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.