SRC-AXB S.J.R. 16 76(R)BILL ANALYSIS


Senate Research CenterS.J.R. 16
By: Barrientos
Higher Education
7/9/1999
Enrolled


DIGEST 

Currently, about 16,000 low and moderate income Texas students depend on
the Hinson-Hazelwood College Student Loan program, established in 1965, to
finance their education.  Without additional bonding authority, the loan
volume will be drastically reduced.  The Texas Constitution does not have
provisions for the sale of general obligation bonds  for the purpose of
helping to finance educational loans to students.  This amendment creates
provisions for the issuance of such bonds. 

PURPOSE

As enrolled, S.J.R. 16 requires the submission to the voters of a
constitutional amendment to authorize the Texas Higher Education
Coordinating Board to create a general obligation bond to finance
educational loans for students. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article III, Texas Constitution, by adding Section
50b-5, as follows: 

Sec.  50b-5.  ADDITIONAL STUDENT LOANS.  Authorizes the legislature by
general law to authorize the Texas Higher Education Coordinating Board
(THECB) to sell general obligation bonds, not to exceed $400 million, to
finance educational loans to students. Provides that these new obligation
bonds are in addition to bonds issued under other sections of this article.
Requires the bonds to be executed and issued in installments as prescribed
by the THECB or its successors.  Prohibits the bond maximum net effective
interest rate from exceeding the maximum rate provided by law.  Authorizes
the legislature to provide for the investment of  bond proceeds, and to
provide for the investment of an interest  and   sinking fund to pay the
bonds.  Requires income from the investment to be used for
legislatureprescribed purposes.  Sets forth provisions regarding the
payment of interest and principal on maturing bonds.  Provides that bonds
issued under this section are incontestable, after certain actions are
taken. 

SECTION 2.  Requires this proposed constitutional amendment to be submitted
to the voters at an election to be held on the earlier of the first date on
which another election on a constitutional amendment proposed by the 76th
Legislature is held, or November 2, 1999.  Sets forth required language of
for the ballot.