1-1 By: Cuellar (Senate Sponsor - Zaffirini) H.B. No. 2568
1-2 (In the Senate - Received from the House April 26, 1999;
1-3 April 27, 1999, read first time and referred to Committee on
1-4 Education; May 6, 1999, reported favorably by the following vote:
1-5 Yeas 7, Nays 0; May 6, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the Texas Guaranteed Student Loan Corporation and its
1-9 programs.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 57.01, Education Code, is amended to read
1-12 as follows:
1-13 Sec. 57.01. DECLARATION OF POLICY. The legislature, giving
1-14 due consideration to the historical and continuing interest of the
1-15 people of the State of Texas in encouraging deserving and qualified
1-16 persons to realize their aspirations for education beyond high
1-17 school, finds and declares that postsecondary education for those
1-18 who desire such an education and are properly qualified therefor is
1-19 important to the welfare and security of this state and the nation
1-20 and, consequently, is an important public purpose. The legislature
1-21 finds and declares that the state can achieve its full economic and
1-22 social potential only if every individual has the opportunity to
1-23 contribute to the full extent of his or her capabilities and only
1-24 when financial barriers to his or her economic, social, and
1-25 educational goals are removed. It is, therefore, the purpose of
1-26 this chapter to establish the Texas Guaranteed Student Loan
1-27 Corporation to:
1-28 (1) administer a guaranteed student loan program to
1-29 assist qualified Texas students in receiving a postsecondary
1-30 education in this state or elsewhere in the nation; and
1-31 (2) [to] provide necessary and desirable services
1-32 related to the loan program, including cooperative awareness
1-33 efforts with appropriate educational and civic associations
1-34 designed to disseminate postsecondary education awareness
1-35 information, including information regarding student financial aid
1-36 and the Federal Family Education Loan Program, and other relevant
1-37 topics including the prevention of student loan default.
1-38 SECTION 2. Section 57.11, Education Code, is amended by
1-39 adding Subsection (d) to read as follows:
1-40 (d) Student loan borrower information collected, assembled,
1-41 or maintained by the corporation is confidential and is not subject
1-42 to disclosure under Chapter 552, Government Code.
1-43 SECTION 3. Section 57.12(a), Education Code, is amended to
1-44 read as follows:
1-45 (a) The Texas Guaranteed Student Loan Corporation is subject
1-46 to Chapter 325, Government Code (Texas Sunset Act). Unless
1-47 continued in existence as provided by that chapter, the corporation
1-48 is abolished and this chapter expires September 1, 2005 [2003].
1-49 SECTION 4. Subchapter B, Chapter 57, Education Code, is
1-50 amended by adding Sections 57.21 and 57.211 to read as follows:
1-51 Sec. 57.21. PROGRAMS RELATED TO STUDENT FINANCIAL AID AND
1-52 COMPLETION OF POSTSECONDARY EDUCATION. (a) The corporation shall
1-53 take an active role in coordinating, facilitating, promoting, and
1-54 providing assistance and support to:
1-55 (1) programs designed to make available to the
1-56 residents of this state information concerning postsecondary
1-57 education awareness and the availability of student financial aid,
1-58 including the Federal Family Education Loan Program, and to assist
1-59 families in obtaining needed postsecondary education financing;
1-60 (2) programs designed to prevent student loan default;
1-61 and
1-62 (3) programs designed to increase student retention
1-63 and graduation rates in postsecondary education.
1-64 (b) The corporation shall coordinate its efforts under this
2-1 section with other entities, including the Texas Higher Education
2-2 Coordinating Board, the Texas Education Agency, professional,
2-3 educational, and civic associations, postsecondary educational
2-4 institutions that participate in the corporation's programs, and
2-5 lender advisory committees established under Section 57.461.
2-6 Sec. 57.211. SUPPORT OF EDUCATIONAL PURPOSES. The
2-7 corporation may support educational purposes with the approval of
2-8 the board.
2-9 SECTION 5. Section 57.22, Education Code, is amended to read
2-10 as follows:
2-11 Sec. 57.22. APPLICATION OF THE TEXAS NON-PROFIT CORPORATION
2-12 ACT. (a) The corporation is subject to the Texas Non-Profit
2-13 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
2-14 Statutes), except that:
2-15 (1) the corporation may not make donations for the
2-16 public welfare or for charitable or[,] scientific[, or educational]
2-17 purposes or in aid of war activities;
2-18 (2) the corporation is not required to file articles
2-19 of incorporation;
2-20 (3) the corporation is not subject to voluntary or
2-21 involuntary dissolution;
2-22 (4) the corporation may not be placed in receivership;
2-23 and
2-24 (5) the corporation is not required to make reports to
2-25 the secretary of state under Article 9.01 of that Act.
2-26 (b) Subsection (a)(1) does not prohibit the corporation from
2-27 supporting educational purposes under Section 57.211.
2-28 SECTION 6. Section 57.41(c), Education Code, is amended to
2-29 read as follows:
2-30 (c) The corporation shall[, to the extent funds are
2-31 available,] make loans to eligible students, as a lender of last
2-32 resort, under the following conditions:
2-33 (1) the borrower certifies and provides evidence to
2-34 the corporation that the borrower [he/she] has made an application
2-35 to at least two qualified lenders and was unable to obtain a
2-36 guaranteed student loan from a commercial lender and is not aware
2-37 of any eligible lender in this state that is willing to make a
2-38 guaranteed student loan;
2-39 (2) the borrower also certifies to the corporation
2-40 that the borrower [he/she] was unable to obtain a guaranteed
2-41 student loan from the Texas Higher Education Coordinating Board;
2-42 (3) the corporation certifies that it is not aware of
2-43 any eligible lender in this state that is willing to make a
2-44 guaranteed student loan; and
2-45 (4) the corporation must, to the extent a market is
2-46 available, sell loans made as last resort loans within a reasonable
2-47 period of time of the date of loan origination. This provision
2-48 will not apply to any loans that cannot be sold at par. The
2-49 corporation shall maintain a separate file showing the name and
2-50 address of the student receiving such a loan and the name and
2-51 address of the involved educational institution.
2-52 SECTION 7. Section 57.43, Education Code, is amended to read
2-53 as follows:
2-54 Sec. 57.43. INSURANCE PREMIUMS. [(a)] The corporation may
2-55 impose and collect insurance premiums from eligible borrowers in an
2-56 amount not to exceed the maximum allowable under the Higher
2-57 Education Act of 1965, as amended.
2-58 [(b) If the corporation imposes an insurance premium under
2-59 this section, the corporation must impose the lowest insurance
2-60 premium practicable that:]
2-61 [(1) complies with federal requirements; and]
2-62 [(2) does not jeopardize the corporation's financial
2-63 viability.]
2-64 SECTION 8. Section 57.45(g), Education Code, is amended to
2-65 read as follows:
2-66 (g) Loans guaranteed by the corporation may be assigned or
2-67 transferred by the holders thereof to any eligible lender as
2-68 provided by the Higher Education Act of 1965, as amended,
2-69 notwithstanding the state in which the principal place of business
3-1 of any such eligible lender is located. Any loan so assigned or
3-2 transferred shall continue to be guaranteed by the corporation,
3-3 and, in the event of default, the corporation shall pay [meet] the
3-4 lender or holder [claim out of the guarantee account established]
3-5 under the [Section 57.72 of this code; provided, however, any such
3-6 subsequent holder shall be required to comply with other]
3-7 provisions of the Higher Education Act of 1965, as amended [this
3-8 chapter].
3-9 SECTION 9. Section 57.461(b), Education Code, is amended to
3-10 read as follows:
3-11 (b) The board shall appoint advisory committee members on
3-12 the recommendation of the president [executive director].
3-13 SECTION 10. Section 57.49, Education Code, is amended to
3-14 read as follows:
3-15 Sec. 57.49. COOPERATION OF STATE AGENCIES AND SUBDIVISIONS.
3-16 Each [To the extent allowed by law, each] agency and political
3-17 subdivision of the state shall cooperate with the corporation in
3-18 providing information to the agency's or political subdivision's
3-19 clients concerning student financial aid, including information
3-20 about default prevention. Each agency and political subdivision
3-21 shall provide information to the corporation on request to assist
3-22 the corporation in curing delinquent loans and collecting [attempts
3-23 to collect on] defaulted loans.
3-24 SECTION 11. Section 57.71, Education Code, is amended to
3-25 read as follows:
3-26 Sec. 57.71. RESERVE AND OPERATING FUNDS [FUND]. The
3-27 corporation shall establish [a] reserve and operating funds in
3-28 accordance with Section 422 of the Higher Education Act of 1965 (20
3-29 U.S.C. Section 1072), as amended [fund into which all money
3-30 received by the corporation shall be deposited. The corporation
3-31 shall establish accounts in that fund in accordance with this
3-32 section].
3-33 SECTION 12. Section 57.78, Education Code, is amended to
3-34 read as follows:
3-35 Sec. 57.78. INVESTMENTS[, DEPOSITORIES]. All money of the
3-36 corporation may be invested in accordance with Chapter 2256,
3-37 Government Code [in direct obligations of the United States of
3-38 America; obligations which in the opinion of the Attorney General
3-39 of the United States are general obligations of the United States
3-40 and backed by its full faith and credit; obligations guaranteed by
3-41 the United States of America; evidences of indebtedness of the
3-42 Federal Land Banks, Federal Intermediate Credit Banks, Banks for
3-43 Cooperatives, Federal Home Loan Banks, Federal National Mortgage
3-44 Association, Federal Financing Bank Participation Certificates in
3-45 the Federal Assets Financing Trust, New Housing Authority Bonds and
3-46 Project Notes fully secured by contracts with the United States or
3-47 any other agency or instrumentality of the United States of
3-48 America; and deposits or certificates of deposits of any bank or
3-49 trust company which are fully secured (to the extent not insured by
3-50 a corporation instrumentality or agency of the United States of
3-51 America) by obligations in which the corporation may invest under
3-52 the provisions hereof].
3-53 SECTION 13. Sections 57.72, 57.73, and 57.74, Education
3-54 Code, are repealed.
3-55 SECTION 14. The importance of this legislation and the
3-56 crowded condition of the calendars in both houses create an
3-57 emergency and an imperative public necessity that the
3-58 constitutional rule requiring bills to be read on three several
3-59 days in each house be suspended, and this rule is hereby suspended,
3-60 and that this Act take effect and be in force from and after its
3-61 passage, and it is so enacted.
3-62 * * * * *