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


Senate Research Center   S.J.R. 16
76R3876  CAG-DBy: Barrientos
Higher Education
3/11/1999
As Filed


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 proposed, 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.  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 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 legislature-prescribed 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.