H.B. No. 2274




AN ACT
relating to the continuation and functions of the Texas Guaranteed Student Loan Corporation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 57.12(a), Education Code, is amended to read as follows: (a) The Texas Guaranteed Student Loan Corporation is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the corporation is abolished and this chapter expires September 1, 2017 [2005]. SECTION 2. Sections 57.13(a), (b), and (c), Education Code, are amended to read as follows: (a) The corporation is governed by a board of 11 [nine] directors [appointed] in accordance with this section. (b) The governor, with the advice and consent of the senate, shall appoint 10 [nine] members to the board as follows: (1) five [. Four] members who must have knowledge of or experience in finance, including management of funds or business operations; (2) one [. One] member who must be a student [who is] enrolled at a postsecondary educational institution for the number of credit hours required by the institution to be classified as a full-time student of the institution; and (3) four [. Three] members who must be members of the faculty or administration of an eligible postsecondary educational institution, as defined by Section 57.46 [of this code]. (c) Appointments to the board shall be made without regard to the race, color, disability [handicap], sex, religion, age, or national origin of the appointees. SECTION 3. Sections 57.131(a), (b), (c), and (d), Education Code, are amended to read as follows: (a) In this section, "Texas trade association" means a cooperative and voluntarily joined statewide association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest. [An officer, employee, or paid consultant of a Texas trade association of institutions that originate or hold student loans or a Texas trade association in the field of higher education may not be a member of the board or a corporation employee who is exempt from the corporation's position classification schedule.] (b) A person may not be a member of the board and may not be a corporation employee employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if: (1) the person is an officer, employee, or paid consultant of a Texas trade association of institutions that originate or hold student loans or a Texas trade association in the field of higher education; or (2) the person's spouse is an officer, manager, or paid consultant of a Texas trade association of institutions that originate or hold student loans or a Texas trade association in the field of higher education. [A person who is the spouse of an officer, manager, or paid consultant of a Texas trade association described by Subsection (a) of this section may not be a member of the board and may not be a corporation employee who is exempt from the corporation's position classification schedule.] (c) A person may not be [serve as] a member of the board or act as the general counsel to the board or the corporation if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the corporation. (d) A person may not be one of the members of the board required by Section 57.13(b) [of this code] to have knowledge of or experience in finance if the person is a member of the board of directors or an employee of an eligible lender that participates in the guaranteed student loan program. SECTION 4. Subchapter B, Chapter 57, Education Code, is amended by adding Section 57.1311 to read as follows: Sec. 57.1311. TRAINING PROGRAM. (a) A person who is appointed to and qualifies for office as a member of the board may not vote, deliberate, or be counted as a member in attendance at a meeting of the board until the person completes a training program that complies with this section. (b) The training program must provide the person with information regarding: (1) the provisions of this chapter and the corporation's programs, functions, rules, and budget; (2) the results of the most recent formal audit of the corporation; (3) the requirements of laws relating to open meetings, public information, and conflicts of interest; and (4) any applicable ethics policies adopted by the corporation or the Texas Ethics Commission. SECTION 5. Section 57.14, Education Code, is amended to read as follows: Sec. 57.14. DIRECTORS' TERMS OF OFFICE. Members of the board appointed by the governor serve for terms of six years, with the terms of three [two] or four [three] members, as applicable, expiring on January 31 of each odd-numbered year. SECTION 6. Section 57.141, Education Code, is amended to read as follows: Sec. 57.141. REMOVAL OF BOARD MEMBER. (a) It is a ground for removal of an appointed member from the board that the [if a] member: (1) does not have at the time of taking office [appointment] the qualifications required by Section 57.13(b) [of this code]; (2) does not maintain during service on the board the qualifications required by Section 57.13(b) [of this code]; (3) is ineligible for membership under [violates a prohibition established by] Section 57.131 [of this code]; (4) cannot, because of illness or disability, discharge the member's duties for a substantial part of the member's term [for which the member is appointed because of illness or disability]; or (5) is absent from more than half of the regularly scheduled board meetings that the member is eligible to attend during a calendar year without an excuse approved [unless the absence is excused] by a majority vote of the board. (b) The validity of an action of the board is not affected by the fact that it is [was] taken when a ground for removal of a board member exists [existed]. (c) If the president has knowledge that a potential ground for removal exists, the president shall notify the presiding officer [chairman] of the board of the potential ground. The presiding officer [chairman] shall then notify the governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the president shall notify the next highest ranking officer of the board, who shall then notify the governor and the attorney general that a potential ground for removal exists. SECTION 7. Sections 57.19(f) and (i), Education Code, are amended to read as follows: (f) The president or the president's designee shall prepare and maintain a written policy statement to assure implementation of a program of equal employment opportunity under which all personnel transactions are made without regard to race, color, disability [handicap], sex, religion, age, or national origin. The policy statement must include: (1) personnel policies, including policies relating to recruitment, evaluation, selection, appointment, training, and promotion of personnel; (2) a comprehensive analysis of the corporation's work force that meets federal and state guidelines; (3) procedures by which a determination can be made of significant underuse in the corporation's work force of all persons for whom federal or state guidelines encourage a more equitable balance; and (4) reasonable methods to appropriately address those areas of significant underuse. (i) The board shall develop and implement [adopt] policies that clearly separate [define] the policymaking [respective] responsibilities of the board [governing body of the corporation] and the management responsibilities of the president and the staff of the corporation. SECTION 8. Sections 57.20(a), (b), and (c), Education Code, are amended to read as follows: (a) The corporation shall maintain a system to promptly and efficiently act on complaints filed with the corporation. The corporation shall maintain information about parties to the complaint, the subject matter of the complaint, a summary of the results of the review or investigation of the complaint, and its disposition [board shall prepare information of public interest describing the functions of the board and corporation and the procedures by which complaints are filed with and resolved by the board. The corporation shall make the information available to the public and appropriate state agencies]. (b) The corporation shall make information available describing its procedures for complaint investigation and resolution [board shall establish methods by which consumers and service recipients are notified of the name, mailing address, and telephone number of the corporation for the purpose of directing complaints to the board or corporation]. (c) The corporation shall periodically notify the complaint parties of the status of the complaint until final disposition [keep an information file about each complaint filed with the corporation that the corporation has authority to resolve]. SECTION 9. Section 57.21, Education Code, is amended by adding Subsections (c) and (d) to read as follows: (c) Each state agency that conducts higher education and financial aid outreach activities shall enter into a memorandum of understanding with the corporation. The memorandum of understanding must outline how the corporation and the state agency will coordinate outreach activities to maximize resources and avoid duplication. (d) The corporation shall report to the legislature not later than December 1 of each even-numbered year regarding the level of demand for student financial aid for postsecondary education in this state. SECTION 10. Subchapter B, Chapter 57, Education Code, is amended by adding Section 57.2105 to read as follows: Sec. 57.2105. TECHNOLOGY POLICY. The board shall implement a policy requiring the corporation to use appropriate technological solutions to improve the corporation's ability to perform its functions. The policy must ensure that the public is able to interact with the corporation on the Internet. SECTION 11. Sections 57.491(c), (e), and (h), Education Code, are amended to read as follows: (c) Annually, each licensing agency shall prepare a list of the agency's licensees and submit the list to the corporation in hard copy or electronic form. Using the submitted lists, the [The] corporation periodically shall: (1) identify the persons who are in default on loans guaranteed by the corporation; and (2) provide a [written] list of the names of those persons to the appropriate licensing agencies in hard copy or electronic form. (e) A licensing agency shall not renew the license of a licensee whose name is on the list provided by the corporation under Subsection (c) [of this section] unless[: [(1) the renewal is the first renewal following the agency's receipt of the list including the licensee's name among those in default; or [(2)] the licensee presents to the agency a certificate issued by the corporation certifying that: (1) [(A)] the licensee has entered a repayment agreement on the defaulted loan; or (2) [(B)] the licensee is not in default on a loan guaranteed by the corporation. (h) A licensing agency shall provide written notice of the nonrenewal policies established under Subsections (e)[, (f),] and (g) [of this section] to each applicant for a license or for renewal of a license. The corporation shall provide written notice of those same policies on each loan application form provided by the corporation and on each promissory note signed by a borrower. Failure to provide the notice required by this subsection does not affect the default status of a borrower or the prohibitions on renewal of a license held by a person in default. SECTION 12. Sections 57.761(a), (b), and (c), Education Code, are amended to read as follows: (a) The board [president] shall appoint an internal auditor for the corporation. The internal auditor serves at the will of the board, and the internal auditor's budget, audit plans, and staffing levels [appointment of an internal auditor] must be approved by the board. (b) The internal auditor shall report to the board or a board committee designated by the board [president]. The board may require the internal auditor to submit [directly] to the board certain reports specified by the board. (c) The internal auditor shall consult with the board or [a] board committee[, as designated by the board, shall meet with the internal auditor] on a regular basis at board or committee meetings. At the meetings, the internal auditor shall provide to the board or committee information regarding the progress and results of the internal auditor's audits under this section. SECTION 13. The following laws are repealed: (1) Section 57.131(e), Education Code; (2) Section 57.20(d), Education Code; and (3) Section 57.491(f), Education Code. SECTION 14. As soon as possible on or after the effective date of this Act, the governor shall appoint one additional member to the board of directors of the Texas Guaranteed Student Loan Corporation for a term expiring January 31, 2011, to ensure that the composition of the board complies with Section 57.13(b), Education Code, as amended by this Act. SECTION 15. The changes in law made by this Act to Section 57.131, Education Code, apply only to a member of the board of directors of the Texas Guaranteed Student Loan Corporation or an employee of the Texas Guaranteed Student Loan Corporation appointed or employed after the effective date of this Act. A member of the board who is serving on the effective date of this Act is governed by the law as it existed immediately before the effective date for the remainder of the member's term of office, and the former law is continued in effect for that purpose. An employee of the Texas Guaranteed Student Loan Corporation who is employed on the effective date of this Act is governed by the law in effect immediately before the effective date as long as the person remains continuously employed by the corporation, and the former law is continued in effect for that purpose. SECTION 16. This Act takes effect September 1, 2005. ______________________________ ______________________________ President of the Senate Speaker of the House I certify that H.B. No. 2274 was passed by the House on April 19, 2005, by a non-record vote. ______________________________ Chief Clerk of the House I certify that H.B. No. 2274 was passed by the Senate on May 12, 2005, by the following vote: Yeas 31, Nays 0. ______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor