By: Delco H.B. No. 129 73R616 SOS-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the establishment of the University Bonds for the 1-3 Education of Texans program; authorizing the issuance of special 1-4 savings certificates. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 56, Education Code, is amended by adding 1-7 Subchapter J to read as follows: 1-8 SUBCHAPTER J. UNIVERSITY BONDS FOR THE EDUCATION OF TEXANS 1-9 (UBET) PROGRAM 1-10 Sec. 56.161. DEFINITIONS. In this subchapter: 1-11 (1) "Bonds" means the special savings certificates 1-12 authorized under this subchapter. 1-13 (2) "Fund" means the UBET fund created in the state 1-14 treasury by this subchapter. 1-15 (3) "Program" means the University Bonds for the 1-16 Education of Texans (UBET) program established under this 1-17 subchapter. 1-18 Sec. 56.162. ESTABLISHMENT OF PROGRAM; PURPOSE. The program 1-19 is established to provide the public with a method of saving in 1-20 advance for higher education tuition expenses and to encourage 1-21 enrollment at public and private postsecondary educational 1-22 institutions. 1-23 Sec. 56.163. ADMINISTRATIVE AUTHORITY. (a) The state 1-24 treasurer, as provided by this subchapter, shall administer the 2-1 program. 2-2 (b) The state treasurer may adopt rules necessary to carry 2-3 out the purposes of this subchapter. 2-4 (c) The state treasurer may accept a gift or grant from a 2-5 public or private source for the purposes of this subchapter. 2-6 Sec. 56.164. Issuance And Sale. (a) The state treasurer 2-7 shall issue and sell the bonds in denominations determined by the 2-8 treasurer, but the face value of a bond may not be less than $50 2-9 nor more than $100. 2-10 (b) A person may not purchase more than one bond a month. 2-11 (c) The state treasurer shall execute necessary agreements 2-12 for the bonds to be available for purchase through payroll 2-13 deductions. The bonds shall also be available for purchase 2-14 directly from the state treasurer. The bonds may be made available 2-15 for purchase through other means and at other outlets as determined 2-16 by the state treasurer. 2-17 Sec. 56.165. TERMS. (a) Each bond must be issued in the 2-18 name of a person who is younger than 18 years of age on the date of 2-19 purchase and must bear that person's name. 2-20 (b) A bond will earn interest compounded annually at a rate 2-21 determined annually by the state treasurer. 2-22 (c) The bonds may be sold at a price or under the terms 2-23 consistent with this subchapter that the state treasurer 2-24 determines. 2-25 (d) To the extent possible, the bonds shall be issued on 2-26 terms and in a form sufficient for income on the bonds to be exempt 2-27 from federal income tax. 3-1 (e) The bonds do not constitute indebtedness of the state. 3-2 Sec. 56.166. UBET FUND. (a) A special fund to be known as 3-3 the UBET fund is created in the state treasury. 3-4 (b) The fund consists of proceeds from the sale of the 3-5 bonds, gifts and grants, and interest earned on investment of the 3-6 fund. 3-7 (c) The state treasurer shall pay expenses of administering 3-8 this subchapter from the fund. 3-9 Sec. 56.167. REDEMPTION. (a) The person in whose name a 3-10 bond is issued and who enrolls in an institution of higher 3-11 education may redeem the bond on presentation of the bond to the 3-12 registrar of the institution. The registrar shall credit 110 3-13 percent of the value of the bond against any payment for tuition or 3-14 other fees of the student. The institution shall mark the bond as 3-15 redeemed and deliver the bond to the state treasurer. The state 3-16 treasurer shall reimburse the institution for the value amount of 3-17 the bond if sufficient money in the fund exists. The rules of the 3-18 state treasurer may provide for reimbursement to occur through 3-19 electronic funds transfer or other means. 3-20 (b) The state treasurer may execute agreements with private 3-21 postsecondary educational institutions for redemption of bonds in a 3-22 manner similar to that provided by Subsection (a) of this section. 3-23 The agreements may provide for redemption at 105 percent of the 3-24 face amount of the bond and reimbursement at the face amount of the 3-25 bond if sufficient money in the fund exists. 3-26 (c) On attaining age 18, the person in whose name a bond is 3-27 issued may also redeem the bond on presentation of the bond to the 4-1 state treasurer in the manner provided by rule of the state 4-2 treasurer. If the person in whose name a bond is issued dies 4-3 before redeeming the bond, the heir or devisee of the person may 4-4 redeem the bond on presentation to the state treasurer of a death 4-5 certificate. On presentation, the state treasurer shall pay the 4-6 person redeeming the bond the value amount of the bond if 4-7 sufficient money in the fund exists. 4-8 Sec. 56.168. MANDAMUS. The performance of official duties 4-9 prescribed by this subchapter, in reference to the payment of the 4-10 bonds, may be enforced in a court of competent jurisdiction by 4-11 mandamus or other appropriate proceedings. 4-12 Sec. 56.169. REPLACEMENT OF BOND. The state treasurer may 4-13 provide for the replacement of any bond that is mutilated, lost, or 4-14 destroyed. 4-15 Sec. 56.170. MANAGEMENT. Money in the fund shall be 4-16 invested by the state treasurer in investments authorized for the 4-17 investment of state funds generally. 4-18 Sec. 56.171. EXEMPTION FROM TAXATION. Bonds issued under 4-19 this subchapter may not be taxed by the state or any of its 4-20 political subdivisions. 4-21 SECTION 2. This Act takes effect January 1, 1994. 4-22 SECTION 3. The importance of this legislation and the 4-23 crowded condition of the calendars in both houses create an 4-24 emergency and an imperative public necessity that the 4-25 constitutional rule requiring bills to be read on three several 4-26 days in each house be suspended, and this rule is hereby suspended.