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2016 Regular Session
SENATE BILL NO. 307
BY SENATOR MORRISH
POSTSECONDARY ED. Provides relative to the Louisiana Student Financial Assistance
Commission and the Louisiana Tuition Trust Authority. (gov sig)
1 AN ACT
2 To amend and reenact R.S. 17:3021, 3023, 3023.1(C), (D), and (E), 3023.3, 3023.4(A),
3 3023.6, 3023.7, 3023.8, 3024, 3024.1, 3024.2, 3031, and 3093(A) and (B), and R.S.
4 36:651(BB), and to repeal R.S. 17:3022, 3023.9, 3025, and 3035, relative to the
5 Louisiana Student Financial Assistance Commission and the Louisiana Tuition Trust
6 Authority; to abolish the commission and transfer the powers, duties, and functions
7 of the commission and the trust authority to the Board of Regents; and to provide for
8 related matters.
9 Be it enacted by the Legislature of Louisiana:
10 Section 1. R.S. 17:3021, 3023, 3023.1(C), (D), and (E), 3023.3, 3023.4(A), 3023.6,
11 3023.7, 3023.8, 3024, 3024.1, 3024.2, 3031, and 3093(A) and (B) are hereby amended and
12 reenacted to read as follows:
13 §3021. Louisiana Student Financial Assistance Commission Student financial
14 assistance; Board of Regents
15 There is hereby created the Louisiana Student Financial Assistance
16 Commission. Any reference to the Governor's Special Commission on Education
17 Services in law or in any rule or regulation shall be deemed to apply to the Louisiana
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1 Student Financial Assistance Commission. The purpose of such commission is to
2 The Board of Regents shall supervise, control, direct, and administer state and
3 federal programs to provide loans to assist persons in meeting the expenses of higher
4 education, and state and federal scholarship programs for higher education in
5 accordance with the provisions of this Chapter.
6 §3023. Powers and duties
7 A. The Louisiana Student Financial Assistance Commission board may:
8 (1) Guarantee the loan of money to lending agencies and/or and any holders
9 of such loans, subject to the requirement of R.S. 17:3023.4 and upon such other
10 terms and conditions as the commission board may prescribe, for persons attending
11 or planning to attend institutions of higher education to assist them in meeting their
12 expenses of higher education, including graduate, professional, vocational, business,
13 or technical education.
14 (2)(a) Pay to the lending agencies and/or and any holders of such loans the
15 interest as prescribed in R.S. 17:3023.4, on loans made to students, as long as the
16 student is enrolled in any institution of higher learning approved by the commission
17 board, or for not in excess of three years during which the borrower is in the active
18 military service of the United States.
19 (b) When federal funds are available to refund the commission board for
20 payment of interest on student loans, periodic installment payments of principal may
21 be delayed, and interest may accrue and may be paid during any period:
22 (i) Not in excess of three years during which the borrower is a member of the
23 armed forces of the United States.
24 (ii) Not in excess of three years during which the borrower is in service as a
25 volunteer under the Peace Corps Act.
26 (iii) Not in excess of three years during which the borrower is in service as
27 a volunteer under Title VIII of the Economic Opportunity Act of 1964.
28 (3) Operate in the other capacities permitted by federal law and regulation in
29 the Title IV student financial assistance programs administered by the commission.
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1 (4) Reject or take or hold and administer, on behalf of the commission board
2 and for any of its purposes, real property, personal property, and monies, or any
3 interest therein, and the income therefrom, either absolutely or in trust, for any
4 purpose of the commission board. The commission board may invest its funds in
5 any investments in which funds of the state employees retirement system may be
6 invested pursuant to R.S. 11:517. The commission board may acquire property or
7 monies for its purposes by the acceptance of gifts, grants, appropriations, bequests,
8 devises, or loans.
9 (5) Enter into such contracts, as may be desirable, with institutions of higher
10 education, upon such terms as may be agreed upon between the commission board
11 and the institution, to provide for the administration by such institution of any loan
12 or loan plan guaranteed by the commission board, including but not limited to
13 applications therefor and repayment thereof.
14 (6) Enter into contracts with any bank or other lending agency and/or and
15 any holder of such loan upon such terms as may be agreed upon between the
16 commission board and the bank or other lending agency or holder, to provide for the
17 administration by such bank or other lending agency or holder, of any loan or loan
18 plan guaranteed by the commission including but not limited to applications therefor
19 and terms of repayment thereof, and to establish the conditions for payment by the
20 commission board to the bank or other lending agency and/or and the holder of the
21 guarantee on any loan. A loan shall be defaulted when the bank or other lending
22 agency and/or and holder makes application to the commission board for payment
23 on the loan stating that such loan is in default in accordance with the terms of a
24 contract executed under this Paragraph.
25 (7) Sue and be sued in the name of the commission board.
26 (8) Collect loans guaranteed by the commission board on which the
27 commission board has met its guarantee obligations.
28 (9) Adopt rules and regulations in accordance with the provisions of the
29 Administrative Procedure Act, not inconsistent with the provisions of this Chapter,
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1 governing the guarantee, disbursement, and/or and servicing of loans made by the
2 commission board, and governing any other matters relating to the activities of the
3 commission board. Such rules and regulations shall include procedures for the
4 denial of licenses, permits, and certificates required by the state to practice or engage
5 in a trade, occupation, or profession to applicants and renewal applicants in default
6 on the repayment of loans guaranteed by the commission board, for the conditional
7 issuance or renewal of such a license, permit, or certificate pending an applicant's
8 compliance with loan repayment requirements, and for other matters necessary to
9 implement the provisions of R.S. 37:2951.
10 (10) Perform such other acts as may be necessary or appropriate to carry out
11 effectively the objects and purposes of the commission this Chapter.
12 (11) Notwithstanding any other provisions of law, enter into agreements with
13 the United States Department of Education and other public or private entities for
14 any purpose related to the administration of student financial assistance programs
15 pursuant to the Higher Education Act of 1965, 20 U.S.C. 1070 et seq., as amended
16 or as hereafter amended.
17 (12) Define, for the purposes of this Chapter, the meaning of "Louisiana
18 residency".
19 B. In addition to any other powers and duties authorized by this Section for
20 the Louisiana Student Financial Assistance Commission, the commission board
21 shall establish an internal audit function and shall establish an office of the chief
22 audit executive who shall be responsible for ensuring that the internal audit function
23 adheres to the Institute of Internal Auditors, International Standards for the
24 Professional Practice of Internal Auditing. The chief audit executive shall maintain
25 organizational independence in accordance with these standards and shall have direct
26 and unrestricted access to the commission board. The chief audit executive shall
27 annually certify to the commission board that the internal audit function conforms
28 to the Institute of Internal Auditors, International Standards for the Professional
29 Practice of Internal Auditing.
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1 §3023.1. Credit unions, savings and loan associations, schools and insurance
2 companies as lending agencies
3 * * *
4 C. Savings and loan associations in Louisiana shall be empowered to make
5 student loans guaranteed by the commission board up to five percent of their assets
6 in accordance with the provisions of any federal law relating to federally insured
7 student loan programs.
8 D. Postsecondary schools in Louisiana shall be empowered to make student
9 loans guaranteed by the commission board in accordance with the provisions of the
10 Federal Higher Education Act of 1965 as amended or as hereafter amended.
11 E. Insurance companies domiciled, licensed, or registered to do business and
12 subject to examination and supervision by an agency of the state shall be empowered
13 to make student loans guaranteed by the commission board pursuant to the
14 provisions of applicable state laws and the provisions of the Federal Higher
15 Education Act of 1965, as amended or hereafter amended.
16 §3023.3. Loan of reserve funds
17 The Louisiana Student Financial Assistance Commission is empowered to
18 board may authorize the granting of guaranteed student loans made pursuant to the
19 provisions of this Chapter out of reserve funds of said commission available to the
20 board for such purpose, and shall have the authority to may sell or discount, or
21 both, said such loans to banks, credit unions, and other authorized lending
22 institutions, at such consideration and upon such terms as may be agreed upon by the
23 commission board.
24 §3023.4. Student loan guarantees
25 A. Notwithstanding any other provisions of law, the Louisiana Student
26 Financial Assistance Commission is hereby authorized to board may guarantee
27 loans made to students attending or planning to attend institutions of higher
28 education, including graduate, professional, vocational, business, or technical
29 education, subject to the conditions, limitations, reinsurance provisions and in
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1 accordance with the terms and provisions of and within the amounts established by
2 20 U.S.C. §1071 et seq., or in accordance with the provisions of any federal law or
3 regulations relating to student loan guarantee or insurance programs, provided that
4 the aggregate value of all loans guaranteed and outstanding at any one time shall not
5 exceed fifteen times the total value of funds, investments, properties, and other assets
6 of the commission available to the board for such purpose, except that this
7 guarantee may be further expanded by use of federal credit.
8 * * *
9 §3023.6. Age does not bar loan
10 Any person otherwise qualifying for a loan guaranteed by the Louisiana
11 Student Financial Assistance Commission board shall not be disqualified by reason
12 of his being under the age of twenty-one, and for the purpose of applying for,
13 receiving, and repaying such a loan, any such person, notwithstanding the provisions
14 of any law to the contrary, shall be deemed to have full legal capacity to act and shall
15 have all the rights, powers, privileges, and obligations of a person of full age with
16 respect thereto.
17 §3023.7. Tax exemption
18 All property and income of the Louisiana Student Financial Assistance
19 Commission board used exclusively for the purposes of this Chapter shall be exempt
20 from all taxes and assessments.
21 §3023.8. Examination by commissioner of financial institutions
22 The Louisiana Student Financial Assistance Commission shall be board in
23 its actions pursuant to this Chapter is subject to examination by the commissioner
24 of financial institutions, but shall not be deemed to be a banking organization nor be
25 required to pay a fee for any such supervision or examination. The commission
26 board shall make an annual report of its condition to the governor, the legislature,
27 and the commissioner of financial institutions on or before June 30 thirtieth.
28 §3024. Acceptance and use of funds
29 The Louisiana Student Financial Assistance Commission board shall accept
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1 any contributions or subsidies made to it from state funds and shall use the funds to
2 meet administrative expenses for any of its purposes and to provide a reserve fund
3 to guarantee loans made pursuant to the provisions of this Chapter and to pay interest
4 on guaranteed loans, as provided by R.S. 17:3023.
5 §3024.1. Student loans as security for deposit of public funds
6 Notes representing loans to students which are guaranteed by this
7 commission board in accordance with a contract agreement under the provisions of
8 this Chapter, may be pledged as collateral security for deposit of public funds as
9 required in R.S. 39:403 and R.S. 39:1221.
10 §3024.2. Appropriation for guaranteed student loan program
11 The legislature shall annually appropriate sufficient funds to pay those
12 eligible claims resulting from the guarantee of student loans by the Louisiana
13 Student Financial Assistance Commission board under this Chapter, but only to the
14 extent that anticipated federal reinsurance or reimbursement payments pursuant to
15 20 U.S.C. §1071 et seq., and any other monies available to the Louisiana Student
16 Financial Assistance Commission board for such purpose are insufficient to pay
17 such claims.
18 §3031. State student incentive grant; federal participation
19 A. The Louisiana Student Financial Assistance Commission is empowered
20 to board may administer the state student incentive grant program for student
21 financial aid as provided in Title IV of the Federal Higher Education Act, as
22 amended, and to prescribe appropriate rules and regulations applicable thereto. The
23 commission is authorized to board may enter into contracts or agreements with the
24 federal government for their financial participation in the program on such terms and
25 conditions as may be agreed upon by the commission board.
26 B. The commission is authorized to board may implement a program to train
27 and further acquaint administrators of financial aid and assistance with the federal
28 and state programs of student financial aid, pursuant to the Federal Higher Education
29 Act as amended by Public Law 94-482. The commission board shall design and
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1 develop this program in consultation with the statewide financial aid administrators
2 association. The commission board may provide appropriate rules and regulations
3 in order to execute this provision. The commission is authorized to board may enter
4 into contracts or agreements with the federal government for their its financial
5 participation in the program on such terms and conditions as may be agreed upon by
6 the commission board.
7 * * *
8 §3093. Louisiana Tuition Trust Authority; creation; powers
9 A. There is hereby created the Louisiana Tuition Trust Authority, which
10 under the authority of the Board of Regents, shall have the powers enumerated
11 in this Chapter.
12 B.(1) The Louisiana Tuition Trust Authority shall consist of the Louisiana
13 Student Financial Assistance Commission Board of Regents, except as modified by
14 Paragraph (2) of this Subsection, and hereinafter shall be referred to as the authority.
15 The authority shall operate under the same laws, rules, and guidelines and with the
16 same officer selection and employment policies as the commission, except when
17 inconsistent with this Chapter. The commissioner of higher education or his
18 designee shall serve as ex officio chairman of the authority.
19 (2) The membership of the authority shall consist of the following persons:
20 (a) The members of the Louisiana Student Financial Assistance Commission
21 exclusive of the two persons appointed by the governor from names submitted by the
22 Louisiana Bankers' Association Board of Regents.
23 (b) An officer of a bank in Louisiana who is a member of the Louisiana
24 Bankers' Association and who is nominated by the association and appointed by the
25 governor.
26 (c) One member of the House of Representatives appointed by the speaker
27 and one member of the Senate appointed by the president.
28 (d) The state treasurer who shall be an ex officio voting member of the
29 authority.
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1 (e) The commissioner of higher education or his designee.
2 (3) The authority shall meet at least annually at the call of the chairman and
3 at such other times as the chairman or the authority determines necessary. The
4 authority chairman may establish and delegate to an executive committee such
5 duties and responsibilities as the authority determines appropriate, except that the
6 authority may not delegate to the executive committee the final determination of the
7 rate of interest to be paid on education savings accounts of record at the close of the
8 calendar year. Upon such delegation, the executive committee shall have the
9 authority to act pursuant to such delegation without further approval or action by the
10 authority.
11 (4) A majority of the authority shall constitute a quorum of the authority, and
12 the affirmative vote of a majority of the members present shall be necessary for any
13 action taken by the authority. A majority of the executive committee shall constitute
14 a quorum of the executive committee, and the affirmative vote of a majority of the
15 executive committee members present shall be necessary for any action taken by the
16 executive committee. No vacancy in the membership of the authority or the
17 executive committee shall impair the rights of a quorum to exercise all rights and
18 perform all duties of the authority or the executive committee respectively.
19 * * *
20 Section 2. R.S. 36:651(BB) is hereby amended and reenacted to read as follows:
21 §651. Transfer of boards, commissions, departments, and agencies to Department of
22 Education; boards, commissions, and agencies within Department of
23 Education
24 * * *
25 BB. The Louisiana Student Financial Assistance Commission (R.S. 17:3021
26 et seq.) is hereby abolished and its powers, duties, functions and responsibilities
27 are hereby transferred to placed within the Board of Regents and shall exercise
28 and perform its powers, duties, functions, and responsibilities in the manner provided
29 for agencies transferred in accordance with the provisions of R.S. 36:801.1. All
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1 reference in law to the Louisiana Student Financial Assistance Commission
2 shall refer to the Board of Regents.
3 * * *
4 Section 3. R.S. 17:3022, 3023.9, 3025, and 3035 are hereby repealed.
5 Section 4. This Act shall become effective upon signature by the governor or, if not
6 signed by the governor, upon expiration of the time for bills to become law without signature
7 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
8 vetoed by the governor and subsequently approved by the legislature, this Act shall become
9 effective on the day following such approval.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Serrett.
DIGEST
SB 307 Engrossed 2016 Regular Session Morrish
Proposed law abolishes the Louisiana Student Financial Assistance Commission and
transfers the powers, duties, and functions of the commission and the Louisiana Tuition
Trust Authority to the Board of Regents.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 17:3021, 3023, 3023.1(C), (D), and (E), 3023.3, 3023.4(A), 3023.6, 3023.7,
3023.8, 3024, 3024.1, 3024.2, 3031, and 3093(A) and (B), and R.S. 36:651(BB); repeals R.S.
17:3022, 3023.9, 3025, and 3035)
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