Texas 2011 - 82nd Regular

Texas Senate Bill SB1823 Compare Versions

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1	1	By: Patrick, Hinojosa S.B. No. 1823
2	2	(In the Senate - Filed March 11, 2011; March 24, 2011, read
3	3	first time and referred to Committee on Higher Education;
4	4	April 26, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 7, Nays 0; April 26, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1823 By: Watson
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to guaranteed student loans and alternative education
13	13	loans.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. The heading to Section 53B.47, Education Code,
16	16	is amended to read as follows:
17	17	Sec. 53B.47. GUARANTEED STUDENT LOANS AND ALTERNATIVE
18	18	[ALTERNATE] EDUCATION LOANS; BONDS FOR THE PURCHASE OF EDUCATION
19	19	LOAN NOTES.
20	20	SECTION 2. Subsections (a) through (d), (f), and (h),
21	21	Section 53B.47, Education Code, are amended to read as follows:
22	22	(a) An authority may, upon approval of the city or cities
23	23	which created the same, issue revenue bonds or otherwise borrow
24	24	money to obtain funds to purchase or to make guaranteed student
25	25	loans or alternative education loans. Revenue bonds issued for
26	26	such purpose shall be issued in accordance with and with the effect
27	27	provided in this chapter. Such bonds shall be payable from and
28	28	secured by a pledge of revenues derived from or by reason of the
29	29	ownership of guaranteed student loans or alternative education
30	30	loans and investment income after deduction of such expenses of
31	31	operating the loan program as may be specified by the bond
32	32	resolution or trust indenture.
33	33	(b) An authority may cause money to be expended to make or
34	34	purchase for its account guaranteed student loans that are
35	35	guaranteed by the Texas Guaranteed Student Loan Corporation, other
36	36	guaranteed student loans, or alternative education loans that are
37	37	executed by or on behalf of students who:
38	38	(1) are residents of this state; or
39	39	(2) have been admitted to attend an accredited
40	40	institution within this state.
41	41	(c) The authority shall contract with a nonprofit
42	42	corporation, organized under the laws of this state, whereby such
43	43	corporation will provide the reports and other information required
44	44	for continued participation in the federally guaranteed loan
45	45	program provided by the Higher Education Act of 1965, as amended, or
46	46	in an alternative education loan program.
47	47	(d) The authority, as a municipal corporation of the state,
48	48	is charged with a portion of the responsibility of the state to
49	49	provide educational opportunities in keeping with all applicable
50	50	state and federal laws. Nothing in this section shall be construed
51	51	as a prohibition against establishing policies to limit the
52	52	purchase of guaranteed student loans or alternative education loans
53	53	[to guaranteed student loans] executed by students attending school
54	54	in a certain geographical area or by students who are residents of
55	55	the area.
56	56	(f) A nonprofit corporation, whether acting at the request
57	57	of a city or cities under Subsection (e) or acting as a servicer or
58	58	administrator for another corporation that purchases or makes
59	59	guaranteed student loans or alternative education loans, or that on
60	60	its own behalf issues securities or otherwise obtains funds to
61	61	purchase or make guaranteed student loans or alternative education
62	62	loans, may:
63	63	(1) exercise the powers granted by Chapters 20 and 22,
64	64	Business Organizations Code, and any provision of Title 1, Business
65	65	Organizations Code, applicable to a nonprofit corporation [the
66	66	Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
67	67	Vernon's Texas Civil Statutes)];
68	68	(2) service loans purchased or made from its funds or
69	69	contract with another person to service the loans;
70	70	(3) grant a security interest in a trust estate
71	71	securing its securities; and
72	72	(4) make investments as authorized by Subsection (e).
73	73	(h) An alternative education loan may be made under this
74	74	section only by or on behalf of a qualified alternative education
75	75	loan lender. An alternative education loan may not be in an amount
76	76	in excess of the difference between the cost of attendance and the
77	77	amount of other student assistance to the student, other than loans
78	78	under Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C.
79	79	Section 1078-2) (relating to parent loans), for which the student
80	80	borrower may be eligible. An alternative education loan covered by
81	81	this subsection is subject to Chapter 342, Finance Code, as
82	82	applicable, except that:
83	83	(1) the maximum interest rate on the loan may not
84	84	exceed the rate permitted under Subchapter A, Chapter 303, Finance
85	85	Code; and
86	86	(2) application and origination fees may be agreed to
87	87	by the parties and assessed at the inception of the loan, provided
88	88	that if any such fees constitute additional interest under
89	89	applicable law, the effective rate of interest agreed to over the
90	90	stated term of the loan may not exceed the rate allowed by
91	91	Subchapter A, Chapter 303, Finance Code, and accrued unpaid
92	92	interest may be added to unpaid principal at the beginning of the
93	93	agreed repayment period at the borrower's option and in accordance
94	94	with the terms of the agreement for purposes of determining the
95	95	total principal amount due at the inception of the repayment
96	96	period.
97	97	SECTION 3. Subsections (a) and (d), Section 1372.033,
98	98	Government Code, are amended to read as follows:
99	99	(a) In this section:
100	100	(1) ["Additional need" means the additional need of a
101	101	qualified nonprofit corporation determined by subtracting the
102	102	floor allocation for that qualified nonprofit corporation from that
103	103	corporation's annual need.
104	104	[(2) "Annual need" means, for a qualified nonprofit
105	105	corporation, one-half of the total principal amount of Texas
106	106	eligible loans the qualified nonprofit corporation purchased in the
107	107	two most recently completed fiscal years ending June 30.
108	108	[(3) "Floor allocation" means, for a qualified
109	109	nonprofit corporation, an allocation in the amount of the lesser of
110	110	$27 million or the qualified nonprofit corporation's annual need.
111	111	[(4)] "Qualified nonprofit corporation" has the
112	112	meaning assigned by Section 53B.02(11) [53.47], Education Code.
113	113	(2) [(5) "Remaining amount to be allocated" is the
114	114	total amount to be allocated under Section 1372.022(a)(5) in a
115	115	calendar year less the sum of the floor allocations of the qualified
116	116	nonprofit corporations that have applied for a student loan bond
117	117	allocation for the calendar year.
118	118	[(6)] "Student loan bond allocation" means the total
119	119	amount of the [an] allocation for private activity bonds under
120	120	Section 1372.022(a)(5) for a program year divided by the number of
121	121	qualified nonprofit corporation applicants that comply with all
122	122	applicable application requirements for that year.
123	123	[(7) "Texas eligible loan" means a Texas loan
124	124	purchased from the originating lender by a nonprofit corporation
125	125	acting as described by Section 53.47(g), Education Code.
126	126	[(8) "Texas loan" means a guaranteed student loan, as
127	127	defined by Section 53.47, Education Code, made on behalf of a
128	128	borrower who is:
129	129	[(A) a resident of this state; or
130	130	[(B) a student attending an accredited
131	131	institution, as defined by Section 53.47, Education Code, that is
132	132	located in this state.
133	133	[(9) "Total amount to be allocated" means the total
134	134	available under Section 1372.022(a)(5) for all applicants.]
135	135	(d) Each qualified nonprofit corporation that applies for a
136	136	student loan bond allocation in compliance with all applicable
137	137	application requirements for a program year is entitled to receive
138	138	a student loan bond [a floor] allocation for that year [except as
139	139	provided by this section. If the total amount to be allocated is
140	140	less than the sum of the floor allocations for all of the
141	141	applicants, each applicant is entitled to a proportion of the total
142	142	amount to be allocated equal to the proportion its floor allocation
143	143	bears to the total of the floor allocation for all of the
144	144	applicants. A qualified nonprofit corporation whose annual need is
145	145	zero is not entitled to apply for a student loan bond allocation].
146	146	SECTION 4. Subsections (c), (e), and (f), Section 1372.033,
147	147	Government Code, are repealed.
148	148	SECTION 5. The change in law made by this Act to Section
149	149	1372.033, Government Code, applies to the allocation of the
150	150	available state ceiling under that section beginning with the 2011
151	151	program year under Chapter 1372, Government Code.
152	152	SECTION 6. This Act takes effect immediately if it receives
153	153	a vote of two-thirds of all the members elected to each house, as
154	154	provided by Section 39, Article III, Texas Constitution. If this
155	155	Act does not receive the vote necessary for immediate effect, this
156	156	Act takes effect September 1, 2011.
157	157	* * * * *