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.