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AN ACT
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relating to guaranteed student loans and alternative education |
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loans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Section 53B.47, Education Code, |
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is amended to read as follows: |
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Sec. 53B.47. GUARANTEED STUDENT LOANS AND ALTERNATIVE |
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[ALTERNATE] EDUCATION LOANS; BONDS FOR THE PURCHASE OF EDUCATION |
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LOAN NOTES. |
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SECTION 2. Sections 53B.47(a), (b), (c), (d), (f), and (h), |
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Education Code, are amended to read as follows: |
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(a) An authority may, upon approval of the city or cities |
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which created the same, issue revenue bonds or otherwise borrow |
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money to obtain funds to purchase or to make guaranteed student |
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loans or alternative education loans. Revenue bonds issued for |
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such purpose shall be issued in accordance with and with the effect |
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provided in this chapter. Such bonds shall be payable from and |
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secured by a pledge of revenues derived from or by reason of the |
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ownership of guaranteed student loans or alternative education |
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loans and investment income after deduction of such expenses of |
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operating the loan program as may be specified by the bond |
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resolution or trust indenture. |
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(b) An authority may cause money to be expended to make or |
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purchase for its account guaranteed student loans that are |
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guaranteed by the Texas Guaranteed Student Loan Corporation, other |
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guaranteed student loans, or alternative education loans that are |
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executed by or on behalf of students who: |
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(1) are residents of this state; or |
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(2) have been admitted to attend an accredited |
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institution within this state. |
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(c) The authority shall contract with a nonprofit |
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corporation, organized under the laws of this state, whereby such |
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corporation will provide the reports and other information required |
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for continued participation in the federally guaranteed loan |
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program provided by the Higher Education Act of 1965, as amended, or |
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in an alternative education loan program. |
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(d) The authority, as a municipal corporation of the state, |
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is charged with a portion of the responsibility of the state to |
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provide educational opportunities in keeping with all applicable |
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state and federal laws. Nothing in this section shall be construed |
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as a prohibition against establishing policies to limit the |
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purchase of guaranteed student loans or alternative education loans |
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[to guaranteed student loans] executed by students attending school |
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in a certain geographical area or by students who are residents of |
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the area. |
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(f) A nonprofit corporation, whether acting at the request |
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of a city or cities under Subsection (e) or acting as a servicer or |
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administrator for another corporation that purchases or makes |
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guaranteed student loans or alternative education loans, or that on |
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its own behalf issues securities or otherwise obtains funds to |
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purchase or make guaranteed student loans or alternative education |
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loans, may: |
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(1) exercise the powers granted by Chapters 20 and 22, |
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Business Organizations Code, and any provision of Title 1, Business |
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Organizations Code, applicable to a nonprofit corporation [the
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Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
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Vernon's Texas Civil Statutes)]; |
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(2) service loans purchased or made from its funds or |
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contract with another person to service the loans; |
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(3) grant a security interest in a trust estate |
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securing its securities; and |
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(4) make investments as authorized by Subsection (e). |
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(h) An alternative education loan may be made under this |
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section only by or on behalf of a qualified alternative education |
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loan lender. An alternative education loan may not be in an amount |
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in excess of the difference between the cost of attendance and the |
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amount of other student assistance to the student, other than loans |
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under Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C. |
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Section 1078-2) (relating to parent loans), for which the student |
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borrower may be eligible. An alternative education loan covered by |
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this subsection is subject to Chapter 342, Finance Code, as |
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applicable, except that: |
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(1) the maximum interest rate on the loan may not |
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exceed the rate permitted under Subchapter A, Chapter 303, Finance |
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Code; and |
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(2) application and origination fees may be agreed to |
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by the parties and assessed at the inception of the loan, provided |
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that if any such fees constitute additional interest under |
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applicable law, the effective rate of interest agreed to over the |
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stated term of the loan may not exceed the rate allowed by |
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Subchapter A, Chapter 303, Finance Code, and accrued unpaid |
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interest may be added to unpaid principal at the beginning of the |
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agreed repayment period at the borrower's option and in accordance |
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with the terms of the agreement for purposes of determining the |
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total principal amount due at the inception of the repayment |
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period. |
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SECTION 3. Sections 1372.033(a) and (d), Government Code, |
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are amended to read as follows: |
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(a) In this section: |
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(1) ["Additional need" means the additional need of a
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qualified nonprofit corporation determined by subtracting the
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floor allocation for that qualified nonprofit corporation from that
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corporation's annual need.
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[(2)
"Annual need" means, for a qualified nonprofit
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corporation, one-half of the total principal amount of Texas
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eligible loans the qualified nonprofit corporation purchased in the
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two most recently completed fiscal years ending June 30.
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[(3)
"Floor allocation" means, for a qualified
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nonprofit corporation, an allocation in the amount of the lesser of
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$27 million or the qualified nonprofit corporation's annual need.
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[(4)] "Qualified nonprofit corporation" has the |
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meaning assigned by Section 53B.02(11) [53.47], Education Code. |
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(2) [(5)
"Remaining amount to be allocated" is the
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total amount to be allocated under Section 1372.022(a)(5) in a
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calendar year less the sum of the floor allocations of the qualified
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nonprofit corporations that have applied for a student loan bond
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allocation for the calendar year.
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[(6)] "Student loan bond allocation" means the total |
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amount of the [an] allocation for private activity bonds under |
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Section 1372.022(a)(5) for a program year divided by the number of |
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qualified nonprofit corporation applicants that comply with all |
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applicable application requirements for that year. |
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[(7)
"Texas eligible loan" means a Texas loan
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purchased from the originating lender by a nonprofit corporation
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acting as described by Section 53.47(g), Education Code.
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[(8)
"Texas loan" means a guaranteed student loan, as
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defined by Section 53.47, Education Code, made on behalf of a
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borrower who is:
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[(A) a resident of this state; or
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[(B)
a student attending an accredited
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institution, as defined by Section 53.47, Education Code, that is
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located in this state.
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[(9)
"Total amount to be allocated" means the total
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available under Section 1372.022(a)(5) for all applicants.] |
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(d) Each qualified nonprofit corporation that applies for a |
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student loan bond allocation in compliance with all applicable |
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application requirements for a program year is entitled to receive |
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a student loan bond [a floor] allocation for that year [except as
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provided by this section. If the total amount to be allocated is
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less than the sum of the floor allocations for all of the
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applicants, each applicant is entitled to a proportion of the total
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amount to be allocated equal to the proportion its floor allocation
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bears to the total of the floor allocation for all of the
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applicants. A qualified nonprofit corporation whose annual need is
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zero is not entitled to apply for a student loan bond allocation]. |
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SECTION 4. Sections 1372.033(c), (e), and (f), Government |
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Code, are repealed. |
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SECTION 5. The change in law made by this Act to Section |
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1372.033, Government Code, applies to the allocation of the |
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available state ceiling under that section beginning with the 2011 |
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program year under Chapter 1372, Government Code. |
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SECTION 6. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 2911 was passed by the House on May 3, |
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2011, by the following vote: Yeas 143, Nays 1, 1 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 2911 was passed by the Senate on May |
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23, 2011, by the following vote: Yeas 30, Nays 0 |
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. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |