BILL ANALYSIS H.J.R. 50 By: Hernandez 02-17-95 Committee Report (Unamended) BACKGROUND Since Texas voters first approved $85 million in bonds to support the state's Hinson-Hazlewood College Student Loan Program in 1965 they have returned three times to the polls to approve bonds to fund it. In fiscal year 1993, the Hinson-Hazlewood Program became fully self-supporting. The Texas Higher Education Coordinating Board cannot meet current loan demand without new bonding authority. PURPOSE As proposed, H.J.R. 50 provides for the student loan program administered by the Texas Higher Education Coordinating Board and authorizes the issuance of bonds. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article III, Texas Constitution, by adding Section 50b-4, as follows: Sec.50b-4. ADDITIONAL STUDENT LOANS.(a)Authorizes the legislature to authorize the Texas Higher Education Coordinating Board to issue and sell general obligation bonds of the State of Texas in an amount not to exceed $400 million to finance educational loans to students. Provides that the bonds are in addition to those issued under Article III, Texas Constitution. (b) Requires the bonds to be executed in a form prescribed by the Board. (c) Requires the net effective interest rate to be borne by bonds to be set by law. (d) Authorizes the legislature to provide for the investment of bond proceeds and an interest and sinking fund to pay the bonds. Requires income from the investment to be used for purposes prescribed by the legislature. (e) Provides that while any of the bonds or interest on the bonds is outstanding, there is appropriated out of the first incoming treasury money each fiscal year, an amount sufficient to pay the principal of and interest on the bonds, less any amount in an interest and sinking fund pledged to the payment of the bonds or interest. (f) Provides that bonds issued under this section, after approval by the attorney general, registration by the comptroller of public accounts, and delivery to the purchasers, are incontestable. SECTION 2. Requires this constitutional amendment to be submitted to the voters on an election to be held November 7, 1995. Sets forth the required language for the ballot. SUMMARY OF COMMITTEE ACTION Pursuant to a notice posted on February 15, 1995, the Committee on Financial Institutions convened in a public hearing on February 20, 1995, to consider HJR 50. The following persons testified in favor of the bill: Representative Hernandez, Carol L. McDonald. The following persons testified neutrally on the bill: Kenneth Ashworth, Mack C. Adams, James McWhorter. The motion to report HJR 50 favorably to the House without amendments prevailed by the following vote: 8 Ayes, 0 Nays, 0 PNV, 1 Absent.