On September 16, 2013, the Internal Revenue Service (IRS) proposed new arbitrage regulations that codify the 500% limit on Permanent School Fund (PSF) guaranteed bonds originally announced in Notice 2010-5 and would permit the use of the PSF to guarantee charter school bonds. Further communications with the IRS confirm that issuers may elect to apply these provisions immediately. The Texas Education Agency will need to complete their rulemaking process to fully implement the program and begin providing the PSF Guarantee for Charter School financings. Under Texas law, charter school bonds must have an investment grade rating, among other requirements, to obtain a PSF guarantee.