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AN ACT relating to the Kentucky Higher Education Student Loan Corporation. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 164A.040 is amended to read as follows: 3
(1) The General Assembly of the Commonwealth of Kentucky hereby finds and 4
determines that as a result of the adoption of the education amendments of 1976 by 5
the Congress of the United States, being Public Law 94-482, it is essential, in order 6
that the Commonwealth of Kentucky may continue to provide adequate educational 7
opportunities to all of its citizens and residents, that the corporation be created and 8
empowered to finance student loan operations in Kentucky by the issuance of its 9
bonds and notes for the purpose of making and purchasing[ insured] student loans. 10
(2) The General Assembly hereby finds and declares further that in the performance of 11
its duties, powers and responsibilities, the corporation will be performing essential 12
public and governmental functions and shall be and constitute an independent de 13
jure municipal corporation and political subdivision of the Commonwealth of 14
Kentucky for the purpose of promoting higher educational opportunities through a 15
program of financing, making and purchasing of[ insured] student loans. 16
Section 2. KRS 164A.050 is amended to read as follows: 17
(1) There is hereby created and established an independent de jure municipal 18
corporation and political subdivision of the Commonwealth of Kentucky which 19
shall be a body corporate and politic to be known and identified as the Kentucky 20
Higher Education Student Loan Corporation. 21
(2) The Kentucky Higher Education Student Loan Corporation is created and 22
established as an independent de jure municipal corporation and political 23
subdivision of the Commonwealth of Kentucky to perform essential governmental 24
and public functions and purposes in improving and otherwise promoting the 25
educational opportunities of the citizens and inhabitants of the Commonwealth of 26
Kentucky and other qualified students by a program of financing, making, and 27 UNOFFICIAL COPY 22 RS BR 1936
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purchasing of[ insured] student loans. 1
(3) (a) Subject to paragraph (b) of this subsection, the corporation shall be governed 2
by a board of directors consisting of: 3
1. Eight (8) voting members chosen from the general public residing in the 4
Commonwealth of Kentucky; and 5
2. Seven (7) voting members of the board of directors of the Kentucky 6
Higher Education Assistance Authority appointed by the Governor 7
pursuant to KRS 164.746(1)(a)1., who shall serve terms of office on the 8
corporation board of directors coextensive with their respective terms of 9
office on the Kentucky Higher Education Assistance Authority board of 10
directors. 11
(b) Upon resignation or expiration of the term of an appointed member of the 12
board of the corporation and the Kentucky Higher Education Assistance 13
Authority, that member's position shall be abolished to reduce the combined 14
number of appointed members of the boards of the corporation and the 15
Kentucky Higher Education Assistance Authority to ten (10) members. 16
(c) In addition, the president of the Council on Postsecondary Education, the 17
secretary of the Finance and Administration Cabinet, the president of the 18
Association of Independent Kentucky Colleges and Universities, the State 19
Treasurer, and the commissioner of education, or their designees who shall be 20
another official of the same cabinet or agency, shall serve as ex officio voting 21
members. 22
(4) The Governor shall appoint directors according to subsection (3)(a)1. of this section 23
from nominees submitted by the Governor's Higher Education Nominating 24
Committee under KRS 164.005 to take office and to exercise all powers thereof 25
immediately. The terms shall be staggered and shall be for a period of four (4) years 26
each. Each director shall serve for the appointed term and, except as provided in 27 UNOFFICIAL COPY 22 RS BR 1936
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subsection (3)(b) of this section, shall serve until a successor has been appointed 1
and has duly qualified. 2
(5) Except as provided in subsection (3)(b) of this section, in the event of a vacancy, the 3
Governor may appoint a replacement director from nominees submitted by the 4
Governor's Higher Education Nominating Committee under KRS 164.005 who 5
shall hold office during the remainder of the term so vacated. 6
(6) The Governor may remove any director from the general public in case of 7
incompetency, neglect of duties, gross immorality, or malfeasance in office; and 8
may thereupon declare such office vacant and may appoint a person to fill such 9
vacancy as provided in other cases of vacancy. 10
(7) The board shall elect from its voting membership a chair, chair-elect, and secretary-11
treasurer. The executive director of the Kentucky Higher Education Assistance 12
Authority shall serve as executive director of the corporation. 13
(8) The executive director shall administer, manage, and direct the affairs and business 14
of the corporation, subject to the policies, control, and direction of the board of 15
directors of the corporation. The secretary-treasurer of the corporation shall keep a 16
record of the proceedings of the corporation and shall be custodian of all books, 17
documents, and papers filed with the corporation, the minute book or journal of the 18
corporation, and its official seal. The secretary-treasurer may copy all minutes and 19
other records and documents of the corporation and give certificates under the 20
official seal of the corporation to the effect that such copies are true copies and all 21
persons dealing with the corporation may rely upon such certificates. 22
(9) A majority of the board of directors of the corporation shall constitute a quorum for 23
the purpose of conducting its business and exercising its powers and for all other 24
purposes notwithstanding the existence of any vacancies in respect of the board of 25
directors. 26
(10) Official actions may be taken by the corporation at meetings duly called by the chair 27 UNOFFICIAL COPY 22 RS BR 1936
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upon three (3) days' written notice to each director or upon the concurrence of at 1
least a majority of the directors. In lieu of personal attendance by members of the 2
board of directors at the same location, the board of directors may conduct meetings 3
by teleconference or other available technological means suitable for conducting its 4
business. Meetings of the board shall be open and accessible to the public in 5
accordance with KRS 61.805 to 61.850, and any alternate method of conducting a 6
meeting in lieu of personal attendance shall ensure public access. 7
(11) Directors, except officers or employees of the state, shall receive one hundred 8
dollars ($100) compensation per day for their services and shall be entitled to 9
payment of any reasonable and necessary expense actually incurred in discharging 10
their duties under this chapter. 11
(12) Recognizing that the corporation and the Kentucky Higher Education Assistance 12
Authority are governed by identical boards of directors and managed by a common 13
executive director and otherwise share staff functions, the two (2) organizations 14
shall provide technical, clerical, and administrative assistance to each other and for 15
the Asset Resolution Corporation, the Kentucky Educational Savings Plan Trust, 16
and the Commonwealth postsecondary education prepaid tuition trust fund, together 17
with necessary office space and personnel, and shall assist each other in all ways by 18
the performance of any and all actions which may be useful or beneficial in the 19
performance of their public functions. 20
(13) The corporation shall enter into contracts with the Kentucky Higher Education 21
Assistance Authority, the Asset Resolution Corporation, the Kentucky Educational 22
Savings Plan Trust, and the Commonwealth postsecondary education prepaid 23
tuition trust fund as may be proper and appropriate in respect to services which may 24
include but not be limited to the servicing and collection of[ insured] student loans 25
or to facilitate the common administration, operation, and management of the 26
contracting entities. 27 UNOFFICIAL COPY 22 RS BR 1936
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Section 3. KRS 164A.060 is amended to read as follows: 1
The corporation shall have all of the powers necessary or convenient to carry out and 2
effectuate the purposes and provisions of this chapter, including, but without limiting the 3
generality of the foregoing, the following powers: 4
(1) To make or participate in the making of[ insured] student loans. 5
(2) To purchase or participate in the purchase of[ insured] student loans, which 6
purchase may be from eligible lenders. 7
(3) To sell or participate in the sale of[ insured] student loans, which sale may be to 8
eligible lenders or to the student loan marketing association. 9
(4) To collect and pay reasonable fees and charges in connection with making, 10
purchasing, and servicing or causing to be made, purchased, or serviced[ insured] 11
student loans by the corporation, including payment to the guarantee agency for 12
services performed for the corporation. 13
(5) To procure insurance in respect of all student loans made or purchased by the 14
corporation. 15
(6) To consent whenever it deems it necessary or desirable in the fulfillment of its 16
corporate purposes to the modification of the rate of interest, time of payment of 17
any installment of principal or interest or any other terms of any[ insured] student 18
loan to which the corporation is a party; provided, that no such consent shall be 19
made or given if the effect of same would be to obviate insurance coverage in 20
respect of any student loan. 21
(7) To include in any borrowing such amounts as may be deemed necessary by the 22
corporation to pay financing charges, interest on its obligations for a period not 23
exceeding two (2) years from their date, consulting, advisory and legal fees, and 24
such other expenses as are necessary or incident to any such borrowing. 25
(8) To make and publish rules and regulations respecting its lending programs and such 26
other rules and regulations as are necessary to effectuate its corporate purposes. 27 UNOFFICIAL COPY 22 RS BR 1936
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(9) To make, execute, and effectuate any and all agreements or other documents with 1
any federal or state agency or any person, corporation, association, partnership, or 2
other organization or entity and perform other acts necessary or appropriate to 3
accomplish effectively the purposes of this chapter. 4
(10) To accept appropriations, loans, grants, revenue sharing, devises, gifts, bequests and 5
federal grants, and any other aid from any source whatsoever and to agree to, and to 6
comply with, conditions incident thereto. 7
(11) To sue and be sued in its own name and to plead and be impleaded. 8
(12) To maintain an office in the city of Frankfort, Kentucky, in conjunction with or in 9
close proximity to the Kentucky Higher Education Assistance Authority and such 10
other regional offices as may be required. 11
(13) To adopt an official seal and alter the same at pleasure. 12
(14) To adopt bylaws for the regulation of its affairs and the conduct of its business and 13
to prescribe rules, regulations, and policies in connection with the performance of 14
its functions and duties. 15
(15) To employ fiscal consultants, attorneys, counselors, and such other consultants and 16
employees as may be required in the judgment of the corporation and to fix and pay 17
their compensation. 18
(16) To invest any funds held in reserves or in sinking fund accounts or any moneys not 19
required for immediate disbursement in obligations guaranteed by the United States 20
or its agencies and instrumentalities; provided, however, that the return on such 21
investments shall not be violative of any laws and regulations regarding investment 22
of the proceeds of any federal tax-exempt bond issue. 23
(17) To issue its bonds and notes for the purpose of carrying out its corporate powers and 24
duties as set forth in this chapter. 25
(18) To service and collect educational loans for other lenders, holders, and educational 26
institutions. 27 UNOFFICIAL COPY 22 RS BR 1936
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(19) Except where specifically prohibited by law, to secure data from any other 1
Commonwealth of Kentucky agency or instrumentality or from any other source in 2
furtherance of any purposes of the corporation related to any program or function 3
administered by the corporation. 4