1-1 By: Sibley S.B. No. 727
1-2 (In the Senate - Filed February 23, 1995; February 23, 1995,
1-3 read first time and referred to Committee on Education;
1-4 March 22, 1995, reported favorably by the following vote: Yeas 9,
1-5 Nays 0; March 22, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to certain nonprofit corporations that purchase or make
1-9 student or parent loan notes.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 53.47, Education Code, is amended by
1-12 amending Subsection (e) and by adding Subsections (f) and (g) to
1-13 read as follows:
1-14 (e) In addition to establishing an authority under the
1-15 provisions of this chapter, the governing body of a city or cities
1-16 may request a nonprofit corporation organized to exercise the
1-17 powers enumerated and provided in this section for and on its
1-18 behalf. If the corporation agrees to exercise such powers, the
1-19 directors of such corporation shall thereafter be appointed by and
1-20 be subject to removal by the governing body of the city or cities,
1-21 and except as <herein> provided in this section, Sections 53.14,
1-22 53.15, 53.31, 53.32, 53.38, and 53.41 through 53.43 of the Texas
1-23 Education Code shall apply to and govern such corporation, its
1-24 procedures, and bonds. Notwithstanding the provisions of Section
1-25 53.42, a nonprofit corporation which has been requested to exercise
1-26 the powers enumerated and requested in this section may invest or
1-27 cause a trustee or custodian on behalf of such nonprofit
1-28 corporation, to invest its funds, including the proceeds of any
1-29 bonds, notes, or other obligations issued by such nonprofit
1-30 corporation and any monies which are pledged to the payment thereof
1-31 in:
1-32 (1) certificates of deposit or other time or demand
1-33 accounts of banks and savings and loan associations which are
1-34 insured by the Federal Deposit Insurance Corporation or the Federal
1-35 Savings and Loan Insurance Corporation, provided the amount of any
1-36 certificate of deposit in excess of that covered by such insurance
1-37 must be secured by a first and prior pledge of government
1-38 obligations having a market value of not less than 100 percent of
1-39 the excess unless a nationally recognized rating agency has given
1-40 the senior securities of the bank issuing the certificate of
1-41 deposit the highest or next to the highest investment rating
1-42 available;
1-43 (2) repurchase agreements;
1-44 (3) investment securities, as defined by Chapter 726,
1-45 Acts of the 67th Legislature, Regular Session, 1981 (Article
1-46 2529b-1, Vernon's Texas Civil Statutes); <or>
1-47 (4) a collective investment fund that is created as
1-48 provided by Regulation 9 of the Office of the Comptroller of the
1-49 Currency and that is invested in one or more types of investment
1-50 securities or repurchase agreements;
1-51 (5) an investment authorized by Subchapter A, Chapter
1-52 2256, Government Code; or
1-53 (6) a security issued by another nonprofit corporation
1-54 acting under this section.
1-55 (f) A nonprofit corporation, whether acting at the request
1-56 of a city or cities under Subsection (e) or on its own behalf, that
1-57 issues securities to obtain funds to purchase or make student or
1-58 parent loans may:
1-59 (1) exercise the powers granted by the Texas
1-60 Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
1-61 Texas Civil Statutes);
1-62 (2) service loans purchased or made from its funds or
1-63 contract with another person to service the loans;
1-64 (3) grant a security interest in a trust estate
1-65 securing its securities;
1-66 (4) purchase or make a student or parent loan that is
1-67 guaranteed or insured, in whole or part, by one or more persons
1-68 engaged in guaranteeing or insuring student or parent loans,
2-1 including any agency of the federal government; and
2-2 (5) make investments as authorized by Subsection (e).
2-3 (g) A security interest in a trust estate granted under
2-4 Subsection (f)(3) is attached and perfected at the time the
2-5 security interest is executed and delivered by the nonprofit
2-6 corporation. The security interest grants to the secured party a
2-7 first prior perfected security interest in the trust estate for the
2-8 benefit of the secured party without regard to the location of the
2-9 assets that constitute the trust estate.
2-10 SECTION 2. The importance of this legislation and the
2-11 crowded condition of the calendars in both houses create an
2-12 emergency and an imperative public necessity that the
2-13 constitutional rule requiring bills to be read on three several
2-14 days in each house be suspended, and this rule is hereby suspended,
2-15 and that this Act take effect and be in force from and after its
2-16 passage, and it is so enacted.
2-17 * * * * *