Texas 2017 - 85th Regular

Texas Senate Bill SB1380 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R5974 MM-F
2	2	By: Seliger S.B. No. 1380
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to alternative education loans and to the use of higher
8	8	education private activity bonds by qualified alternative
9	9	education loan lenders.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 53B.02(2), Education Code, is amended to
12	12	read as follows:
13	13	(2) "Alternative education loan" means a loan other
14	14	than a guaranteed student loan that is made:
15	15	(A) to a student, a former student, or any other
16	16	person for the benefit of the student or former student; and
17	17	(B) [to or for the benefit of a student] for the
18	18	purpose of financing or refinancing all or part of the student's or
19	19	former student's cost of attendance at an accredited institution.
20	20	SECTION 2. Section 53B.12, Education Code, is amended to
21	21	read as follows:
22	22	Sec. 53B.12. TERRITORY. (a) The authority comprises only
23	23	the territory included within the boundaries of the city or cities
24	24	creating it.
25	25	(b) Subsection (a) does not restrict the ability of a
26	26	qualified nonprofit corporation to:
27	27	(1) make, purchase, or refinance guaranteed student
28	28	loans or alternative education loans inside and outside the
29	29	territory described by that subsection, provided that those loans
30	30	satisfy the requirements of Section 53B.47(b) and other applicable
31	31	law; or
32	32	(2) otherwise operate within the corporation's area of
33	33	service in accordance with this chapter.
34	34	SECTION 3. Section 53B.47, Education Code, is amended by
35	35	amending Subsections (a), (b), (c), (f), and (h) and adding
36	36	Subsection (h-1) to read as follows:
37	37	(a) An authority may, upon approval of the city or cities
38	38	which created the same, issue revenue bonds or otherwise borrow
39	39	money to obtain funds to [purchase or to] make, purchase, or
40	40	refinance guaranteed student loans or alternative education
41	41	loans. Revenue bonds issued for such purpose shall be issued in
42	42	accordance with and with the effect provided in this chapter. Such
43	43	bonds shall be payable from and secured by a pledge of revenues
44	44	derived from or by reason of the ownership of guaranteed student
45	45	loans or alternative education loans and investment income after
46	46	deduction of such expenses of operating the loan program as may be
47	47	specified by the bond resolution or trust indenture.
48	48	(b) An authority may cause money to be expended to make,
49	49	[or] purchase, or refinance [for its account] guaranteed student
50	50	loans that are guaranteed by the Texas Guaranteed Student Loan
51	51	Corporation, other guaranteed student loans, or alternative
52	52	education loans that are executed by or on behalf of students or
53	53	former students who:
54	54	(1) are residents of this state; or
55	55	(2) have been admitted to attend an accredited
56	56	institution within this state.
57	57	(c) The authority shall contract with a nonprofit
58	58	corporation, organized under the laws of this state, whereby such
59	59	corporation will provide the reports and other information required
60	60	for continued participation in a [the federally guaranteed] loan
61	61	program described by this subchapter [provided by the Higher
62	62	Education Act of 1965, as amended, or in an alternative education
63	63	loan program].
64	64	(f) A nonprofit corporation, whether acting at the request
65	65	of a city or cities under Subsection (e) or acting as a servicer or
66	66	administrator for another corporation that [purchases or] makes,
67	67	purchases, or refinances guaranteed student loans or alternative
68	68	education loans, or that on its own behalf issues securities or
69	69	otherwise obtains funds to [purchase or] make, purchase, or
70	70	refinance guaranteed student loans or alternative education loans,
71	71	may:
72	72	(1) exercise the powers granted by Chapters 20 and 22,
73	73	Business Organizations Code, and any provision of Title 1, Business
74	74	Organizations Code, applicable to a nonprofit corporation;
75	75	(2) service loans [purchased or] made, purchased, or
76	76	refinanced from its funds or contract with another person to
77	77	service the loans;
78	78	(3) grant a security interest in a trust estate
79	79	securing its securities; and
80	80	(4) make investments as authorized by Subsection (e).
81	81	(h) An alternative education loan may be made, purchased, or
82	82	refinanced under this section only by or on behalf of a qualified
83	83	alternative education loan lender. An alternative education loan
84	84	may not be in an amount that exceeds the amount permitted under
85	85	Section 144(b)(1)(B), Internal Revenue Code of 1986 [in excess of
86	86	the difference between the cost of attendance and the amount of
87	87	other student assistance to the student, other than loans under
88	88	Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C. Section
89	89	1078-2) (relating to parent loans), for which the student borrower
90	90	may be eligible]. An alternative education loan covered by this
91	91	subsection is subject to Chapter 342, Finance Code, as applicable,
92	92	except that:
93	93	(1) the maximum interest rate on the loan may not
94	94	exceed the rate permitted under Subchapter A, Chapter 303, Finance
95	95	Code; and
96	96	(2) application and origination fees may be agreed to
97	97	by the parties and assessed at the inception of the loan, provided
98	98	that if any such fees constitute additional interest under
99	99	applicable law, the effective rate of interest agreed to over the
100	100	stated term of the loan may not exceed the rate allowed by
101	101	Subchapter A, Chapter 303, Finance Code, and accrued unpaid
102	102	interest may be added to unpaid principal at the beginning of the
103	103	agreed repayment period at the borrower's option and in accordance
104	104	with the terms of the agreement for purposes of determining the
105	105	total principal amount due at the inception of the repayment
106	106	period.
107	107	(h-1) A program of general application under this chapter
108	108	for the making, purchasing, or refinancing of alternative education
109	109	loans by a qualified alternative education loan lender in
110	110	accordance with Section 144(b)(1)(B), Internal Revenue Code of
111	111	1986, is a program approved by the state for purposes of Section
112	112	144(b)(1)(B).
113	113	SECTION 4. Section 1372.002(a), Government Code, is amended
114	114	to read as follows:
115	115	(a) For purposes of this chapter, a project is:
116	116	(1) an eligible facility or facilities that are
117	117	proposed to be financed, in whole or in part, by an issue of
118	118	qualified residential rental project bonds;
119	119	(2) in connection with an issue of qualified mortgage
120	120	bonds [or qualified student loan bonds], the providing of financial
121	121	assistance to qualified mortgagors [or students] located in all or
122	122	any part of the jurisdiction of the issuer; [or]
123	123	(3) in connection with an issue of qualified student
124	124	loan bonds, the providing of guaranteed student loans or
125	125	alternative education loans that satisfy the requirements of
126	126	Section 53B.47(b), Education Code; or
127	127	(4) an eligible facility or facilities that are
128	128	proposed to be financed, in whole or in part, by an issue of bonds
129	129	other than bonds described by Subdivision (1) or (2).
130	130	SECTION 5. Section 1372.022(a), Government Code, is amended
131	131	to read as follows:
132	132	(a) If the state ceiling is computed on the basis of $75 per
133	133	capita or a greater amount, before August 15 of each year:
134	134	(1) 28.0 percent of the state ceiling is available
135	135	exclusively for reservations by issuers of qualified mortgage
136	136	bonds;
137	137	(2) 8 percent of the state ceiling is available
138	138	exclusively for reservations by issuers of state-voted issues;
139	139	(3) 2.0 percent of the state ceiling is available
140	140	exclusively for reservations by issuers of qualified small issue
141	141	bonds and enterprise zone facility bonds;
142	142	(4) 22.0 percent of the state ceiling is available
143	143	exclusively for reservations by issuers of qualified residential
144	144	rental project bonds;
145	145	(5) 10.5 percent of the state ceiling is available
146	146	exclusively for reservations by issuers of qualified student loan
147	147	bonds authorized by Section 53B.47, Education Code[, that are
148	148	nonprofit corporations able to issue a qualified scholarship
149	149	funding bond as defined by Section 150(d)(2), Internal Revenue Code
150	150	(26 U.S.C. Section 150(d)(2))]; and
151	151	(6) 29.5 percent of the state ceiling is available
152	152	exclusively for reservations by any other issuer of bonds that
153	153	require an allocation.
154	154	SECTION 6. Section 1372.0281, Government Code, is amended
155	155	by adding Subsection (c) to read as follows:
156	156	(c) The board shall allow an issuer participating in a
157	157	student loan program established under Section 53B.47, Education
158	158	Code, to use pro forma financial statements to satisfy all
159	159	information requirements of this section that relate to financial
160	160	matters.
161	161	SECTION 7. Section 1372.033, Government Code, is amended by
162	162	adding Subsection (e) to read as follows:
163	163	(e) A qualified nonprofit corporation that receives a
164	164	student loan bond allocation may use the allocation to make,
165	165	purchase, or refinance alternative education loans as defined by
166	166	Section 53B.02(2), Education Code.
167	167	SECTION 8. The change in law made by this Act to Chapter
168	168	1372, Government Code, applies to the allocation of the available
169	169	state ceiling under that chapter beginning with the 2017 program
170	170	year.
171	171	SECTION 9. This Act takes effect September 1, 2017.