By:  Sibley                                            S.B. No. 727
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to certain nonprofit corporations that purchase or make
    1-2  student or parent loan notes.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 53.47, Education Code, is amended by
    1-5  amending Subsection (e) and by adding Subsections (f) and (g) to
    1-6  read as follows:
    1-7        (e)  In addition to establishing  an authority under the
    1-8  provisions of this chapter, the governing body of a city or cities
    1-9  may request a nonprofit corporation organized to exercise the
   1-10  powers enumerated and provided in this section for and on its
   1-11  behalf.  If the corporation agrees to exercise such powers, the
   1-12  directors of such corporation shall thereafter be appointed by and
   1-13  be subject to removal by the governing body of the city or cities,
   1-14  and except as <herein> provided in this section, Sections 53.14,
   1-15  53.15, 53.31, 53.32, 53.38, and 53.41 through 53.43 of the Texas
   1-16  Education Code shall apply to and govern such corporation, its
   1-17  procedures, and bonds.  Notwithstanding the provisions of Section
   1-18  53.42, a nonprofit corporation which has been requested to exercise
   1-19  the powers enumerated and requested in this section may invest or
   1-20  cause a trustee or custodian on behalf of such nonprofit
   1-21  corporation, to invest its funds, including the proceeds of any
   1-22  bonds, notes, or other obligations issued by such nonprofit
   1-23  corporation and any monies which are pledged to the payment thereof
   1-24  in:
    2-1              (1)  certificates of deposit or other time or demand
    2-2  accounts of banks and savings and loan associations which are
    2-3  insured by the Federal Deposit Insurance Corporation or the Federal
    2-4  Savings and Loan Insurance Corporation, provided the amount of any
    2-5  certificate of deposit in excess of that covered by such insurance
    2-6  must be secured by a first and prior pledge of government
    2-7  obligations having a market value of not less than 100 percent of
    2-8  the excess unless a nationally recognized rating agency has given
    2-9  the senior securities of the bank issuing the certificate of
   2-10  deposit the highest or next to the highest investment rating
   2-11  available;
   2-12              (2)  repurchase agreements;
   2-13              (3)  investment securities, as defined by Chapter 726,
   2-14  Acts of the 67th Legislature, Regular Session, 1981 (Article
   2-15  2529b-1, Vernon's Texas Civil Statutes); <or>
   2-16              (4)  a collective investment fund that is created as
   2-17  provided by Regulation 9 of the Office of the Comptroller of the
   2-18  Currency and that is invested in one or more types of investment
   2-19  securities or repurchase agreements;
   2-20              (5)  an investment authorized by Subchapter A, Chapter
   2-21  2256, Government Code; or
   2-22              (6)  a security issued by another nonprofit corporation
   2-23  acting under this section.
   2-24        (f)  A nonprofit corporation, whether acting at the request
   2-25  of a city or cities under Subsection (e) or on its own behalf, that
   2-26  issues securities to obtain funds to purchase or make student or
   2-27  parent loans may:
    3-1              (1)  exercise the powers granted by the Texas
    3-2  Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
    3-3  Texas Civil Statutes);
    3-4              (2)  service loans purchased or made from its funds or
    3-5  contract with another person to service the loans;
    3-6              (3)  grant a security interest in a trust estate
    3-7  securing its securities;
    3-8              (4)  purchase or make a student or parent loan that is
    3-9  guaranteed or insured, in whole or part, by one or more persons
   3-10  engaged in guaranteeing or insuring student or parent loans,
   3-11  including any agency of the federal government; and
   3-12              (5)  make investments as authorized by Subsection (e).
   3-13        (g)  A security interest in a trust estate granted under
   3-14  Subsection (f)(3) is attached and perfected at the time the
   3-15  security interest is executed and delivered by the nonprofit
   3-16  corporation.  The security interest grants to the secured party a
   3-17  first prior perfected security interest in the trust estate for the
   3-18  benefit of the secured party without regard to the location of the
   3-19  assets that constitute the trust estate.
   3-20        SECTION 2.  The importance of this legislation and the
   3-21  crowded condition of the calendars in both houses create an
   3-22  emergency and an imperative public necessity that the
   3-23  constitutional rule requiring bills to be read on three several
   3-24  days in each house be suspended, and this rule is hereby suspended,
   3-25  and that this Act take effect and be in force from and after its
   3-26  passage, and it is so enacted.