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.