74R10324 SMH-D By Dukes H.B. No. 1592 Substitute the following for H.B. No. 1592: By Gallego C.S.H.B. No. 1592 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 K to read as follows: 1-8 SUBCHAPTER K. UNIVERSITY BONDS FOR THE EDUCATION OF TEXANS 1-9 (UBET) PROGRAM 1-10 Sec. 56.181. 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 by this subchapter. 1-17 Sec. 56.182. ESTABLISHMENT OF PROGRAM; PURPOSE. The program 1-18 is established to provide the public with a method of saving in 1-19 advance for higher education tuition expenses and to encourage 1-20 enrollment at institutions of higher education. 1-21 Sec. 56.183. ADMINISTRATIVE AUTHORITY. (a) The state 1-22 treasurer, as provided by this subchapter, shall administer the 1-23 program. 1-24 (b) The state treasurer may adopt rules necessary to carry 2-1 out the purposes of this subchapter. 2-2 (c) The state treasurer may accept a gift or grant from a 2-3 public or private source for the purposes of this subchapter. 2-4 Sec. 56.184. Issuance And Sale. (a) The state treasurer 2-5 shall issue and sell the bonds in denominations determined by the 2-6 treasurer, but the face amount of a bond may not be less than $25. 2-7 (b) The state treasurer shall execute necessary agreements 2-8 for the bonds to be available for purchase through payroll 2-9 deductions. The bonds shall also be available for purchase 2-10 directly from the state treasurer. The bonds may be made available 2-11 for purchase through other means and at other outlets as determined 2-12 by the state treasurer. 2-13 Sec. 56.185. TERMS. (a) Each bond must be issued in the 2-14 name of a person who is younger than 18 years of age on the date of 2-15 purchase and must bear that person's name. 2-16 (b) A bond shall earn interest compounded annually at a rate 2-17 determined annually by the state treasurer. 2-18 (c) The bonds may be sold at a price or under the terms 2-19 consistent with this subchapter that the state treasurer 2-20 determines. The state treasurer may adopt more than one plan for 2-21 the payment of the purchase price of bonds issued under this 2-22 subchapter. 2-23 (d) To the extent possible, the bonds shall be issued on 2-24 terms and in a form sufficient for interest on the bonds to be 2-25 exempt from federal income tax. 2-26 (e) The bonds do not constitute indebtedness of the state. 2-27 Sec. 56.186. UBET FUND. (a) A fund to be known as the UBET 3-1 fund is created in the state treasury. 3-2 (b) The fund consists of proceeds from the sale of the 3-3 bonds, gifts and grants, and interest earned on investment of the 3-4 fund. 3-5 (c) The state treasurer shall pay expenses of administering 3-6 this subchapter from the fund. 3-7 (d) The state treasurer shall establish a separate account 3-8 in the fund for each person in whose name a bond is issued under 3-9 this subchapter. The state treasurer shall deposit to the credit 3-10 of the account the payment or payments of the purchase price of the 3-11 bond and the interest on the bond. 3-12 Sec. 56.187. REDEMPTION. (a) The person in whose name a 3-13 bond is issued and who enrolls in an institution of higher 3-14 education may redeem the bond on presentation of the bond to the 3-15 registrar of the institution. The registrar shall credit the face 3-16 amount of the bond and the accrued interest on the bond against any 3-17 payment for tuition or other fees of the student. The state 3-18 treasurer shall reimburse the institution for the face amount of 3-19 the bond and the accrued interest on the bond in accordance with 3-20 rules adopted by the state treasurer. The rules may provide for 3-21 reimbursement through electronic funds transfer or other means. 3-22 (b) The person in whose name a bond is issued and who 3-23 enrolls in a private or independent institution of higher education 3-24 as defined by Section 61.003 or an institution of higher education 3-25 outside of this state may redeem the bond on presentation of the 3-26 bond to the state treasurer in the manner provided by rule of the 3-27 state treasurer. On presentation, the state treasurer shall pay 4-1 the person the face amount of the bond and the accrued interest on 4-2 the bond. 4-3 (c) On attaining age 18, the person in whose name a bond is 4-4 issued may also redeem the bond on presentation of the bond to the 4-5 state treasurer in the manner provided by rule of the state 4-6 treasurer. If the person in whose name a bond is issued dies 4-7 before redeeming the bond, the heir or devisee of the person may 4-8 redeem the bond on presentation to the state treasurer of a death 4-9 certificate. On presentation, the state treasurer shall pay the 4-10 person redeeming the bond the face amount of the bond and the 4-11 accrued interest on the bond. 4-12 Sec. 56.188. MANDAMUS. The performance of official duties 4-13 prescribed by this subchapter, in reference to the payment of the 4-14 bonds, may be enforced in a court by mandamus or other appropriate 4-15 proceedings. 4-16 Sec. 56.189. REPLACEMENT OF BOND. The state treasurer may 4-17 provide for the replacement of any bond that is mutilated, lost, or 4-18 destroyed. 4-19 Sec. 56.190. MANAGEMENT. (a) Money in the fund shall be 4-20 invested by the state treasurer in investments authorized for the 4-21 investment of state funds generally. 4-22 (b) The state treasurer is immune from liability for any 4-23 losses from investments under Subsection (a). 4-24 Sec. 56.191. EXEMPTION FROM TAXATION. Bonds issued under 4-25 this subchapter may not be taxed by the state or any of its 4-26 political subdivisions. 4-27 Sec. 56.192. SCHOLARSHIP PROGRAM. (a) The state treasurer 5-1 shall establish a program under this subchapter to provide 5-2 economically disadvantaged youths with scholarships to institutions 5-3 of higher education. The board by rule shall adopt criteria for 5-4 the determination of economic disadvantage. 5-5 (b) The state treasurer shall encourage persons to 5-6 contribute to the purchase of bonds for the benefit of economically 5-7 disadvantaged youths. 5-8 (c) The state treasurer shall hold a bond purchased under 5-9 the scholarship program and redeem the bond at the institution of 5-10 higher education in which a person awarded a scholarship under this 5-11 section enrolls. 5-12 Sec. 56.193. GUARANTEE OF ADMISSION. This subchapter is not 5-13 a promise or guarantee that a person will be: 5-14 (1) admitted to any institution of higher education; 5-15 (2) admitted to a particular institution of higher 5-16 education; 5-17 (3) allowed to continue enrollment at an institution 5-18 of higher education after admission; or 5-19 (4) graduated from an institution of higher education. 5-20 Sec. 56.194. REPORTS. (a) The state treasurer periodically 5-21 shall provide each purchaser of a bond issued under this subchapter 5-22 a report of: 5-23 (1) the balance in the account in the fund established 5-24 for the person in whose name the bond was issued; 5-25 (2) the payments for the bond deposited to the credit 5-26 of the account; and 5-27 (3) the interest credited to the account. 6-1 (b) The state treasurer annually shall deliver to the 6-2 governor, lieutenant governor, and speaker of the house of 6-3 representatives a report regarding the status of the fund. 6-4 SECTION 2. This Act takes effect January 1, 1996. 6-5 SECTION 3. The importance of this legislation and the 6-6 crowded condition of the calendars in both houses create an 6-7 emergency and an imperative public necessity that the 6-8 constitutional rule requiring bills to be read on three several 6-9 days in each house be suspended, and this rule is hereby suspended.