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.