82R2185 KSD-D
 
  By: Zaffirini S.B. No. 40
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the functions of the Texas Guaranteed Student Loan
  Corporation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 57.01 and 57.11, Education Code, are
  amended to read as follows:
         Sec. 57.01.  DECLARATION OF POLICY. The legislature, giving
  due consideration to the historical and continuing interest of the
  people of the State of Texas in encouraging deserving and qualified
  persons to realize their aspirations for education beyond high
  school, finds and declares that postsecondary education for
  qualified persons [those] who desire to pursue such [an] education
  [and are properly qualified therefor] is important to the welfare
  and security of this state and the nation and, consequently, is an
  important public purpose. The legislature finds and declares that
  the state can achieve its full economic and social potential only if
  every individual has the opportunity to contribute to the full
  extent of the individual's [his or her] capabilities and only when
  financial barriers to the individual's [his or her] economic,
  social, and educational goals are removed. It is, therefore, the
  purpose of this chapter to establish the Texas Guaranteed Student
  Loan Corporation to promote and improve the postsecondary
  educational access and success of students in this state and the
  nation by:
               (1)  administering [administer] a guaranteed student
  loan program or any other student loan program the corporation is
  authorized, qualified, or required by federal or other law to
  administer in order to assist qualified [Texas] students in Texas
  and across the nation in receiving a postsecondary education in
  this state or elsewhere in the nation; and
               (2)  providing students and families, student loan
  borrowers, educational institutions, and other entities both in
  this state and nationally, on a fee-for-service basis when the
  corporation determines appropriate, with [provide] necessary and
  desirable information, products, tools, functions, and services
  related to public and private student loan and student financial
  aid programs [the loan program], including:
                     (A)  support services relating to financial
  literacy, student loan debt repayment considerations, student loan
  default prevention, policy training, the effective and efficient
  delivery of higher education student financial aid, and college
  promotion outreach; and
                     (B)  cooperative awareness efforts with
  appropriate educational and civic associations designed to
  disseminate postsecondary education awareness information,
  including information regarding student financial aid, [and] the
  Federal Family Education Loan Program and other student loan
  programs, and other relevant topics [including the prevention of
  student loan default].
         Sec. 57.11.  TEXAS GUARANTEED STUDENT LOAN CORPORATION. (a)
  The Texas Guaranteed Student Loan Corporation is created to:
               (1)  administer any student loan program the
  corporation is required, qualified, or authorized by federal or
  other law to administer and to provide any related information,
  products, tools, functions, and services in accordance with
  applicable law, including the Federal Family Education Loan Program
  and the Federal Direct Student Loan Program; and
               (2)  administer any other program or function [the
  programs] authorized by this chapter and provide related services.
         (b)  The corporation is a public nonprofit corporation and,
  except as otherwise provided in this chapter, has all the powers and
  duties incident to a nonprofit corporation under Chapter 22,
  Business Organizations Code [the Texas Non-Profit Corporation Act
  (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)].
         (c) [(b)] Except as otherwise provided by law, all expenses
  of the corporation shall be paid from revenue [income] of the
  corporation.
         (d) [(c)] The corporation is subject to Chapters [Chapter]
  551 and 552, Government Code.
         (e) [(d)] Student loan borrower information collected,
  assembled, or maintained by the corporation is confidential and is
  not subject to disclosure under Chapter 552, Government Code.
         SECTION 2.  Section 57.1311(b), Education Code, is amended
  to read as follows:
         (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 that primarily relate to
  or affect the business of the corporation [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 3.  Section 57.18, Education Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  The board is not subject to Section 551.125, Government
  Code. Notwithstanding any other provision of Chapter 551,
  Government Code, any of the corporation's directors may attend any
  board meeting by telephone conference call, provided that the
  telephone conference is audible to the public at the meeting
  location specified in the meeting's notice during each part of the
  meeting that is required to be open to the public.
         SECTION 4.  Section 57.19(d), Education Code, is amended to
  read as follows:
         (d)  The president or the president's designee shall develop
  a [an intra-agency] career ladder program for the corporation. The
  program shall require internal corporate [intra-agency] postings
  of all nonentry level positions concurrently with any public
  posting.
         SECTION 5.  Section 57.20(a), Education Code, is amended to
  read as follows:
         (a)  The corporation shall appoint an ombudsman [maintain a
  system] to promptly and efficiently act on complaints filed with
  the corporation. The ombudsman [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.
         SECTION 6.  Sections 57.21(a) and (c), Education Code, are
  amended to read as follows:
         (a)  The corporation shall take an active role in
  coordinating, facilitating, promoting, and providing assistance
  and support to:
               (1)  programs that focus on and disseminate [designed
  to make available to the residents of this state] information
  regarding [concerning] postsecondary education awareness and the
  availability of student financial aid[, including the Federal
  Family Education Loan Program,] and that [to] assist families in
  obtaining [needed] postsecondary education financing;
               (2)  programs designed to assist students, families,
  borrowers, and schools in preventing [prevent] student loan default
  throughout the life of the loan, provided that such programs are
  funded by statutory or regulatory mandate, compensation, grant,
  contract, award, or other appropriate means; and
               (3)  programs designed to increase student retention
  and graduation rates in postsecondary education.
         (c)  To the extent practicable, each [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 may [must] outline
  how the corporation and the state agency will coordinate outreach
  activities to maximize resources and avoid duplication.
         SECTION 7.  The heading to Section 57.22, Education Code, is
  amended to read as follows:
         Sec. 57.22.  APPLICATION OF BUSINESS ORGANIZATIONS CODE [THE
  TEXAS NON-PROFIT CORPORATION ACT].
         SECTION 8.  Section 57.22(a), Education Code, is amended to
  read as follows:
         (a)  The corporation is subject to Chapter 22, Business
  Organizations Code [the Texas Non-Profit Corporation Act (Article
  1396-1.01 et seq., Vernon's Texas Civil Statutes)], except that:
               (1)  the corporation may not make donations for the
  public welfare or for charitable or scientific purposes or in aid of
  war activities;
               (2)  the corporation is not required to file articles
  of incorporation;
               (3)  the corporation is not subject to voluntary or
  involuntary dissolution;
               (4)  the corporation may not be placed in receivership;
  and
               (5)  the corporation is not required to make reports to
  the secretary of state under Section 22.357, Business Organizations
  Code [Article 9.01 of that Act].
         SECTION 9.  Section 57.24, Education Code, is amended to
  read as follows:
         Sec. 57.24.  AUTHORITY TO PARTICIPATE IN OTHER
  REVENUE-GENERATING ACTIVITIES; LIMITATIONS. (a)  The corporation
  may participate in a revenue-generating activity that is reasonably
  aligned [consistent] with or that may further the corporation's
  purposes or business if the board determines that the revenue from
  the activity may:
               (1)  [is sufficient to] cover the costs of the
  activity; and
               (2)  provide funds to support activities approved by
  the board as the corporation's philanthropic activities or as
  having strategic or positioning importance to the corporation [may
  contribute to a reduction in the insurance premium paid by students
  under Section 57.43 of this code].
         (b)  If[, under Subsection (a) of this section,] the board
  authorizes the corporation to perform additional services under
  Subsection (a), the corporation may not require postsecondary
  educational institutions or students to use those services unless
  required by state or federal law.
         SECTION 10.  Section 57.41(a), Education Code, is amended to
  read as follows:
         (a)  The corporation shall serve as the designated guarantee
  agency under the Federal Family Education Loan Program in
  accordance with [loans made to eligible borrowers by eligible
  lenders as provided by the federal guaranteed student loan program
  under] the Higher Education Act of 1965, 20 U.S.C. Section [Sec.]
  1001 et seq., as amended, regulations adopted under that act, and
  other applicable federal law.
         SECTION 11.  Section 57.461, Education Code, is amended to
  read as follows:
         Sec. 57.461.  [POSTSECONDARY EDUCATIONAL INSTITUTIONS AND
  LENDER] ADVISORY COMMITTEES. [(a)]  The corporation shall
  establish advisory committees as the board considers appropriate [:
               [(1)  an advisory committee that is composed of 15
  members who represent the postsecondary educational institutions
  that participate in the corporation's guaranteed student loan
  program; and
               [(2)  an advisory committee that is composed of 12
  members including:
                     [(A)  one member who represents the Texas Higher
  Education Coordinating Board; and
                     [(B)  11 members who represent lenders that
  participate in the corporation's guaranteed student loan program].
         [(b)  The board shall appoint advisory committee members on
  the recommendation of the president.
         [(c)  The board may establish other advisory committees as
  the board considers necessary.
         [(d)  The board shall:
               [(1)  specify each advisory committee's purpose and
  duties; and
               [(2)  require each committee to report to the board in a
  manner specified by the board relating to each committee's
  activities and work results.]
         SECTION 12.  Sections 57.47(a), (b), and (d), Education
  Code, are amended to read as follows:
         (a)  If a student borrower defaults on a loan and the
  corporation is required to honor the guarantee, the corporation may
  [or the Texas Higher Education Coordinating Board shall] bring suit
  against the defaulting party in accordance with the requirements of
  the Higher Education Act of 1965, 20 U.S.C. Section [Sec.] 1001 et
  seq., as amended.
         (b)  A suit against a defaulting party under this section may
  be brought in the county in which the defaulting person resides, in
  which the lender is located, or in Travis or Williamson County.
         (d)  Notwithstanding any other law, if the corporation [or
  the Texas Higher Education Coordinating Board] brings suit against
  a defaulting party under this section, the corporation [or the
  coordinating board, as appropriate,] shall pay 50 percent of the
  filing fee or other costs of court taxed and collected in advance
  that are in effect on the date on which the suit is filed. If the
  defaulting borrower prevails in the suit filed under this section,
  the corporation [or the coordinating board, as appropriate,] shall
  pay the remaining 50 percent of the statutory filing fee on the date
  of the final disposition of the suit. If the corporation [or
  coordinating board] prevails in the suit:
               (1)  the judgment shall find the defaulting borrower
  liable to the corporation [or the coordinating board, as
  appropriate,] for the amount of the filing fee; and
               (2)  the corporation [or coordinating board, as
  appropriate,] shall pay the remaining 50 percent of the statutory
  filing fee not later than one week after the date on which the
  defaulting borrower pays to the corporation [or coordinating board,
  as appropriate,] the full amount, including the filing fee, for
  which the borrower is liable to the corporation [or coordinating
  board].
         SECTION 13.  Section 57.48(a), Education Code, is amended to
  read as follows:
         (a)  Except as provided by Subsection (g), the corporation
  shall report to the comptroller the name of any person who is in
  default on a loan guaranteed or administered under this chapter.
  The report must contain the information and be submitted in the
  manner and with the frequency required by rules of the comptroller.
         SECTION 14.  Sections 57.481(a), (b), and (c), Education
  Code, are amended to read as follows:
         (a)  [In this section, "loan default rate" means the rate at
  which student borrowers default on loans guaranteed by the
  corporation as determined by the corporation in compliance with
  federal guidelines.
         [(b)]  The corporation shall take a comprehensive and [an]
  active role in coordinating, facilitating, and providing technical
  assistance on guaranteed student loan default prevention and
  reduction initiatives and programs that promote responsible
  borrowing, financial literacy, debt management, research, and
  informed policymaking [in the state] and shall work with the
  appropriate state agencies and other entities inside and outside
  this state, including eligible postsecondary educational
  institutions, eligible lenders, servicers, secondary markets, the
  Texas Higher Education Coordinating Board, the Texas [Central]
  Education Agency, [and] state professional and occupational
  licensing agencies, and the United States Department of Education.
         (b) [(c)]  The corporation shall maintain a system of
  communication among the appropriate state agencies and entities to
  address student [reduce] loan default prevention issues [claims].
         SECTION 15.  Section 57.49, Education Code, is amended to
  read as follows:
         Sec. 57.49.  COOPERATION OF STATE AGENCIES AND SUBDIVISIONS.
  Each agency and political subdivision of the state shall cooperate
  with the corporation in providing information to the agency's or
  political subdivision's clients concerning student financial aid,
  including information about delinquency, default prevention, and
  life-of-loan issues. Each agency and political subdivision shall
  provide information to the corporation on request to assist the
  corporation in curing delinquent loans, [and] collecting defaulted
  loans, and developing information and reports concerning
  responsible borrowing.
         SECTION 16.  Sections 57.50, 57.71, and 57.78, Education
  Code, are amended to read as follows:
         Sec. 57.50.  NONDISCRIMINATION. Neither the corporation nor
  an eligible lender may discriminate against an eligible student in
  making a loan or loan guarantee on the basis of race, age, religion,
  or sex or any other basis prohibited by applicable law.
         Sec. 57.71.  RESERVE AND OPERATING FUNDS. The corporation
  shall establish reserve and operating funds in accordance with
  Sections [Section] 422, 422A, and 422B of the Higher Education Act
  of 1965 (20 U.S.C. Sections [Section] 1072, 1072a, and 1072b), as
  amended.
         Sec. 57.78.  INVESTMENTS. The reserve and operating funds
  established by the corporation under Section 57.71 shall [All money
  of the corporation may] be invested in accordance with Sections
  422A and 422B of the Higher Education Act of 1965 (20 U.S.C.
  Sections 1072a and 1072b), as amended, or other applicable federal
  law [Chapter 2256, Government Code].
         SECTION 17.  The following laws are repealed:
               (1)  Sections 57.19(g) and (h), Education Code;
               (2)  Sections 57.41(b), (c), and (d), Education Code;
               (3)  Section 57.42, Education Code;
               (4)  Section 57.43, Education Code;
               (5)  Section 57.44, Education Code;
               (6)  Section 57.45, Education Code;
               (7)  Section 57.46, Education Code; and
               (8)  Sections 57.481(d), (e), (f), (g), and (h),
  Education Code.
         SECTION 18.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2011.