Enrolled Bill Summary

            The Education Code allows municipal governing boards to create higher education authorities with the power to issue tax-exempt revenue bonds for any higher education purpose found to be in a city's best interest, including purchasing or making certain guaranteed educational loans. The code also allows a municipal governing body to request a nonprofit corporation to exercise the powers otherwise provided for a higher education authority. House Bill 1938 amends the code to limit those corporate loan making powers to a qualified nonprofit corporation, defined as one that issued qualified student loan bonds on or after January 1, 1990, and before January 1, 2001, or that has been determined by the governor's office to meet a need for student loan financing that existing qualified nonprofit corporations cannot meet.

            The bill also provides for the making of education loans other than guaranteed student loans, but it restricts such lending to qualified nonprofit charitable organizations that have serviced education loans made under the Higher Education Act of 1965 for other qualified nonprofit corporations for at least 10 years, and it makes such loans generally subject to most of the consumer loan provisions of the Finance Code. The bill also exempts a higher education authority or nonprofit corporation that makes education loans from licensing requirements of the Finance Code.