75R15601 CAG-D                          

         By Sibley                                              S.B. No. 576

         Substitute the following for S.B. No. 576:

         By Rangel                                          C.S.S.B. No. 576

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the establishment of the Texas New Horizons Scholarship

 1-3     Trust Fund to exempt worthy high school graduates from tuition and

 1-4     fees at public institutions of higher education.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Subchapter D, Chapter 54, Education Code, is

 1-7     amended by adding Section 54.216 to read as follows:

 1-8           Sec. 54.216.  TEXAS NEW HORIZONS SCHOLARSHIPS.  (a)  The

 1-9     Texas Higher Education Coordinating Board shall issue scholarships,

1-10     in a number to be determined by the coordinating board after

1-11     reviewing the total amount of money available to the Texas New

1-12     Horizons Scholarship Trust Fund, to qualified students.  A

1-13     scholarship may be used by the recipient to attend an eligible

1-14     public institution of higher education.  The purpose of the

1-15     scholarship is to pay for the recipient's tuition and required

1-16     fees.

1-17           (b)  The coordinating board shall adopt rules as necessary

1-18     for the administration of this section, including rules relating to

1-19     the establishment of the scholarships, the criteria for awarding a

1-20     scholarship, the determination of eligibility, and the total

1-21     scholarship amount that an eligible student may receive.

1-22           (c)  To be eligible for a scholarship under this section, a

1-23     person must:

1-24                 (1)  be a Texas resident, as defined by coordinating

 2-1     board rules;

 2-2                 (2)  be enrolled as an undergraduate student at an

 2-3     eligible institution for at least one-half of a full course load;

 2-4                 (3)  meet minimum academic standards;

 2-5                 (4)  establish financial need;

 2-6                 (5)  satisfy one or more of the eligibility

 2-7     requirements listed in Subsection (d); and

 2-8                 (6)  comply with any other requirements adopted by the

 2-9     coordinating board under this section.

2-10           (d)  In addition to the requirements of Subsection (c),

2-11     eligibility for a scholarship shall be based on the following

2-12     factors:

2-13                 (1)  the socioeconomic background of the student,

2-14     including the percentage by which the student's family is above or

2-15     below any recognized measure of poverty, the student's household

2-16     income, and the educational level of the student's parents;

2-17                 (2)  whether the student would be the first generation

2-18     of the student's family to attend or graduate from an institution

2-19     of higher education;

2-20                 (3)  whether the wealth per student of the school

2-21     district the student attended was below the average wealth per

2-22     student of school districts as determined in Chapter 41;

2-23                 (4)  whether the student has demonstrated

2-24     responsibility in the student's work in school, with the student's

2-25     family, and within the student's community, including whether the

2-26     student has been employed while in high school or whether the

2-27     student has performed substantial child-care duties or has helped

 3-1     to raise children;

 3-2                 (5)  whether the student is a resident of an urban area

 3-3     or a rural area or a resident of a central city or a suburban area

 3-4     in the state;

 3-5                 (6)  the student's performance on standardized tests;

 3-6     and

 3-7                 (7)  the student's performance on standardized tests in

 3-8     comparison with that of other students from similar socioeconomic

 3-9     backgrounds.

3-10           (e)  A person is not eligible to receive a scholarship under

3-11     this section if the person:

3-12                 (1)  has been granted a baccalaureate degree; or

3-13                 (2)  has received an athletic scholarship.

3-14           (f)  To be eligible to participate in the scholarship

3-15     program, an eligible institution must match any state funds with

3-16     the institution's local funds.

3-17           (g)  Before the date applications for scholarships are first

3-18     considered under this section, the coordinating board shall

3-19     distribute to each eligible institution the eligibility criteria

3-20     and a description of the weight given to each factor and the role

3-21     each factor plays in the decision to award scholarships.

3-22           (h)  The coordinating board shall award the scholarships from

3-23     the amount available in the Texas New Horizons Scholarship Trust

3-24     Fund.  The trust fund is established outside the treasury but is

3-25     held in trust by the comptroller.  Money in the trust fund may be

3-26     spent without appropriation and only to fund the program.  Interest

3-27     and income from the assets of the trust fund shall be credited to

 4-1     and deposited in the trust fund.  In each state fiscal year the

 4-2     coordinating board may spend from the trust fund to cover the costs

 4-3     of administering this section an amount not to exceed 2.5 percent

 4-4     of the total amount of money deposited into the trust fund in that

 4-5     fiscal year, excluding matching funds transferred to the trust fund

 4-6     under Subsection (f).

 4-7           (i)  Each eligible institution shall transfer local funds

 4-8     provided by the institution under Subsection (f) to the Texas New

 4-9     Horizons Scholarship Trust Fund. The coordinating board shall use

4-10     the funds transferred by an institution to provide scholarships to

4-11     students attending that institution.

4-12           (j)  The coordinating board may accept gifts and grants from

4-13     any public or private source for the purposes of this subchapter,

4-14     and may deposit a gift or grant to the credit of the trust fund.

4-15           (k)  The legislature may appropriate money to the trust fund.

4-16           SECTION 2.  Section 74.3012, Property Code, is amended to

4-17     read as follows:

4-18           Sec. 74.3012.  DELIVERY OF MONEY TO TEXAS NEW HORIZONS

4-19     SCHOLARSHIP TRUST [URBAN SCHOLARSHIP] FUND.   (a)  The comptroller

4-20     shall pay any portion of the total amount delivered by local

4-21     exchange companies under this chapter in excess of $2 million in

4-22     any state fiscal year to the Texas New Horizons Scholarship Trust

4-23     Fund established under Section 54.216, Education Code

4-24     [Notwithstanding  and in addition to any other provision of this

4-25     chapter or other law, a local exchange company may deliver reported

4-26     money to a scholarship fund for urban students instead of

4-27     delivering the money to the state treasurer as prescribed by

 5-1     Section 74.301].

 5-2           (b)  [A local exchange company may deliver the money under

 5-3     this section only to a scholarship fund established by one or more

 5-4     local exchange companies in this state to enable needy students

 5-5     from urban areas to attend college, technical school, or another

 5-6     postsecondary educational institution.]

 5-7           [(c)  A local exchange company shall file with the state

 5-8     treasurer a verification of money delivered under this section that

 5-9     complies with Section 74.302.]

5-10           [(d)  A claim for money delivered to a scholarship fund under

5-11     this section must be filed with the local exchange company that

5-12     delivered the money.  The local exchange company shall forward the

5-13     claim to the administrator of the scholarship fund to which the

5-14     money was delivered.  The scholarship fund shall pay the claim if

5-15     the fund determines in good faith that the claim is valid.  A

5-16     person aggrieved by a claim decision may file a suit against the

5-17     fund in a district court in the county in which the administrator

5-18     of the scholarship fund is located in accordance with Section

5-19     74.506.]

5-20           [(e)  The state treasurer shall prescribe forms and

5-21     procedures governing this section, including forms and procedures

5-22     relating to:]

5-23                 [(1)  notice of presumed abandoned property;]

5-24                 [(2)  delivery of reported money to a scholarship fund;

5-25     and]

5-26                 [(3)  filing of a claim.]

5-27           [(f)]  In this section, "local exchange company" means a

 6-1     telecommunications utility certificated to provide local exchange

 6-2     telephone service within the state and that has 50,000 or more

 6-3     access lines in service in this state and is not a telephone

 6-4     cooperative.

 6-5           [(g)  During the 1995-1996 fiscal year, the total amount of

 6-6     money that may be transferred by all local exchange companies under

 6-7     this section may not exceed $400,000.  During each subsequent state

 6-8     fiscal year, the total amount of money that may be transferred by

 6-9     all local exchange companies under this section may not exceed the

6-10     total amount of money transferred to rural scholarship funds under

6-11     Section 74.3011 during the previous state fiscal year.  The state

6-12     treasury shall keep a record of the total amount of money

6-13     transferred annually.  If the total amount of money transferred

6-14     during a state fiscal year equals the amount allowed by this

6-15     subsection, the treasury shall notify each local exchange company

6-16     that the company may not transfer any additional money to the

6-17     company's scholarship fund during the remainder of that state

6-18     fiscal year.]

6-19           SECTION 3.  (a)  Except as provided by Subsection (b) of this

6-20     section, this Act takes effect September 1, 1997.

6-21           (b)  The Texas Higher Education Coordinating Board shall

6-22     adopt the rules for awarding scholarships under Section 54.216,

6-23     Education Code, as added by this Act, not later than December 1,

6-24     1997.

6-25           SECTION 4.  The importance of this legislation and the

6-26     crowded condition of the calendars in both houses create an

6-27     emergency and an imperative public necessity that the

 7-1     constitutional rule requiring bills to be read on three several

 7-2     days in each house be suspended, and this rule is hereby suspended.