreement funds acts as acceptance of the authority of the State Auditor's Office or any successor agency to conduct an audit or investigation in connection with these funds. The ARRA-recipient further agrees to cooperate fully with the State Auditor's Office or its successor in the conduct of the audit or investigation, including providing all records requested. The ARRA-recipient shall ensure that this clause concerning the authority to audit funds received indirectly by subcontractors through the ARRA-recipient and the requirement to cooperate is included in any subcontract it awards. Reimbursement ARRA-recipient agrees to make no request for reimbursement prior to return of this Agreement signed by the authorized ARRA-recipient representative. ARRA-recipient also agrees to make no request for reimbursement for goods or services procured by ARRA-recipient prior to the performance period start date of this Agreement or after the performance period end date of this Agreement. A. Request for Reimbursement. The ARRA-recipient shall submit to THECB, a properly completed Budget Form once per month by the 5th day of the month. THECB retains the authority to approve or deny the amount requested and shall not make disbursement of any such payment until THECB has reviewed and approved such a request. The 2009-

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2010 American Recovery and Reinvestment Act of 2009 Texas Higher Education Coordinating Board Budget Form (see Guidelines) shall be supported by documentation as referenced generally in the Guidelines, pg. 22. B. Payment Contingent. Notwithstanding the provisions of Subsection A of this Section, payments under this ARRA-recipient Agreement are contingent upon the ARRA-recipient's performance of its contractual obligations.

C. Source Documentation Requirement. ARRA-recipients must provide proof of payment documentation with the final reimbursement request submitted for processing. The following is a list of acceptable proof of payment documents:

o Copy of cancelled check

o Screen print of General Ledger account showing funds have been encumbered

o Credit Card Statement showing purchase of the items

o Payroll journal for individuals showing rate of pay and hours worked

o Copy of invoice stamped “paid” with the date, vendor initials and check number for reference

Other Requirements

A. ARRA-recipients must submit Fiscal Year 2009 Indirect Cost Allocation Plan signed by Cognizant Agency. B. ARRA-recipients must submit fiscal and performance reports on a monthly basis. The reports are due by the 5th day of each month. Reports will follow the report format outlined in Appendix B of the Guidelines. These reports will be e-mailed to: [email protected] by the due date each month. If reports are not received by the deadline, reimbursements will be suspended until the reports are received. Closing the Grant

A. The ARRA-recipient must have expended all grant funds and submitted expenditure reimbursement requests and any invoices by the end of the performance period listed on the ARRA-recipient Agreement. B. THECB will close an award after receiving ARRA-recipient’s final expenditure report indicating that all approved work has been completed and all funds have been disbursed, completing a review to confirm the accuracy of the reported information, and reconciling actual costs to awards modifications and payments. If the close out review and reconciliation indicates that the ARRA-recipient is owed additional funds, THECB will send the final payment automatically to the ARRA-recipient. Restrictions, Disclaimers and Notice

A. Notwithstanding any other Agreement provisions, the parties hereto understand and agree that THECB’s obligations under this Agreement are contingent upon the receipt of adequate funds to meet THECB’s liabilities hereunder. THECB shall not be liable to the ARRA-recipient for costs under this Agreement which exceed the amount specified in the Notice of ARRA-recipient Award.

B. Notice. All notices or communication required or permitted to be given by either party hereunder shall be deemed sufficiently given if mailed by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the other party at its respective address set forth below or to such other address as one party shall give notice of to the other from time to time hereunder. Mailed notices shall be deemed to be received on the third business day following the date of mailing. Notices sent by overnight courier shall be deemed received the following business day. Notice shall be sent to: For Texas Higher Education Coordinating Board [email protected] For ARRA-recipient: _______________________________________ _______________________________________

mailto:[email protected]


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Uniform Administrative Requirements, Cost Principals, Audit Requirements and Program Income Except as specifically modified by law or this ARRA-recipient Agreement’s provisions, the ARRA-recipient shall administer the award through compliance with all Applicable Laws and Regulations, Exhibit A, but specifically with: A. Administrative Requirements

1. 34 C.F.R. Part 74, Administration of Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations;

2. 2 C.F.R. Part 215, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations.

B. Cost Principles

1. 2 C.F.R. Part 225, Cost Principles for State, Local and Tribal Governments 2. 2 C.F.R. Part 220, Cost Principals for Education Institutions 3. 2 C.F.R. Part 230, Cost Principles for Non-Profit Organizations 4. Federal Acquisition Regulation Subpart 31.2, Contracts with Commercial Organizations

C. Audit Requirements – OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. D. Construction Requirements – Will comply with the National Environmental Policy Act (NEPA), Davis-Bacon and Related Acts (DBRA) state and federal procurement standards and state construction requirements outlined in the American Recovery and Reinvestment Act Guidelines, Program Year 2009 and referenced in Exhibit A, The Applicable Laws and Regulations. Retention and Accessibility of Records A. Retention of Records. The ARRA-recipient shall maintain fiscal records and supporting documentation for all expenditures of ARRA-recipient Agreement funds pursuant to OMB Circular A-87, and this ARRA-recipient Agreement. The ARRA-recipient shall retain these records and any supporting documentation for the greater of five (5) years from the completion of this project’s public objective (close of the ARRA-recipient Agreement), including program requirements and financial obligations, or the period of time required by other applicable laws and regulations as described in Exhibit A. B. Access to Records. The ARRA-recipient shall give the United States Department of Education, the Inspector General, the General Accounting Office, the Auditor of the State of Texas, THECB, or any of their duly authorized representatives, access to and the right to examine all books, accounts, records, reports, files, other papers, things or property belonging to or in use by the ARRA-recipient pertaining to this ARRA-recipient Agreement including records concerning the past use of federal funds. Such rights to access shall continue as long as the records are retained by the ARRA-recipient. The ARRA-recipient agrees to maintain such records in an accessible location and to provide citizens reasonable access to such records consistent with the Texas Public Information Act, Chapter 552, Texas Government Code. C. Inclusion in Subcontracts. The ARRA-recipient shall include the substance of this Section, Retention and Accessibility of Records, in all subcontracts. Subcontracts A. THECB’s Approval of Subcontract and Liability. The ARRA-recipient may subcontract for performances described in this ARRA-recipient Agreement without obtaining THECB's prior written approval. B. ARRA-recipient Liability. In no event shall any provision of this Section be construed as relieving the ARRA-recipient of the responsibility for ensuring that the performances rendered under all subcontracts comply with all of this ARRA-recipient Agreement’s terms as if such performances rendered were rendered by the ARRA-recipient. THECB's approval under this Section does not constitute adoption, ratification or acceptance of the ARRA-recipient's or a subcontractor's performance. ARRA-recipient shall require all subcontractors to comply with the same reporting requirements as ARRA-recipient outlined in the Section of this Agreement entitled “Other Requirements”, paragraph B. ARRA-recipient will also be responsible to ensure that all Vendors comply with the same reporting requirements.

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C. Applicable Law. The ARRA-recipient shall comply with 34 C.F.R. § 74.46 and all applicable federal and state laws outlined in Exhibit A and local laws, regulations and ordinances related to making procurements under this ARRA-recipient Agreement. Legal Authority A. Signatory Authority. The ARRA-recipient assures and guarantees that the ARRA-recipient possesses the legal authority to enter into this ARRA-recipient Agreement, to receive ARRA-recipient Agreement funds and to perform the services the ARRA-recipient has obligated itself to perform pursuant to this ARRA-recipient Agreement. B. Authorized Representative. The person or persons signing and executing this ARRA-recipient Agreement on the ARRA-recipient’s behalf do warrant and guarantee that he, she or they have been duly authorized by the ARRA-recipient to execute this ARRA-recipient Agreement on the ARRA-recipient’s behalf and to validly and legally bind the ARRA-recipient to all contractual terms, performances and provisions. If requested, ARRA-recipient will provide THECB with documents granting authority to the designated representative authorizing them to execute documents for this purpose. Notice of Litigation and Claims The ARRA-recipient shall give THECB immediate notice in writing of:

1. any action, including any proceeding before an administrative agency, filed against the ARRA-recipient arising out of the performance of any subcontract under this ARRA-recipient Agreement; and

2. any claim against the ARRA-recipient, the cost and expense of which the ARRA-recipient may be entitled to be reimbursed by ARRA grant programs.

Except as otherwise directed by THECB, the ARRA-recipient shall furnish immediately to THECB copies of all documentation received by the ARRA-recipient with respect to such action or claim. Indemnification To the extent permitted by law, the ARRA-recipient agrees to hold THECB harmless and to indemnify THECB from and against any and all claims, demands and causes of action of every kind and character that may be asserted by any party occurring or in any way incident to, arising out of or in connection with the services to be performed by the ARRA-recipient or its subcontractors, if any, pursuant to this ARRA-recipient Agreement. Changes and Amendments A. Written Amendment. Except as specifically provided otherwise in this ARRA-recipient Agreement, any alterations, additions or deletions to this ARRA-recipient Agreement’s terms shall be made through written amendments generated by THECB and executed by the Parties. B. Authority to Amend. This ARRA-recipient’s deliverables shall be rendered in accordance with ARRA, Exhibit A, the assurances and certifications made to THECB by the ARRA-recipient and the assurances and certifications made to THECB by the State of Texas with regard to the operation of the ARRA grant programs. Policies and reporting requirements may further be amended by THECB, during the period of this ARRA-recipient Agreement’s performance as the federal government issues policy directives that serve to establish, interpret or clarify this ARRA-recipient Agreement’s performance requirements. Such policy directives shall be promulgated by THECB in the form of Information Bulletins and shall have the effect of qualifying this ARRA-recipient Agreement’s terms and shall be binding upon the ARRA-recipient as if written in the ARRA-recipient Agreement. C. Effect of Changes in Federal and State Laws. Any alterations, additions, or deletions to this ARRA-recipient Agreement’s terms that are required by the changes in federal and state laws or regulations are automatically incorporated into this ARRA-recipient Agreement without written amendment to this ARRA-recipient Agreement and shall become effective on the date designated by such law or regulation. The Recovery Accountability and Transparency Board periodically publishes Information Bulletins to release, update, amend or clarify grants and programs which it administers. Information regarding releases and information regarding ARRA funds can be accessed at http://www.recovery.gov/ and are incorporated by reference into this ARRA-recipient Agreement as if set forth herein. D. The ARRA-recipient shall notify THECB within ten (10) working days of the occurrence of any change in the ARRA-recipient’s key personnel assigned to the grant project, significant changes affecting the ARRA-recipient’s identity (such as name, governing structure or organization ownership or control, name change, governing board membership), any voluntary or involuntary actions in bankruptcy, or any criminal or civil allegations or actions by or against the ARRA-recipient.

http://www.recovery.gov/

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Headings

Headings and captions of this ARRA-recipient Agreement’s sections and paragraphs are only for convenience and reference. These headings and captions shall not affect or modify this ARRA-recipient Agreement’s terms or be used to interpret or assist in the construction of this ARRA-recipient Agreement.

Program ARRA-recipients

Except as specifically authorized by THECB in writing, the ARRA-recipients, in selecting their Sub-grantees (“Program Sub-recipients”) hereunder, shall utilize procurement procedures referenced in OMB Circular A-102 or A-110 (as applicable).

The ARRA-recipient, in sub-granting any of the performances hereunder, expressly understands that in entering into such sub-grants, THECB is in no way liable to the Program Sub-recipients.

The ARRA-recipient shall ensure that the performances rendered under all sub-grants by their Program Sub-recipients are rendered so as to comply with all the terms and provisions of this ARRA-recipient Agreement as if the performances rendered were rendered by the ARRA-recipient.

Should the ARRA-recipient enter into a subsequent sub-grant, the ARRA-recipient shall:

1. Remain liable for the performance of the terms, conditions, and attachments of this ARRA-recipient Agreement. 2. Provide to THECB, within thirty (30) days of contract execution, all Program Sub recipient’s names, addresses,

telephone numbers, contact persons, contract amounts, and program description of each sub-grant to this ARRA-recipient Agreement.

3. Require that Program Sub-recipients make all documents, papers, and records relevant to the work performed available to THECB and/or Federal Granting Agency or their duly authorized representative for examination, copying, or mechanical reproduction.

4. Require each of its Program Sub-recipients to be subject to the examination and audit of its duly authorized agents and shall mandate that all Program Sub-recipients retain all financial records, supporting documents, statistical records, evaluation data, program performance data, member information and personnel records for a period of five (5) years after: a. The submission of the Program Sub-recipient’s final expenditure report for the program; and

5. The resolution of any litigation, claim, negotiation, audit or other action involving those records, if such resolution is after the submission of the Program Sub-recipient’s final expenditure report for the program..Notify THECB in writing within thirty (30) days if any Program Sub-recipient under this award is suspended or terminated. Additionally, in such notice, the ARRA-recipients shall identify how the suspension or termination will impact the Sub-recipient’s budget and scope of work.

6. Provide written notice to each Program Sub-recipient within seven (7) days from the date the ARRA-recipient Agreement is terminated or the date THECB suspends this ARRA-recipient Agreement.

7. Request of each program Sub-recipient, the certifications required in Attachment B: Assurances and Certifications.

Buy Texas

ARRA-recipient represents and warrants that it will buy Texas products and materials for use in providing the services authorized herein when such products and materials are available at a comparable price and in a comparable period of time when compared to non-Texas products and materials. Technical Assistance

THECB will provide technical assistance to the ARRA-recipient with correcting the deficiencies noted during monitoring, evaluations, the reimbursement process or the normal course of business. THECB may conduct follow-up visits to review the previous deficiencies and to assess the efforts made to correct them.

THECB will provide certain training and technical assistance. Trainings and technical assistance will be optional or mandatory as deemed by THECB.

The ARRA-recipient shall attend such trainings designated as mandatory. When trainings and/or technical assistance are deemed mandatory, attendance is measured and becomes part of the ARRA-recipient’s performance record.

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THECB may provide technical assistance or training to the ARRA-recipient to address any performance issues, financial requirements, reporting deficiencies, or other operational concerns that are documented or observed through contract oversight activities. THECB may conduct follow-up visits or perform other monitoring activities to assess the extent to which the technical assistance and/or training has achieved its objectives.

THECB’s approach to technical assistance or training will be directly related to the operational factors that gave rise to the need for THECB intervention or involvement. At the discretion of THECB, technical assistance and/or training may result in additional requirements that are binding on the ARRA-recipient through an operational improvement plan.

THECB and the ARRA-recipient agree that opportunities for improvements in operational efficiency, financial accountability, program outcomes, or other relevant qualitative factors shall be systematically pursued and implemented. When an opportunity is identified by THECB through Agreement oversight activities, THECB may request the development of an operational improvement plan. An operational improvement plan requested by THECB is considered a contractual deliverable and is binding upon the ARRA-recipient at the time it is approved by THECB. While the plan is binding, the timeframe for its implementation is determined by the mutual consent of both parties, which may not be unreasonably withheld.

Fraud

State agencies, college, and universities are required by law, Texas Government Code, Section 321.022, to report suspected fraud or unlawful conduct to the State Auditor’s Office if there are facts that point to fraud or unlawful conduct. Persons or entities reporting fraud to the State Auditor’s Office do not have to establish probable cause and/or have a suspect. To report fraud, waste, or abuse occurring at a Texas state agency, college, or university call the State Auditor’s Office hotline at 1-800-TX-AUDIT (892-8348). In addition, a form to report fraud, waste or abuse is available on the Fraud Reporting Page: http://sao.fraud.state.tx.us/. Reports of fraud, waste or abuse may also be mailed to: State Auditor’s Office, Attn: SIU, P. O. Box 12067, Austin, TX 78711-2067. Persons who report fraud may choose to remain anonymous. Oral and Written Agreements A. Prior Agreements. All oral and written agreements between the Parties relating to this ARRA-recipient Agreement’s subject matter that were made prior to Date of Execution have been reduced to writing and are contained in this ARRA-recipient Agreement. B. Exhibits. The exhibits enumerated and denominated in the Agreement are hereby made a part of this ARRA-recipient Agreement and constitute promised performances by the ARRA-recipient in accordance with the ARRA-recipient Agreement and the Exhibits.

C. Commissioner’s Signature. This ARRA-recipient Agreement is not effective unless signed by the Commissioner of THECB or by his authorized designee.

Compliance with Law/Order of Precedence

Any inconsistency in the ARRA-recipient Agreement shall be resolved by giving precedence in the following order (a) Applicable Federal Statutes, (b) Code of Federal Regulations, (c) State of Texas Statutes, (d) State of Texas Administrative Code, (e) Notice of Funding Opportunity, (f) the approved ARRA Application including all assurances, certifications, attachments, and pre-award negotiations and (g) THECB Federal Funding Implementation Manual. In the event of a conflict between such laws and regulations and the terms and conditions of this ARRA-recipient Agreement, precedence shall be given to the laws and regulations.

Waiver Any right or remedy provided for in this ARRA-recipient Agreement provision shall not preclude the exercise of any other right or remedy under this ARRA-recipient Agreement or under any provision of law, nor shall any action taken or failure to take action in the exercise of any right or remedy be deemed a waiver of any other rights or remedies at any time. Venue For purposes of litigation pursuant to this ARRA-recipient Agreement, venue shall lie only in Travis County, Texas.

http://sao.fraud.state.tx.us/

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EXHIBIT A

APPLICABLE LAWS AND REGULATIONS

The ARRA-recipient shall comply with the American Recovery and Reinvestment Act and regulations specified in Title 2, Part 215, Institutions of Higher Education, Hospitals and Other Non-Profit Organizations; 34 C.F.R. 80.40; OMB Circular A-21, A-87, A-102, A-110, A-122, A-133; and Ex. Order 12372 (intergovernmental review of federal programs). ARRA-recipient shall also comply with all other federal, state, and local laws and regulations applicable to this ARRA-recipient Agreement’s activities and performances rendered by the ARRA-recipient including but not limited to the laws and the regulations promulgated hereunder and specified in the Texas Uniform Grants Management Standards (UGMS) and Paragraph A through P of this Exhibit. A. CIVIL RIGHTS - Title VI of the Civil Rights Act of 1964, as amended. (42 U.S.C. § 2000d et seq.); http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+2957+3++%28civil%20ri

B. HANDICAP AND ARCHITECTURAL BARRIERS - Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794) http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t29t32+363+0++%28Handicap%29 ; The ARRA-recipient shall ensure that the plans and specifications for construction of, improvements to, or the renovation of buildings, related to this project have been received by the Texas Department of Licensing and Regulation (TDLR) concerning the elimination of architectural barriers encountered by persons with disabilities as specified in Chapter 469, Texas Government Code. http://tlo2.tlc.state.tx.us/statutes/gv.toc.htm C. ENVIRONMENTAL LAW AND AUTHORITIES - The ARRA-recipient shall assume the environmental responsibilities for projects and in doing so shall comply with the provisions of the National Environmental Policy Act of 1969, as amended and the Council on Environmental Quality regulations contained in 40 C.F.R. parts 1500 through 1508. http://www.access.gpo.gov/nara/cfr/waisidx_07/40cfr1501_07.html; (44 C.F.R. 10.1) D. LABOR STANDARDS - The Davis-Bacon Act, as amended (40 U.S.C. § 3142) http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t37t40+1723+1++%28%29%20%20A ; The Contract Work Hours & Safety Standards Act (40 U.S.C. § 3702) http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t37t40+1765+1++%28%29%20%20A

; The Copeland "Anti-Kickback" Act (18 U.S.C. § 874) http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t17t20+514+0++%28%29%20%20AND%20%28%2818%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%28874%29%29%3ACITE%20%20%20%20%20%20%20%20%20 E. FREEDOM OF INFORMATION ACT – (5 U.S.C. 552); http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t05t08+26+0++%28information%

F. UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970 – If the ARRA-recipient is a governmental entity, it must comply with the requirements of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. § 4601 et seq.), which govern the treatment of persons displaced as a result of federal and federally-assisted programs; and (Federal Assurance) - (42 U.S.C. 4601); http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+4598+1++%28%29%20%20AND%20%28%2842%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%284601%29%29%3ACITE%20%20%20%20%20%20%20%20%20 G. FAITH-BASED ACTIVITIES - Executive Order 13279 of December 12, 2002 - Equal Protection of the Laws for Faith-Based and Community Organizations, (67 Fed. Reg. 77141) http://edocket.access.gpo.gov/2002/pdf/02-31831.pdf H. PROGRAM INCOME - If a ARRA-recipient is approved for an advance, the funds must be deposited in a separate interest bearing account and are subject to the rules outlined in the Uniform Rule 28C.F.R. Part 66, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, at http://www.access.gpo.gov/nara/cfr/waisidx_03/28cfr66_03.html and the Uniform Rule 28 C.F.R. Part 70, Uniform Administrative Requirements for Grants and Agreements (including sub-awards) with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations, at http://www.access.gpo.gov/nara/cfr/waisidx_03/28cfr70_03.html. ARRA-recipients must report any interest earned to THECB. Any interest earned in excess of $100 must, on a quarterly basis, be remitted to:

United States Department of Health and Human Services Division of Payment Management Services P.O. Box 6021

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+2957+3++%28civil%20ri

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t29t32+363+0++%28Handicap%29

http://tlo2.tlc.state.tx.us/statutes/gv.toc.htm

http://www.access.gpo.gov/nara/cfr/waisidx_07/40cfr1501_07.html

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t37t40+1723+1++%28%29%20%20A

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t37t40+1765+1++%28%29%20%20A

http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t17t20+514+0++%28%29%20%20AND%20%28%2818%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%28874%29%29%3ACITE%20%20%20%20%20%20%20%20%20



http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t05t08+26+0++%28information%25




http://edocket.access.gpo.gov/2002/pdf/02-31831.pdf



10

Rockville, MD 20852

I. AUDITS/MONITORING - The ARRA-recipient shall arrange for the performance of an annual financial and compliance audit of ARRA-recipient Agreement funds received and performances rendered under this ARRA-recipient Agreement under the Single Audit Act (OMB Circular A – 133; 44 C.F.R. 13.26). http://www.dhs.gov/xopnbiz/grants/gc_1162481125903.shtm ARRA-recipients will also be monitored for compliance with this ARRA-recipient Agreement’s terms and pursuant to 34 C.F.R. 80.40. http://edocket.access.gpo.gov/cfr_2008/julqtr/34cfr80.40.htm . J. GRANT ADMINISTRATION - The ARRA-recipient will also comply with Texas Government Code, Chapter 783, http://tlo2.tlc.state.tx.us/statutes/gv.toc.htm ; and the Uniform Grant Management Standards (UGMS), State Uniform Administrative Requirements for Grants and Cooperative Agreements, http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=T&app=9&p_dir=N&p_rloc=111847&p_tloc=&p_ploc=1&pg=2&p_tac=&ti=1&pt=1&ch=5&rl=141 K. PROPERTY ADMINISTRATION – TAC Title 1, Part 5, Chapter 116, http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=3&ti=1&pt=5 L. PUBLICATIONS – ARRA-recipient acknowledges that the United States Department of Education reserves a royalty-free, non-exclusive, and irrevocable license to reproduce, publish, or otherwise use, and authorize others to use, for Federal government purposes: (1) the copyright in any work developed under an award or sub-award; and (2) any rights of copyright to which a ARRA-recipient or Sub-recipient purchases ownership with Federal support. The ARRA-recipient agrees to consult with the U.S. Department of Education regarding the allocation of any patent rights that arise from, or are purchased with, this funding. ARRA-recipient agrees that all publications created with funding under this grant shall prominently contain the following statement: “This Document was prepared under a grant from the United States Department of Education through the Texas Higher Education Coordinating Board using, at least in part, American Recovery and Reinvestment Act funds. Point of view or opinions expressed in the document are those of the authors and do not necessarily represent the official position or policies of U.S. Department of Education or the Texas Higher Education Coordinating Board.” M. DRUG-FREE WORKPLACE -- 34 C.F.R. Section 84 http://www.access.gpo.gov/nara/cfr/waisidx_08/34cfr84_08.html N. BUY AMERICAN ACT – 41. U.S.C. 10a-10d http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+22+0++%28%29%20%20AND%20%28%2841%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%2810a%29%29%3ACITE%20%20%20%20%20%20%20%20%20 O. WHISTLEBLOWER PROTECTION ACT OF 1989 – 5 U.S.C. Section 2302 http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t05t08+179+0++%28%29%20%20AND%20%28%285%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%282302%29%29%3ACITE%20%20%20%20%20%20%20%20%20 P. STATE CONSTRUCTION GUIDELINES - If the planned expenditure of ARRA funds involves modernization, renovation, or repair of existing facilities, final approval must be received from the appropriate agency as specified below and all documentation concerning the approval must be forwarded with the initial application for ARRA funds. For institutions of higher education as defined in 61.003 of the Texas Administrative Code and those agencies not regulated by the Texas Facilities Commission, the approval agency is the Texas Higher Education Coordinating Board. All applications must be submitted in accordance with Title 19, Part 1, Chapter 17 of the Texas Administrative Code, http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=3&ti=19&pt=1 regardless of project cost or scope. For other state agencies, the approval authority is the Texas Facilities Commission, except as specified in Texas Government Code, 2165.007. 2166.003 and 2166.004, http://www.statutes.legis.state.tx.us/?link=GV.

http://www.dhs.gov/xopnbiz/grants/gc_1162481125903.shtm

http://edocket.access.gpo.gov/cfr_2008/julqtr/34cfr80.40.htm

http://tlo2.tlc.state.tx.us/statutes/gv.toc.htm

http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=T&app=9&p_dir=N&p_rloc=111847&p_tloc=&p_ploc=1&pg=2&p_tac=&ti=1&pt=1&ch=5&rl=141

http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=T&app=9&p_dir=N&p_rloc=111847&p_tloc=&p_ploc=1&pg=2&p_tac=&ti=1&pt=1&ch=5&rl=141

http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=3&ti=1&pt=5


http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t41t42+22+0++%28%29%20%20AND%20%28%2841%29%20ADJ%20USC%29%3ACITE%20AND%20%28USC%20w%2F10%20%2810a%29%29%3ACITE%20%20%20%20%20%20%20%20%20







http://www.statutes.legis.state.tx.us/?link=GV

11

EXHIBIT B

ASSURANCES AND CERTIFICATIONS

I, __________________________ (print) as the authorized official of __________________________, hereinafter referred to as the “ARRA-recipient,” certify the following with respect to the expenditure of ARRA-recipient Agreement funds. A. The program shall be conducted and administered in conformity: (a)Title VI of the Civil Rights Act of 1964 (P.L. 88-352) which prohibits discrimination on the basis of race, color, or national origin; (b) Title IX of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, and 1685-1686) which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), which prohibits discrimination on the basis of handicaps (d) The Age Discrimination Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits discrimination on the basis of age; (e) The Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (f) The Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (g) sections 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; (h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.), as amended, relating to nondiscrimination in the sale, rental or financing of housing; and (j) the requirements of any other nondiscrimination statute(s) which may apply to the application. B. ARRA-recipient will comply, or has already complied, with the requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646) which provide for fair and equitable treatment of persons displaced or whose property is acquired as a result of federal or federally assisted programs. These requirements apply to all interests in real property acquired for program purposes regardless of federal participation in purchases. C. As required by Executive Order 12549, Debarment and Suspension, and implemented at 28 C.F.R. Part 67, for prospective participants in primary covered transactions, as defined at 28 C.F.R. Part 67, Section 67.510. (Federal Certification) The ARRA-recipient certifies that it and its principals, contractors and vendors;

1. Are not presently debarred, suspended, proposed for debarment, declared ineligible, sentenced to a denial of Federal benefits by a State or Federal court, or voluntarily excluded from covered transactions by any Federal department or agency; ARRA-recipients can access debarment information by going to www.epls.gov and the State Debarred Vendor List http://www.window.state.tx.us/procurement/prog/vendor_performance/debarred/.

2. Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;

3. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in this certification; and

4. Have not within a three-year period preceding this application had one or more public transactions (Federal, State, or local) terminated for cause or default; and

5. Where the applicant is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application. (Federal Certification).

D. Drug-Free Workplace (ARRA-recipients other than Individuals) - This certification is required by the regulations implementing the Drug-Free Workplace Act of 1988, 34 CFR Part 84. The regulations require certification by ARRA-recipients, prior to award, that they will maintain a drug-free workplace. The certification set out below is a material representation of fact upon which reliance will be placed when THECB determines to award the ARRA-recipient Agreement. False certification or violation of the certification may be grounds for suspension of payments, suspension or termination of grants, or government-wide suspension or debarment (see 34 CFR Part 85, Section 85.615 and 85.620). As the duly authorized representative of the ARRA-recipient, I certify, to the best of my knowledge and belief that the ARRA-recipient will provide a drug-free workplace by:

1. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the ARRA-recipient’s workplace and specifying the consequences and actions that will be taken against employees for violation of such prohibition;

2. Establish an ongoing drug-free awareness program to inform employees about:

(a) The dangers of drug abuse in the workplace,

http://www.epls.gov/

http://www.window.state.tx.us/procurement/prog/vendor_performance/debarred/

12

(b) the ARRA-recipient’s policy of maintaining a drug-free workplace. (c) any available drug counseling, rehabilitation, and employee assistance programs, and (d) the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace.

3. Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (1);

4. Notifying the employee in the statement required by paragraph (1) that, as a condition of employment under the grant, the employee will:

(a) abide by the terms of the statement, and (b) notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no

later than five days after such conviction. 5. Notifying THECB within ten (10) days after receiving notice under subparagraph (4) (b) from an employee or

otherwise receiving actual notice of such conviction; 6. Taking one of the following actions, within thirty (30) days of receiving notice under subparagraph (4) (b), with

respect to any employee who is so convicted;

(a) taking appropriate personnel action against such an employee, up to and including termination, or (b) requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program

approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency;

E. It will comply with the provisions of the Hatch Act, as amended (5 U.S.C. § 1501 et seq.) which limit the political activity of employees whose principal employment activities are funded in whole or in part with Federal Funds. F. Will comply, as applicable, with the provisions of the Davis-Bacon Act (40 U.S.C 276a and 276a-7), the Copeland Act (40 U.S.C 276c and 18 U.S.C. 874), and the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), regarding labor standards for federally assisted construction sub-agreements. G. Will comply, if applicable, with flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (P.L. 93-234) which requires the recipients in a special flood hazard area to participate in the program and to purchase flood insurance if the total cost of insurable construction and acquisition is $10,000 or more. H. Will comply with environmental standards which may be prescribed pursuant to the following: (a) institution of environmental quality control measures under the National Environmental Policy Act of 1969 (P.L. 91-190) and Executive Order (EO) 11514; (b) notification of violating facilities pursuant to EO 11738; (c) protection of wetlands pursuant to EO 11990; (d) evaluation of flood hazards in floodplains in accordance with EO 11988; (e) assurance of program consistency with the approved state management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C 1451 et seq.); (f) conformity of federal actions to State (Clean Air) Implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. 7401 et seq.); (g) protection of underground sources of drinking water under the Safe Drinking Water Act of 1974, as amended (P.L. 93-523); and (h) protection of endangered species under the Endangered Species Act of 1973, as amended (P.L. 93-205). I. Will comply with the Wild and Scenic Rivers Act of 1968 (16 U.S.C 1271 et seq.) related to protecting components or potential components of the national wild and scenic rivers system. J. Will assist the awarding agency in assuring compliance with Section 106 of the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470), EO 11593 (identification, and protection of historic properties), and the Archaeological and Historic Preservation Act of 1974 (16U.S.C. 469a-l et seq.). K. Will comply with P.L. 93-348 and 45 C.F.R., Part 46 regarding the protection of human subjects involved in research, development, and related activities supported by this award of assistance. L. Will comply with the Laboratory Animal Welfare Act of 1966 (P.L. 89-544, as amended, 7 U.S.C. 2131 et seq.) pertaining to the care, handling, and treatment of warm blooded animals held for research, teaching, or other activities supported by this award of assistance. M. Will comply with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4801 et seq.) which prohibits the use of lead based paint in construction or rehabilitation of residence structures. N. Will cause to be performed the required financial and compliance audits in accordance with the Single Audit Act of 1984, as amended, and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

13

O. Will comply with all applicable requirements of all other Federal laws, executive orders, regulations, application guidelines, and policies governing this program. P. The ARRA-recipient certifies federal funds will be used to supplement existing funds, and will not replace (supplant) funds that have been appropriated for the same purpose. ARRA-recipient may be required to supply documentation certifying that a reduction in non-federal resources occurred for reasons other than the receipt or expected receipt of federal funds. ______________________________________ ______________________________ Signature Date ______________________________________ Printed Name, Title, ______________________________________ Institution

14

EXHIBIT C

CERTIFICATION REGARDING LOBBYING FOR

ARRA-RECIPIENT AGREEMENTS, GRANTS, LOANS, AND COOPERATIVE AGREEMENTS

The undersigned, _________________________ (print), as the authorized official of __________________________ certifies the following to the best of his/her knowledge and belief. A. No federal appropriated funds have been paid or shall be paid by or on behalf of the undersigned to any person for influencing or attempting to influence an officer or employee of an agency, a member of Congress, an officer or employee of Congress or an employee of a member of Congress in connection with the awarding of any federal ARRA-recipient Agreement, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement and the extension, continuation, renewal, amendment or modification of any federal ARRA-recipient Agreement, grant, loan or cooperative agreement. B. If any funds other than federal appropriated funds have been paid or shall be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this federal ARRA-recipient Agreement grant, loan or cooperative agreement, the undersigned shall complete and submit standard form Disclosure Form to Report Lobbying form in accordance with its instructions. C. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards including sub-contracts, sub-grants and Program ARRA-recipient Agreements under grants, loans, and cooperative agreements and that all ARRA-recipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31 U.S.C § 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. ______________________________________ ______________________________ Signature Date ______________________________________ Printed Name, Title, ______________________________________ Institution

American Recovery and Reinvestment Act

Application Program Year 2009

Texas Higher Education Coordinating Board

1200 East Anderson Lane Austin, Texas 78752

TO: Texas Public Community/Junior Colleges, Institutions of Higher Education and State Agencies (Applicants) FROM: Texas Higher Education Coordinating Board SUBJECT: Application for the American Recovery and Reinvestment Act – Program Year

2009 Thank you for your interest in the American Recovery and Reinvestment Act (ARRA). ARRA was created to improve the U. S. economy to preserve and create jobs and promote economic recovery, assist those most impacted by the recession, provide investment needed to increase economic efficiency by spurring technological advances in science and health, invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, and stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. These funds are a part of the federal American Recovery and Reinvestment Act, Public Law 111-5. In Texas these funds were awarded to the Governor, who in turn, allocated the funds to State Agencies and other eligible recipients. ARRA funds for the State Fiscal Stabilization Fund-Government Services will be administered by The Texas Higher Education Coordinating Board (THECB). For 2009, THECB is expecting approximately $723 Million for Texas Public Community/Junior Colleges, Institutions of Higher Education and State Agencies (applicants). The due date for The Texas Higher Education Coordinating Board ARRA funds will be October 30, 2009. This document provides the procedures and forms for the Application. Also, forms may be obtained on THECB’s website at http://www.thecb.state.tx.us. Please refer to the 2009 ARRA Guidelines for comprehensive information pertaining to the ARRA funds. If submitting the application by mail, please send it to the physical address below; if by electronic copy please remit to the e-mail address below. Mailed applications must be postmarked on or before October 30, 2009. Electronic submissions must be received on or before October 30, 2009. Any requests for additional information should be addressed to: [email protected] or Mark Zafereo, Interim ARRA Coordinator P. O. Box 12788 Austin, Texas 78711-2788 512/427-6162 TDD/ITT 1-800-735-2988. The Texas Higher Education Coordinating Board is an equal opportunity employer/program. Auxiliary aids and services will be made available upon request to individuals with disabilities.

2009 Application Page 3 of 16 September 30, 2009

Application/Review Checklist

For American Recovery and Reinvestment Act Programs

The following items must be included in the application in the order in which they are listed. Only one application is required from an applicant that is receiving funds for more than one project. Include Sources and Uses of Funds Forms, Budget Justifications and a Narrative for each separate project. All documentation must be placed in the appropriate section. Failure to comply may result in an unnecessary delay of evaluation of the application. If the application is found to be substantially incomplete it will delay the application approval.

For Department Use Only

Complete Incomplete

American Recovery and Reinvestment Act Application

(All pages referenced are in the Application unless otherwise noted)

Application Contents

Applicant Use Initial if complete NA if not applicable

Presentation of Application (*hard copy only) 1. Originals only* 2. Application presented in a three-ring binder with divider tabs* 3. The following documentation must be placed in the immediate front of

the binder:*

a. Application/Review checklist executed by the applicant (required for both hard copy and electronic copy)

Section A - Project Summaries 1. Application Information Form– see page 5 2. Project Information – see page 8 Section B - Employment Form 1. Employment Form – see page 9 Section C - Sources and Uses of Funds Form and Budget Justifications 1. Sources and Uses of Funds Form – see page 11 2. Instructions for the Budget Justifications -see page 11 a. Capital Outlay 1. Type and description (see Guidelines) 2. Itemized price/value listing for new purchases (See

Guidelines)

b. Working Capital 1. Description (see Guidelines.) c. Engineering/Architectural Services 1. Description of services and related costs (See Guidelines) 2. Name of individual/firm who prepared the justification, date of

preparation and engineer’s seal. (See Guidelines)


For Department Use Only

Complete Incomplete

American Recovery and Reinvestment Act Application

(All pages referenced are in the Application unless otherwise noted)

Application Contents

Applicant Use

Initial if

complete NA if not

applicable d. Building Construction/Rehabilitation 1. Size of building and specifications (See Guidelines) 2. Itemized material/construction activity costs (See Guidelines) 3. Description of construction/rehabilitation activities (see

Guidelines)

4. Labor costs must include Davis-Bacon wage (if ARRA funded) (see Guidelines)

5. Architectural and/or engineering costs and name of individual/firm (see Guidelines

6. Compliance with all State construction requirements (see Guidelines)

Section D - Narrative 1. Description of Proposed ARRA Project – explain how your

proposal/project will be used to meet an eligible use of funds for ARRA, P.L. 111-5. (See page 5 of the Guidelines).

2. Management of the Institution 3. Resumes (Must include a resume for the management team including

personnel responsible for proposal/project funds).

Section E - Applicant Representations and Forms 1. Institution/Agency Resolution (see page 13) 2. Executed Certifications a. Certification Regarding Lobbying for ARRA-recipient Agreements,

Grants, Loans, and Cooperative Agreements (see page 14)

Section F - Applicant Financials and Budget 1. Most recent audited financial statement 2. Current year fiscal operating budget w/resolution adopting the budget Section G – Optional 1. Provide a copy of the expenditure plan for the ARRA funds submitted

to the Governor’s office September 30, 2009.

I, as an applicant for the American Recovery and Reinvestment Act of 2009 funds to the Texas Higher Education Coordinating Board, certify that the information, exhibits, and schedules contained herein are true and accurate statements, and represent fairly the financial condition as of the date stated herein:

Applicant Typed or Printed Name Signature Business Title Date


APPLICATION INFORMATION FORM TRACKING #

SEC

TIO

N

A

APPLICANT INFORMATIONApplicant Name 11 Digit Texas I.D. #

PHYSICAL ADDRESS Street Address (No P.O. Box)

City

State

Zip

County

MAILING ADDRESS P.O. Box

City

State

Zip

County

Short Description of Project:

SEC

TIO

N

B

AUTHORIZED SIGNATOR First Name

M. I.

Last Name

Primary Phone ( ) - Ext.

Secondary Phone (optional) ( ) - Ext.

Fax (optional) ( ) - Ext.

E-mail address required

Would you prefer to be contacted by E-mail? Yes No

MAILING ADDRESS Address

City

State

Zip

County


SEC

TIO

N

C

POINT OF CONTACT Mr. Mrs. Ms. ___

First Name

M. I.

Last Name

Title: Primary Phone ( ) - Ext. Applicant name



E-mail


MAILING ADDRESS Address

City

State

Zip

County

SEC

TIO

N

D

FINANCE DIRECTOR Mr. Mrs. Ms. ___

First Name

M. I.

Last Name

Title

Primary Phone ( ) - Ext.



E-mail


MAILING ADDRESSAddress

City

State

Zip

County


SE

CTI

ON

E

LEGISLATIVE NOTIFICATION INFORMATION DISTRICT NUMBERS U. S. Representative District # telephone numbers: Washington Off- Regional Off-

U. S. Senator

telephone numbers: Washington Off- Regional Off-

State Senator

telephone numbers: Austin Off- Regional Off-

State Representative

telephone numbers: Austin Off- Regional Off- State Representative


State Representative


SEC

TIO

N F

JOB CREATION INFORMATION Total number of jobs projected to be created

Total number of jobs projected to be retained

SEC

TIO

N

G

SIGNATURES The applicant, by and through their signatures below (1) certify that all information provided in connection with this application at any time is true and correct to the best of their knowledge; (2) acknowledge that any misrepresentation or false statement made in connection with this application, whether intentional or not, will constitute grounds for denial, pursuant to this application and/or assessment of monetary administrative penalties, and (3) that the applicant has registered for and received a DUNS number, has registered on Central Contractor Registration (www.ccr.gov) and at www.federalreporting.gov. If signed by an agent (including employee) of the applicant, the person signing certifies that he or she is authorized to make the preceding certifications. Authorized Signator (Printed Name)

Applicant Signature Date / / Month day year


PROJECT INFORMATION

Fill in the blanks and provide extra sheets where necessary. 1. Is your institution/agency behind on any payments to the federal government?

Yes No If yes, provide an explanation:

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. Has your institution/agency previously received awards from The Texas Higher Education Coordinating Board?

Yes

No

If yes, please list awards received in the past two years from THECB:_________________________________________________________________________________________________________________________________________________ ____________________________________________________________________________ 3. Are there sufficient other funds (except as requested in this application) to support this

project? Yes

No


Employment Projections Form Applicant Name INSTITUTION/AGENCY INFORMATION 1. Number of current employees

2. Please describe the CURRENT jobs this activity proposes to retain . JOB CATEGORY / GROUP

(see Appendix A for category definitions) #Full

Time #Part

Time AVG

ANNUAL WAGE

A. Officials and Managers B. Professionals C. Technicians D. Sales E. Office and Clerical F. Craft Worker (skilled) G. Operatives (semi-skilled) H. Laborers (unskilled) I. Service Workers TOTALS: 3. Please describe the NEW jobs this activity proposes to create JOB CATEGORY / GROUP

(see Appendix A for category definitions) #F/T #P/T AVG

ANNUAL WAGE

A. Officials and Managers B. Professionals C. Technicians D. Sales E. Office and Clerical F. Craft Worker (skilled) G. Operatives (semi-skilled) H. Laborers (unskilled) I. Service Workers TOTALS: 4. How was the level of new jobs determined? Please explain in detail.

Full-Time must be 40 hrs. or more per week 2,080 hours annually. All wages must be converted to an annual basis.


For Office Use Only:

SOURCES AND USES OF FUNDS

INSTRUCTIONS

The Sources and Uses of Funds form displays the total budget for all proposed activities and provides the total projected expenditures for the ARRA contract period. Review the program requirements for the following items: budget justifications, eligible uses of funds, and ineligible uses of funds. NOTE: Funds and costs, as outlined on the Sources and Uses of Funds form, may not be spent or

incurred prior to a contract award date from THECB. All dollar amounts should be rounded to the nearest one hundred dollars ($100).

2009 Application Page 12 of 16 August 27, 2009

Sources and Uses of Funds Form

Applicant Name

Activity ARRA

Funding State Funding Institution’s Funding Other Sources Funding TOTAL

$ Source $ Source $ Source $ $ 1. Machinery and

Equipment

2. Construction 3. Working Capital 4. Sub-Total 5. TOTAL

NOTE: All dollar amounts should be rounded to the nearest one hundred dollars ($100) The project amounts, both ARRA and all other amounts, specified above will be used as the basis for the project amounts identified in the award and contract. Frequently, there are costs and/or expenses in addition to those detailed above. Budget Justifications - This information should justify all proposed project costs, including that portion proposed to be paid by the ARRA funds. This information should be included as a part of the application, behind the Sources and Uses of Funds Form for supporting information. Projects must include detailed information of all dollar amounts listed on the Sources and Uses of Funds form. Note: The detail must show the breakdown for each line item. Funds must be delineated by source and use. This must include all major parts of the project, such as machinery and equipment, construction, and working capital. Source information must include which entity is paying/providing funding for these activities. Provide the following documentation to substantiate all project costs, as outlined on the Sources and Uses of Funds Form, which will be incurred/expended upon receipt of an ARRA contract award. No changes to activities and/or budget line items listed in the application will be allowed before a contract is executed. 1. If the project includes ARRA or other funds for machinery and equipment provide:

a. Type and description of equipment; b. Itemized price/value list per piece of equipment.

2. If the project includes ARRA or other funds for construction provide: a. Description of architectural/engineering services and related costs; b. material/construction activity costs; and, c. Labor costs-must include Davis-Bacon wages (if ARRA funds are used for construction). 2. If the project includes funds for working capital, provide:

a. Employee salaries (for new and retained employees); b. Operational costs

2009 Application Page 14 of 16 August 27, 2009

INSTITUTION/AGENCY RESOLUTION SAMPLE

An original or certified original resolution by the institution/agency’s governing body authorizing the submission of an application for ARRA funds from the THECB must be included in the application. The resolution must contain a reference to the specific activity for which the institution is requesting funds.

SAMPLE RESOLUTION NO. xxxx

A RESOLUTION APPROVING AN APPLICATION FOR FUNDING THROUGH THE TEXAS HIGHER EDUCATION COORDINATING BOARD

FOR AMERICAN RECOVERY AND REINVESTMENT ACT FUNDS BE IT RESOLVED by the Board of Institution/Agency’s Name as follows: SECTION 1. The Board has reviewed and hereby approves an application for: (list activities, and dollar amount) Creation of two new FTEs for new program $100,000 Retention of one FTE for existing program $ 50,000 Capital outlay for computer upgrades that were not funded in the budget $ 25,000 Working capital for rent of an additional building for new program not in the budget $ 60,000 TOTAL $235,000 SECTION 2. The Authorized authority has reviewed and hereby agrees to comply with all Certifications and Assurances executed in connection with the application and, if funded, the award. SECTION 3. The Title of Authorized Signator is hereby authorized and directed to act on the Board’s behalf in all matters pertaining to this application, and if approved, the contract.

PASSED AND ADOPTED at a regular meeting of the Authorized Body of the Name of the Institution/Agency

held on , 2009 by the following vote:

AYES: NAYS: ABSENT:____

ATTEST:_______________________________________ (Title of Authorized Signator) (Title of Attester and Applicant Name)

_______________________________________________ Signature of Authorized Signator Name of Institution/Agency_______________________________


CERTIFICATION REGARDING LOBBYING FOR ARRA-RECEIPIENT AGREEMENTS, GRANTS, LOANS,

AND COOPERATIVE AGREEMENTS

The undersigned, _________________________ (print), as the authorized official of __________________________ certifies the following to the best of his/her knowledge and belief: A. No federal appropriated funds have been paid or shall be paid by or on behalf of the undersigned to any person for influencing or attempting to influence an officer or employee of an agency, a member of Congress, an officer or employee of Congress or an employee of a member of Congress in connection with the awarding of any federal Sub-recipient agreement, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement and the extension, continuation, renewal, amendment or modification of any federal Sub-recipient agreement, grant, loan or cooperative agreement. B. If any funds other than federal appropriated funds have been paid or shall be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this federal Sub-recipient Agreement grant, loan or cooperative agreement, the undersigned shall complete and submit standard Disclosure Form to Report Lobbying form in accordance with its instructions. C. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards including sub-contracts, sub-grants and Program Sub-recipient agreements under grants, loans, and cooperative agreements and that all Sub-recipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31 U.S.C § 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. ______________________________________ ______________________________ Signature Date ______________________________________ Printed Name, Title, ______________________________________ Institution/Agency


Appendix A Job Category/Group Definitions

Officials and Managers - Occupants requiring administrative personnel who set broad policies, exercise overall responsibility of execution of these policies, and individual departments or special phases of a firm’s operations. This includes: Officials, Executives, middle management, plant managers and superintendents, salaried supervisors who are members of management, purchasing agents and buyers, and kindred workers. Professional - Occupants requiring either college graduation or experience of such kind and amount as to provide a comparable background includes: accountants and auditors, airplane pilots and navigators, architects, artists chemists, designers, dietitians, editors, engineers, lawyers, librarians, mathematicians, natural scientists, registered professional nurses, professional and labor relations workers, physical scientists, physicians, social scientists, teachers, and kindred workers. Technicians - Occupants requiring a combination of basic scientific knowledge and manual skill which can be obtained through about 2 years of post-high school education such as is offered in many technical institutions and junior colleges, or through equivalent on the job training. This includes: computer programmers and operators, drafters, engineering aides, junior engineers, mathematic aides, licensed practical or vocational nurses, photographers, radio operators, scientific assistants, surveyors, technical illustrators, technicians (medical, dental, electronic, physical science) and kindred workers. Sales - Occupants engaging wholly or primarily in direct selling. This includes: advertising agenda and sales workers; insurance agents and brokers; real estate agents and brokers; sales workers; demonstrators and retail sales workers; and sales clerks, grocery clerks and cashiers; and kindred workers. Office and Clerical - Includes all clerical-type work regardless of level of difficulty, where the activities are predominantly non-manual though some manual work not directly involved with altering or transporting the products is included. This includes: bookkeepers, cashiers, collectors (bills and accounts), messengers and office helpers, office machine operators, shipping and receiving clerks, stenographers, typists, and secretaries, telegraph and telephone operators, and kindred workers. Craft Worker (skilled) - Manual workers of relatively high level having a thorough and comprehensive knowledge of the processes involved in their work. Exercise considerable independent judgment and usually receive an extensive period of training. This includes: the building trades, hourly paid supervisors and lead operators (who are not members of management), mechanic and repairers, skilled machining occupations, compositors and typesetters, electricians, engravers, job setters (metal), motion picture projectionists, pattern and model makers, stationary engineers, tailors, and kindred workers. Operatives (semi-skilled) - Workers who operate machines or other equipment or perform other factory-type duties of intermediate skill level which can be mastered in a few weeks and require only limited training. This includes: apprentices (auto mechanics, plumbers, electricians, machinists, mechanics, building trades, metal working trades, printing trades, etc.), operatives, attendants (auto service and parking), blasters, chauffeurs, delivery workers, dress makers and sewers (except factory), dryer’s furnaces workers, heaters (metal), laundry and dry cleaning, operatives, milliners, mine operatives and laborers, motor operators, oilers and greasers (except auto), painters (except construction and maintenance), photographic process workers, boiler tenders, truck and tractor drivers, weavers (textile), welders and flame metals workers, and kindred workers. Laborers (unskilled) - Workers in manual occupations which generally require no special training perform elementary duties that may be learned in a few days and require the application of little or no independent judgment. This includes: garage laborers; car washers and greasers; gardeners (except farm) and ground keepers; stevedores; wood choppers; laborers performing lifting, digging, mixing, loading, and pulling operations; and kindred workers. Service Workers - Workers in both protective and non-protective service occupations. This includes attendants (hospital and other institutions, professional and personal service, including nurse’s aides and orderlies), barbers, chair workers and cleaners, cooks (except household), counter and fountain workers, elevator operators, firefighters and fire protection guards, door keepers, stewards, janitors, police officers and detectives, porters, waiters and waitresses, and kindred workers.

2009 Guidelines Page 1 of 21 October, 2009

American Recovery and Reinvestment Act

Guidelines Program Year 2009


Texas Higher Education Coordinating Board 1200 East Anderson Lane Austin, Texas 78752 OVERVIEW OF THE TEXAS HIGHER EDUCATION COORDINATING BOARD’S AMERICAN RECOVERY AND REINVESTMENT ACT APPLICATION The American Recovery and Reinvestment Act (ARRA) was created to improve the U. S. economy to preserve and create jobs and promote economic recovery, assist those most impacted by the recession, provide investment needed to increase economic efficiency by spurring technological advances in science and health, invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, and stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. The ARRA program is administered by the Texas Higher Education Coordinating Board (THECB) through an agreement with the Office of the Governor. This document serves as a reference guide for the Texas Higher Education Coordinating Board’s American Recovery and Reinvestment Act Application. Federal regulations governing the program are found at PL 111-0005. Texas state rules governing the program are found in E.O. RP 72. All documentation submitted in the application and for a subsequent award is subject to the Open Records Request Act. The Application and any requests for additional information should be addressed to: [email protected] or Mark Zafereo, Interim ARRA Coordinator P. O. Box 12788 Austin, Texas 78711-2788 512/427-6162 TDD/ITT: 800/735-2988. The Texas Higher Education Coordinating Board is an equal opportunity employer/program. Auxiliary aids and services will be made available upon request to individuals with disabilities.



Table of Contents Section 1 General program information

Pages 4 – 11 Section 2 Application preparation information

Pages 12 - 14 Section 3 Information to know if an application is approved.

Pages 15-16 Appendices

Pages 17-21 Index

Page 22


SECTION 1 General Program Information Information to know before preparing to submit an application. Applicants - Eligible applicants are, Institutions of Higher Education as defined in section 61.003 of the Texas Education Code including Texas Public Community/Junior Colleges, and State Agencies. Applicant Performance Threshold Requirements – An applicant must meet all of the following requirements in order for its application to be considered: 1. Demonstrate that the proposed projected is eligible to be funded under the American

Recovery and Reinvestment Act, Public Law 111-5. 2. Demonstrate the financial management capacity to operate and maintain improvements made in

conjunction with the proposed project. 3. Demonstrate satisfactory performance on prior and existing THECB contracts (if applicable) and

resolve all outstanding compliance and audit findings related to previous THECB awards. Application Dates - The due date for The Texas Higher Education Coordinating Board ARRA funds will be October 30, 2009. All applications shall be submitted to THECB at the address listed on page 2 of the Program Guidelines. Only one copy of the application should be submitted. THECB will only accept applications on or before the date identified in this section. Application Process - After the application deadline, analysis is performed, and a contract is negotiated with the applicant. 1. Each applicant must submit a complete application to THECB. No changes to the application will be

allowed after the application deadline date, unless they are a result of THECB recommendations. 2. Applications are then reviewed for completeness. The applicant will be notified of any deficiencies

and given 10 business days to rectify all deficiencies. An application containing an excessive number of deficiencies, or deficiencies of a material nature may be required to be restructured. Material deficiencies are items such as missing financial information, etc. In the event a determination is made that an application contains activities that are ineligible for funding, the application may be restructured. .

3. Each complete application is assessed for:

A. The financial feasibility of the project; B. Whether the use of ARRA funds is appropriate to carry out the project proposed in the

application; C. Whether there is evidence that tuition and fees did not increase for in-state students or were

lowered as a result of ARRA funds; D. Whether there is evidence that permanent jobs will be created or retained; and E. The strength of commitments from all other public and/or private investments identified in the

application; 4. A project report is prepared. The need to negotiate some elements of the application that ultimately

would be in the ARRA contract may be initiated. A recommendation to THECB’s Board is then made if necessary.


5. If required, the Board reviews the recommendation and, if approved, an award letter is sent to the

applicant. 6. Contracts will be drafted and then reviewed prior to being mailed to award recipients. Upon receipt,

the award recipient has 30 days to review and execute both copies. Once returned to THECB, the contract will be executed by the Commissioner and a single copy is returned to the ARRA-recipient.

7. The ARRA contract must be based on the information provided to THECB that resulted in the award. 8. No funds or reimbursable expenses may be expended or incurred, prior to the execution of the

contract. Application Time Lines - The following is a summary of the normal time line for processing ARRA applications to the point of award: 1. Applications are reviewed for completeness and eligible uses of funds. If any applications are found to have deficiencies or need additional clarification, a letter will be sent to the applicant identifying the deficiencies and/or questions. Ten working days will be given for a response. Failure to respond may result in the application being required to be restructured. 2. Upon satisfactory receipt of the deficiency responses, the completed application will be reviewed to determine feasibility. 3. If a determination is made that the application is eligible and feasible, recommendation is made to the authorized THECB authority as appropriate. 4. Upon action by the authorized authority, award or decline letters are mailed to the applicant. Generally the total time frame for approvals is 60-70 days. Contracts are generally mailed out within 2–3 weeks after approval. Note: Any extensions or delays due to deficiency responses and negotiations will extend the time line. Board – The Texas Higher Education Coordinating Board. Conflict Of Interest - Under the federal conflict of interest provisions, no persons who exercise or have exercised any function or responsibilities, with respect to ARRA activities, or who are in a position to participate in a decision making process, or gain inside information regarding ARRA activities, may obtain a financial interest or benefit from the activity, or have interest in any contract, subcontract, or agreement, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during their tenure, or for one year thereafter. These conflict of interest provisions apply to any person who is an employee, agent, consultant, officer, or elected official of the State, or of a unit of general local government, or of any designated public agencies, or ARRA-recipients that are receiving ARRA funds. Under these provisions, a conflict of interest would exist if an employee, elected official, or their family members receive benefit from an activity. Construction Projects – An applicant that uses federal funds for a construction project must follow federal as well as state statutes, rules, regulations, and guidelines during the environmental, design, review, procurement and construction phases of the award. NOTE: Institutions of Higher Education will be prohibited from using ARRA funds for modernization, renovation or repairs. Environmental Review – The use of ARRA funds triggers the need for an environmental review using the National Environmental Protection Act (NEPA) guidelines. See pg. 5, below, and visit the following website for guidance: http://www.access.gpo.gov/nara/cfr/waisidx_07/40cfr1501_07.html



Engineer/Architectural - These are costs related to the design/oversight/review activities for construction of buildings and/or infrastructure improvements. Engineers/Architects must be procured using an RFP and a Professional Services Contract must be in place with the selected firm and the applicant before funds can be used to pay for professional services and funds can be used to pay for construction. See pg. 13, below. Texas Department of Licensing and Regulations - State law requires that all projects involving any public building, as defined by Texas Government Code, Chapter 469, construction activities, regardless of source of funding, will be in compliance with the requirements concerning the elimination of architectural barriers encountered by persons with disabilities. The plans and specifications for construction activities involving public buildings must be submitted to the Texas Department of Licensing and Regulation (TDLR) for review, as required by the Texas Architectural Barriers Act, see pg. 15, below. Davis-Bacon Labor Standards - A construction project covered by federal labor standards requires a series of specific actions by labor standards personnel prior to the actual start of construction. See pg. 13 below, Labor Standards. STEP 1 Designate a Labor Standards Officer for the Project STEP 2 Obtain an applicable Wage Decision for the project STEP 3 Include the wage decision (and any modifications) in the bid documents. STEP 4 Ensure that the wage decision is current 10 days before bid opening. STEP 5 Check the proposed prime construction contractor for eligibility status. STEP 6 Award the construction contract. STEP 7 Hold a preconstruction conference to explain labor standards. STEP 8 Submit the Start of Construction Notice to THECB. STEP 9 Review project payrolls during construction. STEP 10 Submit construction completion reports. Procurement - Procurements of equipment, non-professional services, and construction contracts whose total cost is more than $50,000 must formally advertise for sealed bids in a newspaper of general circulation and hold a public bid opening. Step-by-Step Bidding Procedures STEP 1 Prepare the Bid Package STEP 2 Comply with Davis-Bacon Act requirements; See Davis-Bacon Labor Standards for specific

information on these requirements. STEP 3 Advertise for Bids STEP 4 Promote participation of Minority Business Enterprises STEP 5 Hold the Bid Opening STEP 6 Clear the Contractor and the Sub-contractors STEP 7 Award the contract STEP 8 Execute the Contract.

State Guidelines - If the planned expenditure of ARRA funds involves modernization, renovation, or repair of existing facilities, final approval must be received from the appropriate agency as specified below and all documentation concerning the approval must be forwarded with the initial application for ARRA funds. Depending on project type, approval may be required from numerous state and federal agencies. In the event additional approvals are required by any state or federal law, policy, or statute, it is the applicant’s responsibility to identify and secure appropriate approvals from these entities prior to the ARRA application and to provide the THECB with copies of these approvals with the initial ARRA application. THECB staff will review the submitted information and return incomplete applications without action.

For institutions of higher education as defined in 61.003 of the Texas Administrative Code and those agencies not regulated by the Texas Facilities Commission, the approval agency is the Texas Higher


Education Coordinating Board. All applications must be submitted in accordance with Title 19, Part 1, Chapter 17 of the Texas Administrative Code, http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=3&ti=19&pt=1 regardless of project cost or scope.

For other state agencies, the approval authority is the Texas Facilities Commission, except as specified in Texas Government Code, 2165.007. 2166.003 and 2166.004, http://www.statutes.legis.state.tx.us/?link=GV Contractor - An applicant that receives an award from THECB. Contracts - If an applicant is approved for funding it will need to enter into a contract with THECB to complete the project. The contract is intended to ensure a complete understanding of the project, the expected number of jobs to be created or retained, the sources and uses of all funds committed to the project, the reporting requirements the applicant has to THECB, and all other obligations of the applicant and THECB. Dates - Various dates are used and referred to in these guidelines and the contract an applicant ultimately enters into when its application is approved. Below are definitions of these dates.

Application due date - This is the last day that applications may be submitted. Award date - This is the day the contract between THECB and the applicant is executed by both

parties. For the purpose of this document, Award Date and Execution Date are interchangeable. Contract commencement/execution/start date - This is the beginning date of the contract period.

It is also the same date as the award date. Contract end/expiration date - This is the date by which the project activities should be

completed. Closeout date - After all project activities have been satisfactorily completed, a contract closeout

letter will be issued. Closeout is effective the date identified in the letter. Data Universal Numbering System (DUNS) Number – All benefiting applicants must provide their DUNS number. If an applicant does not have a DUNS number, they will need to call the dedicated toll-free DUNS number request line at 1-866-705-5711 to obtain the number. The process is free and takes an average of ten (10) minutes. Additional information can be obtained at: http://www.whitehouse.gov/government/fbci/duns-number.html. Jobs - The points below provide an overview of the key requirements and supplemental guidance on reporting the employment impact to THECB for the ARRA. Prime recipients (THECB) are required to report to the federal government, an estimate of jobs directly created or retained by project and activity or contract. ARRA-recipients will be required to report to THECB an aggregate number for the cumulative jobs created or retained for the month in a numeric field. ARRA-recipients will also be asked to provide to THECB a narrative description of the employment impact in a text field. A job created is a new position created and filled or an existing unfilled position that is filled as a result of the ARRA; a job retained is an existing position that would not have been continued to be filled were it not for ARRA funding. A job cannot be counted as both created and retained. Also, only compensated employment in the United States or outlying areas should be counted. See 74 FR 14824 for definitions. The estimate of the number of jobs required by the ARRA should be expressed as ―full-time equivalents‖ (FTE), which is calculated as total hours worked in jobs created or retained divided by the number of hours in a full-time schedule, as defined by the recipient (see below for more information). The FTE estimates must be reported cumulatively each month. Recipients of grants, cooperative agreements, and loans made by an ARRA-recipient must include in the aggregate number and their narrative description an estimate of jobs created and retained on projects and activities managed by their funding recipients.


http://www.statutes.legis.state.tx.us/?link=GV

http://www.whitehouse.gov/government/fbci/duns-number.html


ARRA-recipients or their recipients/vendors should not attempt to report on the employment impact on materials suppliers and central service providers (so-called ―indirect‖ jobs) or on the local community (―induced‖ jobs). Employees who are not directly charged to ARRA supported projects/activities, who, nonetheless, provide critical indirect support, e.g., clerical/administrative staff preparing reports, institutional review board staff members, departmental administrators, are NOT counted as jobs created/retained. ARRA-recipients shall report only direct jobs. The narrative should include a brief description of the types of jobs created or retained. This description may rely on job titles, broader labor categories, or the ARRA-recipient’s existing practice for describing jobs as long as the terms used are widely understood and describe the general nature of the work. ARRA-recipients will report for all projects and activities or federally awarded contracts regardless of whether they are funded in whole or in part by the ARRA, but should report only on the jobs and funding attributable to an award under the ARRA. The requirement for reporting jobs is based on a simple calculation used to avoid overstating the number of other than full-time, permanent jobs. This calculation converts part-time or temporary jobs into ―full-time equivalent‖ (FTE) jobs. In order to perform the calculation, an ARRA-recipient will need the total number of hours worked that are funded by the ARRA. The ARRA-recipient will also need the number of hours in a full-time schedule for a month. Example: Assume that an ARRA-recipient is preparing its first monthly report and that the ARRA-recipient’s ARRA funded work required two full-time employees and one part-time employee working half days for the month. Also assume that the ARRA-recipient’s full-time schedule for the month is 173.3 hours (2080 hours in a work-year divided by 12). To convert hours worked to number of FTE for the first monthly report, aggregate all hours worked and divide by the number of hours in a full-time schedule for the month. In this example, full-time hours worked (173.3 hrs x 2 employees = 346.67 hrs) + part-time hours worked (86.67 hrs) ÷ number of hours in a full-time schedule for the month (173.3 hrs) = 2.5 FTE reported in the first monthly report. Because jobs are reported cumulatively each month, this same number of FTEs would be reported for the second month if the same number of employees worked the same number of hours. Reporting is cumulative across the project lifecycle, and will not reset at the beginning of each calendar or fiscal year. In the example above, the 2.5 FTEs reported in the first monthly report will stay the same through the project lifecycle, assuming the same number of employees work the same number of hours. An alternative calculation based on the allocable and allowable portion of activities expressed as a percentage of the total is acceptable for recipients of assistance agreements that must comply with OMB Circular A-21, Cost Principles for Educational Institutions. OMB Circular A-21 recognizes that practices vary among educational institutions as to the activity constituting a full workload. Compensation charged to sponsored projects must conform to the institution’s established policies and reasonably reflect the activity for which the employee is compensated. Charges to sponsored projects may be expressed as a percentage of their total activities. Therefore, for purposes of ARRA reporting of jobs created or retained, colleges and universities may count, proportionately, the percentage of effort directly charged to ARRA awards as an FTE equivalent. For example - A faculty member charging 50% effort on an ARRA award will be counted as .5 FTE. Hourly and part time employees shall be calculated based on actual hours worked on the sponsored agreement and the institution’s definition of a full workload for employment. The total hours reported may include paid leave. Job Category/Group Definitions: Jobs created/retained must be described or defined by specific categories/groups. Here is the list of major categories/groups: Officials and Managers, Professionals,


Technicians, Sales, Office and Clerical, Craft Worker (skilled), Operatives (semi-skilled), Laborers (unskilled) and Service Workers. These categories/groups must be used and ARRA-recipients may not add to or substitute other categories/groups. A more detailed description or definition of the types of jobs that fall into these categories is contained in Appendix A of the Guidelines or Appendix A of the Application. Jobs Retained: In order to consider jobs retained as a result of ARRA assistance, an applicant must submit documentation showing clear and objective evidence that permanent jobs will be lost without ARRA assistance. For these purposes, clear and objective evidence that jobs will be lost must include 1 or 2:

1. Evidence that the applicant has issued a notice to affected employees or made a public announcement to that effect, or

2. Analysis of relevant financial records which clearly and convincingly shows that the applicant is likely to have to cut back employment in the near future without the planned intervention, and that some or all of the employees will be permanently laid off.

Liability In the event of a failure to expend funds as authorized by ARRA, THECB’s standard policy may require an ARRA-recipient to reimburse THECB for the number of jobs not created or retained. Other penalties may apply as well. Project Length - Projects must be completed and all requirements of the ARRA contract must have been met within one (1) year from the award date of the ARRA contract. Use of Funds - SEC. 14002 STATE USES OF FUNDS. (b) OTHER GOVERNMENT SERVICES.— (1) IN GENERAL.—The Governor shall use 18.2 percent of the State’s allocation under section 14001 for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation, or repair of public school facilities and institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system. (2) AVAILABILITY TO ALL INSTITUTIONS OF HIGHER EDUCATION.— A Governor shall not consider the type or mission of an institution of higher education, and shall consider any institution for funding for modernization, renovation, and repairs within the State that— (A) qualifies as an institution of higher education, as defined in subsection 14013(3); and (B) continues to be eligible to participate in the programs under title IV of the Higher Education Act of 1965. SEC. 14004.USES OF FUNDS BY INSTITUTIONS OF HIGHER EDUCATION. (a) IN GENERAL.—A public institution of higher education that receives funds under this title shall use the funds for education and general expenditures, and in such a way as to mitigate the need to raise tuition and fees for in-State students, or for modernization, renovation, or repair of institution of higher education facilities that are primarily used for instruction, research, or student housing, including modernization, renovation, and repairs that are consistent with a recognized green building rating system. (b) PROHIBITION.—An institution of higher education may not use funds received under this title to increase its endowment. (c) ADDITIONAL PROHIBITION.—No funds awarded under this title may be used for— (1) the maintenance of systems, equipment, or facilities;


(2) modernization, renovation, or repair of stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public; or (3) modernization, renovation, or repair of facilities. (A) used for sectarian instruction or religious worship; or (B) in which a substantial portion of the functions of the facilities are subsumed in a religious mission. Reporting For reporting purposes and to track funds and related job creation/retention, ARRA monies are limited to the payment of the following elements of cost: working capital, construction funds and purchase of machinery and equipment. WORKING CAPITAL

Employee salaries (for new and retained employees); Operational costs.

REAL ESTATE IMPROVEMENTS are for the sole occupancy and use of the applicant and are not intended to be leased or subleased to other entities. They must be owned by the applicant. Uses include:

Construction of buildings and/or site improvements. Rehabilitation of existing building(s). Construction of infrastructure improvements on the project site.

Note: Buildings must be fully enclosed by permanent walls and a roof.

MACHINERY AND EQUIPMENT

Type and description of equipment; Itemized price/value list per piece of equipment.

Justifications for the use of funds must be spelled out in the application in the Statement of Work and in the budget justifications. ARRA monies are to reimburse an ARRA-recipient for eligible expenditures they have made or incurred, rather than be advance payments. These reimbursements will be only for work actually completed. ARRA monies are available to reimburse ARRA-recipients, when they are in compliance with the terms of their THECB contract. Failure to comply with the terms of the THECB contract does not relieve the ARRA-recipient of its liability to pay its Sub-contractors/Vendors. Ineligible Uses – The applicant may not use ARRA funds for the operation of intercollegiate athletics or other uses proscribed by Sections 14003 and 14004 of the ARRA.


SECTION 2 Application Preparation Information Information to know while preparing an application. The Application contains a checklist which itemizes what documentation must be included in the application and the order in which it must be presented.

Note: All fields must be filled on all pages of the Application Information Form. Budget Justifications - This information should justify all proposed project costs, including that portion proposed to be paid by the ARRA funds. Projects must include detailed information of all dollar amounts listed on the Sources and Uses of Funds form. Note: The detail must show the breakdown for each line item. Amounts must be rounded to nearest one hundred dollars ($100) increment. Funds must be delineated by source and use. This must include all major parts of the project, such as capital outlay, construction funding and working capital. Source information must include which entity is paying/providing funding for these activities. Provide the following documentation to substantiate all project costs, as outlined on the Sources and Uses of Funds form, which will be incurred/expended upon receipt of an ARRA contract award. No changes to activities and/or budget line items listed in the application will be allowed before a contract is executed. 1. If the project includes funds for working capital, provide:

a. Employee salaries (for new and retained employees); b. Operational costs.

2. If the project includes funds for construction, provide: a. Plans and specifications, including size of building, construction materials; b. Itemized material costs; c. Labor costs, a statement indicating whether Davis-Bacon wage rates will apply to the project and

whether or not these wage rates were taken into consideration in determining construction costs. Contact THECB for additional information on the Davis-Bacon Act;

d. Architectural/engineering costs (pre-engineered metal buildings require an engineer oversight); and

e. Name of the individual or firm who prepared the justification and the date of preparation (3rd party preparer generally required).

Note: All projects involving any building construction activities, regardless of source of funding, must ensure that building plans and specifications be submitted to the Texas Department of Licensing and Regulation for review, as required by the Texas Architectural Barriers Act. See the ADA/Architectural Barriers Act (page 16) for more information.

3. If the project includes funds for machinery and equipment (M&E), provide:

a. Type and description of equipment; b. Itemized price/value list per piece of equipment. .

If an application for funding is approved, the ARRA-recipient is responsible for administering the award. This normally includes the following general areas: record keeping; special conditions; monthly reports; jobs documentation; close out; and audit. It does not include application preparation costs.


Employment Projections Form - The purpose of this form, in the application, is to provide additional detail with regard to the total number of jobs projected to be created and/or retained. Enter the name of the Applicant.

1. Enter the requested information pertaining to the applicant. 2-3. Enter the following information in the space provided.

# of Jobs - enter the total number of full-time and part-time jobs for each job type group/category provided. Do not add other job groups. Be sure to provide a total. See Appendix A in the for job group/category definitions. Annual Wage - enter the average annual wage for jobs in each group/category listed. In cases where wage ranges are paid by the applicant, the lowest wage within the range should be used when calculating the average.

4. Describe how the level of new jobs was determined and explain in detail. Engineering/Architectural - These are costs related to the oversight/review activities for construction of buildings and/or infrastructure improvements, especially related to activities proposed to be paid by the ARRA. Only those costs incurred after the contract execution date may be reimbursed by THECB. False Information - those instances where it is determined that an applicant, or its agent, provided false information for the purpose of improving its chance for approval the ARRA applicant: 1. May be liable for full and immediate repayment of ARRA funds released, if the false information

resulted in the project being funded. 2. The applicant will be ineligible to apply for any funding offered by THECB for a period of two program

years or until any issue of restitution is resolved, whichever is longer. 3. If false information is discovered during the review process, the application will be deemed ineligible. False information may include: 1. Knowingly make a false entry in, or false alteration of, a government record; 2. Make, present, or use any item, record or document with knowledge of its falsity and with intent that it

be taken as a genuine governmental record; or 3. Intentionally destroy, conceal, remove, or otherwise impair the verity, legibility, or availability of a

governmental record. A governmental record is defined as anything belonging to, received by or kept by government for information or that government is required by law to be kept by others for information of government. An offense under Section 3 is a Class A misdemeanor unless the actor's intent is to defraud or harm another, in which event the offense is a felony of the third degree;

Labor Requirements for Construction Activities - Any kind of construction related activities that are being funded in whole or in part with ARRA funds must comply with the Davis-Bacon and related Acts Act (labor standards). This requires that the federal prevailing wage rate be paid to construction workers. This requirement applies to all primary and secondary contractors. The applicability and extent of Davis-Bacon Act requirements in regard to a particular project will be determined on a case-by-case basis by the Department. Narrative - Applicants are required to provide a detailed scope of work outlining the uses of the funds. The narrative should include a description of Proposed ARRA Project – explain how your proposal/project will be eligible under the ARRA. Include a description of the Applicant’s management including resumes for the management team and personnel responsible for proposal/project funds. The scope of work should detail both outcomes – what the affect the proposal/project will have and outputs – numeric measures of the outcomes.


Other Funds Documentation Requirement - Other funds are defined as all other sources of funds for the project as reflected on the Sources and Uses of Funds form that are needed to complete the project. ARRA monies are to reimburse an ARRA-recipient for eligible expenditures they have made or incurred, rather than be advance payments. These reimbursements will be only for work actually completed. ARRA-recipients are responsible to pay Sub-contractors/vendors/employees according to the terms of their agreements. ARRA monies are available to reimburse ARRA-recipients for draws when they are in compliance with the terms of the ARRA contract. Failure to comply with the terms of the ARRA contract does not relieve the ARRA-recipient of its liability to pay Sub-contractors/vendors/employees.


SECTION 3 Information to know if an application is approved. ADA/Architectural Barriers Act –State law requires that all projects involving any building construction (to public buildings and facilities; privately owned buildings and facilities leased or occupied by state agencies; places of public accommodation; and commercial facilities by individuals with disabilities), activities, regardless of source of funding, must ensure that building plans and specifications will be in compliance with the requirements concerning the elimination of architectural barriers encountered by persons with disabilities, as specified in Texas Government Code, Chapter 469 and the rules promulgated thereunder and be submitted to the Texas Department of Licensing and Regulation (TDLR) for review, as required by the Texas Architectural Barriers Act. The plans and specifications shall be sent to the Texas Department of Licensing and Regulations, Architectural Barriers Division, P.O. Box 12157, Austin, Texas 78711. In real estate projects where ARRA monies will be used for building construction activities, THECB requires evidence that the plans and specifications for construction of improvements to, or the renovation of buildings and/or public facilities have been submitted to TDLR, prior to funding construction activities. Evidence of TDLR receipt must be proof of payment (i.e. paid receipt, canceled check, wire transfer receipt) and a copy of the TDLR application form. A plan approval letter, issued by TDLR, will be required, prior to close out of the contract. Draw-down Requirements - Below are draw-down thresholds. These thresholds are commensurate with the progress of the project and associated with the milestones outlined in the scope of work. 1. No more than a 90% draw-down of the budgeted ARRA funds prior to the receipt of all required

close-out documentation. 2. The final 10% draw-down may be requested upon programmatic closure and will be available

following receipt of the programmatic close-out letter issued by THECB. 3. Funds reserved for audit purposes will be released upon completion and submission of an acceptable

audit.

4. The minimum draw amount that may be submitted to THECB is $2,500.

5. All required monthly reports must be current.

Use the Budget Form found in Appendix C to submit all draw-down requests. All support documentation submitted for ARRA must include milestones, total budget, currently due, previously billed, and balance. Environmental Review - All approved ARRA projects require environmental clearance before ARRA funds, as outlined on the Sources and Uses of Funds form, may be spent or incurred (with the qualified exception of engineering or architectural costs). Applicant is at risk for any funds expended or incurred prior to receiving an award or an environmental clearance. The Environmental Review must include a review of private as well as public sector improvements and must address the impact of projects on existing infrastructure. Environmental Reviews will not be cleared prior to THECB’s receipt of the fully executed ARRA contract. Contact the [email protected] for additional Environmental Review information. Program Income - Gross income received by a state, a unit of general local government, or a ARRA-recipient that was generated from the use of ARRA funds. When program income is generated by an



activity that is only partially funded with ARRA funds, the income shall be prorated to reflect the percentage of ARRA funds used. Program income includes, but is not limited to, the following: 1. Payments of principal and interest on loans, lease payments, and late fees; 2. Proceeds from the sale of loans/leases; 3. Gross income from the use, sale, or rental of real or personal property acquired by the applicant or a Sub-recipient; 4. Gross income from the use, sale, or rental of real property owned by the applicant or Sub-recipient that was constructed or improved; 5. Proceeds from the disposition of equipment; and 6. Interest earned on funds held in an interest bearing bank account. Uniform Relocation Assistance And Real Property Acquisition Policies Act of 1970 (Uniform Act) -These policies must be followed any time real estate acquisition or displacement of residents is involved (acquiring real estate or displacing individuals with ARRA or any other funds) in a project assisted with ARRA monies. This may include real estate already acquired (generally within the previous 12 months) in anticipation of a proposed project. Therefore, all projects which will involve/include any real property acquisition or displacement (residents or businesses) should contact the [email protected] prior to initiating acquisition negotiations and/or prior to submitting an ARRA application.



Appendix A

Job Category/Group Definitions

Officials and Managers - Occupants requiring administrative personnel who set broad policies, exercise overall responsibility of execution of these policies, and individual departments or special phases of a firm’s operations. This

includes: Officials, Executives, middle management, plant managers and superintendents, salaried supervisors who are members of management, purchasing agents and buyers, and kindred workers. Professional - Occupants requiring either college graduation or experience of such kind and amount as to provide a comparable background includes: accountants and auditors, airplane pilots and navigators, architects, artists chemists, designers, dietitians, editors, engineers, lawyers, librarians, mathematicians, natural scientists, registered professional nurses, professional and labor relations workers, physical scientists, physicians, social scientists, teachers, and kindred workers. Technicians - Occupants requiring a combination of basic scientific knowledge and manual skill which can be obtained through about 2 years of post-high school education such as is offered in many technical institutions and junior colleges, or through equivalent on the job training. This includes: computer programmers and operators, drafters, engineering aides, junior engineers, mathematic aides, licensed practical or vocational nurses, photographers, radio operators, scientific assistants, surveyors, technical illustrators, technicians (medical, dental, electronic, physical science) and kindred workers. Sales - Occupants engaging wholly or primarily in direct selling. This includes: advertising agenda and sales workers; insurance agents and brokers; real estate agents and brokers; sales workers; demonstrators and retail sales workers; and sales clerks, grocery clerks and cashiers; and kindred workers. Office and Clerical - Includes all clerical-type work regardless of level of difficulty, where the activities are predominantly non-manual though some manual work not directly involved with altering or transporting the products is included. This includes: bookkeepers, cashiers, collectors (bills and accounts), messengers and office helpers, office machine operators, shipping and receiving clerks, stenographers, typists, and secretaries, telegraph and telephone operators, and kindred workers. Craft Worker (skilled) - Manual workers of relatively high level having a thorough and comprehensive knowledge of the processes involved in their work. Exercise considerable independent judgment and usually receive an extensive period of training. This includes: the building trades, hourly paid supervisors and lead operators (who are not members of management), mechanic and repairers, skilled machining occupations, compositors and typesetters, electricians, engravers, job setters (metal), motion picture projectionists, pattern and model makers, stationary engineers, tailors, and kindred workers. Operatives (semi-skilled) - Workers who operate machines or other equipment or perform other factory-type duties of intermediate skill level which can be mastered in a few weeks and require only limited training. This includes: apprentices (auto mechanics, plumbers, electricians, machinists, mechanics, building trades, metal working trades, printing trades, etc.), operatives, attendants (auto service and parking), blasters, chauffeurs, delivery workers, dress makers and sewers (except factory), dryer’s furnaces workers, heaters (metal), laundry and dry cleaning, operatives, milliners, mine operatives and

laborers, motor operators, oilers and greasers (except auto), painters (except construction and maintenance), photographic process workers, boiler tenders, truck and tractor drivers, weavers (textile), welders and flame metals workers, and kindred workers. Laborers (unskilled) - Workers in manual occupations which generally require no special training perform elementary duties that may be learned in a few days and require the application of little or no independent judgment. This includes: garage laborers; car washers and greasers; gardeners (except farm) and ground keepers; stevedores; wood choppers; laborers performing lifting, digging, mixing, loading, and pulling operations; and kindred workers. Service Workers - Workers in both protective and non-protective service occupations. This includes attendants (hospital and other institutions, professional and personal service, including nurse’s aides and orderlies), barbers, chair workers and cleaners, cooks (except household), counter and fountain workers, elevator operators, firefighters and fire protection guards, door keepers, stewards, janitors, police officers and detectives, porters, waiters and waitresses, and kindred workers.


Appendix B

REPORTING REQUIREMENTS CONTINUED

A. ARRA-recipients shall comply with all requirements specified in the ARRA, including reporting requirements outlined in Section 1512 and any implementing guidance issued by the Office of Management and Budget. Some ARRA-Recipients, for purposes of Section1512 reporting will be considered Sub-recipients. Those ARRA-recipients must obtain a DUNS number, register at the Central Contractor Registration (CCR) database, www.ccr.gov, and register at www.federalreporting.gov. Each ARRA-recipient shall submit Progress and Financial Reports by the required due dates. ARRA-recipients shall adhere to the reporting requirements outlined and communicated by THECB for the program year.

1 Progress Reports (PR) - The ARRA-recipient shall submit a progress report due to THECB no later than

five (5) days after the end of each calendar month. The report is submitted through the appropriate electronic system.

2 Financial Reports (FR) - The ARRA-recipient shall submit a financial report due to THECB no later than five (5) days after the end of each calendar month. The report is submitted through the appropriate electronic system.

B. Requests for extensions of reporting deadlines may be granted when 1) the report cannot be furnished in a timely manner for reasons legitimately beyond the control of the ARRA-recipient and 2) THECB receives a request explaining the need for an extension at least 24 hours before the due date of the report. Extensions may only be granted by THECB. Extensions for reports tied to ARRA funds are extremely unlikely. C. The ARRA-recipient shall submit such additional periodic, ARRA-recipient agreement closeout, or ad-hoc reports on the operation and performance of this ARRA-recipient agreement deemed necessary by THECB. THECB’s request shall provide a reasonable time of response, in consideration of the nature and availability of the information requested. D. Reporting requirements are subject to change based on additional ARRA guidance from OMB. E. Noncompliance with any reporting requirements may result in enforcement activities or termination of this ARRA-recipient agreement. Noncompliance with any reporting requirements will be part of an ARRA-recipient’s Performance Record.

REPORTING AND EVENTS Schedule of Dates

The following events require mandatory participation. Participation will become part of an ARRA-recipient’s Performance Record. Further information about the reports and events listed below will be provided by THECB.

Date Event or Report From To

October 5, 2009 PR & FR Start of Grant Period September 30, 2009 November 5, 2009 PR & FR October 1, 2009 October 31, 2009 December 5, 2009 PR & FR November 1, 2009 November 31, 2009 January 5, 2010 PR & FR December 1, 2009 December 31, 2009 February 5, 2010 PR & FR January 1, 2010 January 31, 2010 March 5, 2010 PR & FR February 1, 2010 February 28, 2010 April 5, 2010 PR & FR March 1, 2010 March 31, 2010 May 5, 2010 PR & FR April 1, 2010 April 30, 2010 June 5, 2010 PR & FR May 1, 2010 May 31, 2010 July 5, 2010 PR & FR June 1, 2010 June 30, 2010 August 5, 2010 PR & FR July 1, 2010 July 31, 2010 September 5, 2010 PR & FR August 1, 2010 August 31, 2010 October 5, 2010 PR & FR September 1, 2010 September 30, 2010 PR – Progress Report

http://www.ccr.gov/

http://www.federalreporting.gov/


FR – Financial Report All reports shall be entered into the designated reporting system and received by THECB by the due date noted. All Reports are due by 5:00 p.m. CST, on the date stated.

F. Requests for reimbursement not received by the deadline will be held over until the next month’s reporting deadline. Requests for reimbursement will not be paid until that time.


Appendix C

2009-2010 American Recovery and Reinvestment Act of 2009 Texas Higher Education Coordinating Board

Budget Form

TEXAS HIGHER EDUCATION COORDINATING BOARD Contract Number

REQUEST FOR PAYMENT Contract Period:

From _______________ TO _____________

Name of ARRA-recipient Period Covered by this Report:

From _______________ TO _____________

Request #

Column A Column B Column C Column D Column E

NAME OF BUDGETED LINE

ITEMS/MILESTONES

(SEE LIST BELOW)

BUDGET THIS REQUEST TOTAL PRIOR

REQUESTS

BALANCE

(B-C-D)

TOTALS

Using the following list enter in Column A the line items that are applicable to the contract budget.

These line items will be taken directly from your ARRA-recipient contract budget/milestones. The items below are SAMPLES only.

1. New Job(s)

2. Retained Job(s)

3. Capital Outlay for Computer Upgrades

4. Working Capital – Rent for building

Signature of Authorized Certifying Official DATE:

CERTIFICATION: _______________________________________________________________ __________________

I certify that to the best

of my knowledge and

belief the data above are

correct and that all

outlays were made in

accordance with the

terms of the contract and

that payment is due and

has not been previously

drawn.

Typed or printed Name and Title

_______________________________________________________________

_______________________________________________________________

Telephone Number

(Area Code)

(_____) _________________________________________________________

ALL EXPENDITURES RELATED TO THIS CONTRACT MUST BE CONSISTENT WITH THE UNIFORM GRANT AND CONTRACT STANDARDS DEVELOPED

UNDER THE DIRECTIVE OF UNIFORM GRANT AND CONTRACT MANAGEMENT ACT OF 1981, TEXAS CIVIL STATUTES, ARTICLE 4413 (32G).

REMARKS:

___________________________________________ ____________________________________________ Approval of THECB Date of THECB Approval


Appendix C

INSTRUCTIONS FOR COMPLETION OF BUDGET FORM

The ARRA-recipient must submit the signed original and one copy of this form. The following information needs to be complete. Name of Contractor: Type the name of the ARRA-recipient requesting payment. Request #: This should be next in numerical order after the last request. The last payment request

should be marked ―final‖. Contract Number: This should be the number assigned to the ARRA-recipient’s contract. Contract Period: This is the total contract period assigned to the contract including any approved contract

extensions. Period Covered by This Report: List the beginning and ending date for the period of time in which the costs were incurred.

This period of time does not necessarily have to start up after the period of time in your last request. These periods may overlap or leave gaps from previous payment requests. This period should fall within the contract period.

The next section should be completed using the shaded listing in the middle of the form. List each budget line item from the ARRA-recipient agreement in Column A regardless if there is any activity for that line item for this request. Column B should reflect the existing budget including any amendments and budget modifications. The total of Column B should always equal the total original or amended budget of the contract. Column C should reflect this request's activity by line item. If there is not any activity for this line item draw, leave the space blank. Column D should reflect the total of all prior requests by line item. Column E should equal Column B less Column C less Column D for all line items including the totals. The total of column E should also equal the balance of all line items added together. Certification: Enter the name and the title of the individual authorized to sign. It must contain an original authorized signature. Please include the date signed and a telephone number, where this individual can be reached. You may note anything you wish to in the Remarks section. Please DO NOT sign in the last section for THECB Approval.


Index

ADA/Architectural Barriers Act ....................................................................................................... 15 Appendix A – Job Category/Group Definitions............................................................... 17 Appendix B – Reporting Requirements .................................................................... 18-19 Appendix C – Budget Form ...................................................................................... 20-21 Applicants ....................................................................................................................... 4 Applicant Performance Threshold Requirements ............................................................ 4 Application Dates ............................................................................................................ 4 Application Process ........................................................................................................ 4 Application Time Lines ................................................................................................... 5 Board .............................................................................................................................. 5 Budget Justifications ..................................................................................................... 11 Conflict of Interest ........................................................................................................... 5 Construction Projects ...................................................................................................... 5 Contractor ....................................................................................................................... 6 Contracts ......................................................................................................................... 6 Dates .............................................................................................................................. 7 Davis-Bacon Labor Standards ......................................................................................... 6 Draw Down Requirements............................................................................................. 15 DUNS .............................................................................................................................. 6 Employment Projections Form ...................................................................................... 13 Engineering/Architectural .......................................................................................... 6, 13 Environmental Review ............................................................................................... 5, 15 False Information .......................................................................................................... 13 Ineligible Uses of Funds ................................................................................................ 11 Jobs ................................................................................................................................ 7 Job Category/Group Definitions ...................................................................................... 9 Jobs Retained ................................................................................................................. 9 Labor Requirements for Construction Activities ............................................................. 13 Liability ............................................................................................................................ 9 Narrative ....................................................................................................................... 13 Other Funds Documentation Requirement .................................................................... 13 Procurement ................................................................................................................... 6 Program Income ............................................................................................................ 15 Project Length ................................................................................................................. 9 Reporting ...................................................................................................................... 10 State Guidelines .............................................................................................................. 6 Table of Contents ............................................................................................................ 3 Texas Department of Licensing and Regulations ............................................................ 6 Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Uniform Act) ................................................................................................................. 16 Use of Funds ................................................................................................................... 9

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