BILL ANALYSIS


                                                        H.J.R. 50
                                          By: Hernandez (Sponsor)
                                                        Education
                                                         05-02-95
                                Senate Committee Report (Amended)
BACKGROUND

Since Texas voters first approved $85 million in bonds to support
the state's Hinson-Hazlewood College Student Loan Program in 1965,
voters have returned to the polls three times to approve bonds to
fund it.  In fiscal year 1993, the Hinson-Hazlewood Program became
self-supporting.  The Texas Higher Education Coordinating Board
cannot meet loan demand without new bonding authority.

PURPOSE

As proposed, H.J.R. 50 requires submission to the voters of a
constitutional amendment providing for the issuance of general
obligation bonds by the Texas Higher Education Coordinating Board.

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 by general law to authorize the Texas Higher
     Education Coordinating Board (board) or its successor 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
     bonds issued under Sections 50b, 50b-1, 50b-2, and 50b-3,
     Article III, Texas Constitution.
     
     (b)  Requires the bonds to be executed in the form
       prescribed by the board or its successor or successors.
       
       (c)  Requires the maximum net effective interest rate to be
       borne by bonds issued under this section to be set by law.
       
       (d)  Authorizes the legislature to provide for the
       investment of bond proceeds and to establish and provide for
       the investment of an interest and sinking fund to apply the
       bonds.  Requires income from the investment to be used for
       the purposes prescribed by the legislature.
       
       (e)  Appropriates out of the first money coming into the
       treasury in each fiscal year, not otherwise appropriated by
       this constitution, the amount sufficient to pay the
       principal of and interest on the bonds that mature or become
       due during the fiscal year, less any amount in an interest
       and sinking fund established under this section at the end
       of the preceding fiscal year that is 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 on November 7, 1995.  Sets
forth the required language for the ballot.