Texas 2011 - 82nd Regular

Texas House Bill HB2911 Compare Versions

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1	1	By: Branch (Senate Sponsor - Patrick) H.B. No. 2911
2	2	(In the Senate - Received from the House May 4, 2011;
3	3	May 5, 2011, read first time and referred to Committee on Higher
4	4	Education; May 19, 2011, reported favorably by the following vote:
5	5	Yeas 6, Nays 0; May 19, 2011, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to guaranteed student loans and alternative education
11	11	loans.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. The heading to Section 53B.47, Education Code,
14	14	is amended to read as follows:
15	15	Sec. 53B.47. GUARANTEED STUDENT LOANS AND ALTERNATIVE
16	16	[ALTERNATE] EDUCATION LOANS; BONDS FOR THE PURCHASE OF EDUCATION
17	17	LOAN NOTES.
18	18	SECTION 2. Sections 53B.47(a), (b), (c), (d), (f), and (h),
19	19	Education Code, are amended to read as follows:
20	20	(a) An authority may, upon approval of the city or cities
21	21	which created the same, issue revenue bonds or otherwise borrow
22	22	money to obtain funds to purchase or to make guaranteed student
23	23	loans or alternative education loans. Revenue bonds issued for
24	24	such purpose shall be issued in accordance with and with the effect
25	25	provided in this chapter. Such bonds shall be payable from and
26	26	secured by a pledge of revenues derived from or by reason of the
27	27	ownership of guaranteed student loans or alternative education
28	28	loans and investment income after deduction of such expenses of
29	29	operating the loan program as may be specified by the bond
30	30	resolution or trust indenture.
31	31	(b) An authority may cause money to be expended to make or
32	32	purchase for its account guaranteed student loans that are
33	33	guaranteed by the Texas Guaranteed Student Loan Corporation, other
34	34	guaranteed student loans, or alternative education loans that are
35	35	executed by or on behalf of students who:
36	36	(1) are residents of this state; or
37	37	(2) have been admitted to attend an accredited
38	38	institution within this state.
39	39	(c) The authority shall contract with a nonprofit
40	40	corporation, organized under the laws of this state, whereby such
41	41	corporation will provide the reports and other information required
42	42	for continued participation in the federally guaranteed loan
43	43	program provided by the Higher Education Act of 1965, as amended, or
44	44	in an alternative education loan program.
45	45	(d) The authority, as a municipal corporation of the state,
46	46	is charged with a portion of the responsibility of the state to
47	47	provide educational opportunities in keeping with all applicable
48	48	state and federal laws. Nothing in this section shall be construed
49	49	as a prohibition against establishing policies to limit the
50	50	purchase of guaranteed student loans or alternative education loans
51	51	[to guaranteed student loans] executed by students attending school
52	52	in a certain geographical area or by students who are residents of
53	53	the area.
54	54	(f) A nonprofit corporation, whether acting at the request
55	55	of a city or cities under Subsection (e) or acting as a servicer or
56	56	administrator for another corporation that purchases or makes
57	57	guaranteed student loans or alternative education loans, or that on
58	58	its own behalf issues securities or otherwise obtains funds to
59	59	purchase or make guaranteed student loans or alternative education
60	60	loans, may:
61	61	(1) exercise the powers granted by Chapters 20 and 22,
62	62	Business Organizations Code, and any provision of Title 1, Business
63	63	Organizations Code, applicable to a nonprofit corporation [the
64	64	Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
65	65	Vernon's Texas Civil Statutes)];
66	66	(2) service loans purchased or made from its funds or
67	67	contract with another person to service the loans;
68	68	(3) grant a security interest in a trust estate
69	69	securing its securities; and
70	70	(4) make investments as authorized by Subsection (e).
71	71	(h) An alternative education loan may be made under this
72	72	section only by or on behalf of a qualified alternative education
73	73	loan lender. An alternative education loan may not be in an amount
74	74	in excess of the difference between the cost of attendance and the
75	75	amount of other student assistance to the student, other than loans
76	76	under Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C.
77	77	Section 1078-2) (relating to parent loans), for which the student
78	78	borrower may be eligible. An alternative education loan covered by
79	79	this subsection is subject to Chapter 342, Finance Code, as
80	80	applicable, except that:
81	81	(1) the maximum interest rate on the loan may not
82	82	exceed the rate permitted under Subchapter A, Chapter 303, Finance
83	83	Code; and
84	84	(2) application and origination fees may be agreed to
85	85	by the parties and assessed at the inception of the loan, provided
86	86	that if any such fees constitute additional interest under
87	87	applicable law, the effective rate of interest agreed to over the
88	88	stated term of the loan may not exceed the rate allowed by
89	89	Subchapter A, Chapter 303, Finance Code, and accrued unpaid
90	90	interest may be added to unpaid principal at the beginning of the
91	91	agreed repayment period at the borrower's option and in accordance
92	92	with the terms of the agreement for purposes of determining the
93	93	total principal amount due at the inception of the repayment
94	94	period.
95	95	SECTION 3. Sections 1372.033(a) and (d), Government Code,
96	96	are amended to read as follows:
97	97	(a) In this section:
98	98	(1) ["Additional need" means the additional need of a
99	99	qualified nonprofit corporation determined by subtracting the
100	100	floor allocation for that qualified nonprofit corporation from that
101	101	corporation's annual need.
102	102	[(2) "Annual need" means, for a qualified nonprofit
103	103	corporation, one-half of the total principal amount of Texas
104	104	eligible loans the qualified nonprofit corporation purchased in the
105	105	two most recently completed fiscal years ending June 30.
106	106	[(3) "Floor allocation" means, for a qualified
107	107	nonprofit corporation, an allocation in the amount of the lesser of
108	108	$27 million or the qualified nonprofit corporation's annual need.
109	109	[(4)] "Qualified nonprofit corporation" has the
110	110	meaning assigned by Section 53B.02(11) [53.47], Education Code.
111	111	(2) [(5) "Remaining amount to be allocated" is the
112	112	total amount to be allocated under Section 1372.022(a)(5) in a
113	113	calendar year less the sum of the floor allocations of the qualified
114	114	nonprofit corporations that have applied for a student loan bond
115	115	allocation for the calendar year.
116	116	[(6)] "Student loan bond allocation" means the total
117	117	amount of the [an] allocation for private activity bonds under
118	118	Section 1372.022(a)(5) for a program year divided by the number of
119	119	qualified nonprofit corporation applicants that comply with all
120	120	applicable application requirements for that year.
121	121	[(7) "Texas eligible loan" means a Texas loan
122	122	purchased from the originating lender by a nonprofit corporation
123	123	acting as described by Section 53.47(g), Education Code.
124	124	[(8) "Texas loan" means a guaranteed student loan, as
125	125	defined by Section 53.47, Education Code, made on behalf of a
126	126	borrower who is:
127	127	[(A) a resident of this state; or
128	128	[(B) a student attending an accredited
129	129	institution, as defined by Section 53.47, Education Code, that is
130	130	located in this state.
131	131	[(9) "Total amount to be allocated" means the total
132	132	available under Section 1372.022(a)(5) for all applicants.]
133	133	(d) Each qualified nonprofit corporation that applies for a
134	134	student loan bond allocation in compliance with all applicable
135	135	application requirements for a program year is entitled to receive
136	136	a student loan bond [a floor] allocation for that year [except as
137	137	provided by this section. If the total amount to be allocated is
138	138	less than the sum of the floor allocations for all of the
139	139	applicants, each applicant is entitled to a proportion of the total
140	140	amount to be allocated equal to the proportion its floor allocation
141	141	bears to the total of the floor allocation for all of the
142	142	applicants. A qualified nonprofit corporation whose annual need is
143	143	zero is not entitled to apply for a student loan bond allocation].
144	144	SECTION 4. Sections 1372.033(c), (e), and (f), Government
145	145	Code, are repealed.
146	146	SECTION 5. The change in law made by this Act to Section
147	147	1372.033, Government Code, applies to the allocation of the
148	148	available state ceiling under that section beginning with the 2011
149	149	program year under Chapter 1372, Government Code.
150	150	SECTION 6. This Act takes effect immediately if it receives
151	151	a vote of two-thirds of all the members elected to each house, as
152	152	provided by Section 39, Article III, Texas Constitution. If this
153	153	Act does not receive the vote necessary for immediate effect, this
154	154	Act takes effect September 1, 2011.
155	155	* * * * *