1-1                                   AN ACT
 1-2     relating to action by certain occupational regulatory agencies
 1-3     against certain recipients of student financial assistance.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Title 2, Occupations Code, is amended by adding
 1-6     Chapter 56 to read as follows:
 1-7                  CHAPTER 56.  ACTION AGAINST RECIPIENTS OF
 1-8                        STUDENT FINANCIAL ASSISTANCE
 1-9           Sec. 56.001.  DEFINITIONS. In this chapter:
1-10                 (1)  "Administering entity" means a governmental entity
1-11     that administers a student loan, student loan repayment, or
1-12     scholarship program.
1-13                 (2)  "License" means a license, certificate,
1-14     registration, permit, or other authorization that:
1-15                       (A)  is issued by a licensing authority; and
1-16                       (B)  a person must obtain to practice or engage
1-17     in a particular business, occupation, or profession.
1-18                 (3)  "Licensing authority" means a department,
1-19     commission, board, office, or other agency of the state that issues
1-20     a license.
1-21                 (4)  "Scholarship contract" means an agreement by this
1-22     state, an agency of this state, or the United States to make a
1-23     grant to a person to support the person while attending a public or
1-24     private institution of higher education or other postsecondary
 2-1     educational establishment in exchange for the person's agreement to
 2-2     perform a service obligation.
 2-3                 (5)  "Student loan" means a loan made to a person to
 2-4     support the person while attending a public or private institution
 2-5     of higher education or other postsecondary educational
 2-6     establishment that is:
 2-7                       (A)  owed to this state, an agency of this state,
 2-8     or the United States; or
 2-9                       (B)  guaranteed by this state, an agency of this
2-10     state, or the United States.
2-11                 (6)  "Student loan repayment contract" means an
2-12     agreement by this state, an agency of this state, or the United
2-13     States to repay all or part of a person's student loan in exchange
2-14     for the person's agreement to perform a service obligation.
2-15           Sec. 56.002.  APPLICABILITY. This chapter applies only to the
2-16     following licensing authorities:
2-17                 (1)  Texas Board of Chiropractic Examiners;
2-18                 (2)  State Board of Dental Examiners;
2-19                 (3)  Texas State Board of Podiatric Medical Examiners;
2-20     and
2-21                 (4)  Texas State Board of Medical Examiners.
2-22           Sec. 56.003.  AUTHORITY TO TAKE ACTION IN EVENT OF DEFAULT OR
2-23     BREACH. On receipt of information from an administering entity that
2-24     a person has defaulted on a student loan or has breached a student
2-25     loan repayment contract or scholarship contract by failing to
2-26     perform the person's service obligation under the contract, a
2-27     licensing authority may:
 3-1                 (1)  deny the person's application for a license or
 3-2     license renewal;
 3-3                 (2)  suspend the person's license; or
 3-4                 (3)  take other disciplinary action against the person.
 3-5           Sec. 56.004.  REBUTTABLE PRESUMPTION. A determination by an
 3-6     administering entity that a person has defaulted on a student loan
 3-7     or has breached a student loan repayment contract or scholarship
 3-8     contract by failing to perform the person's service obligation
 3-9     under the contract creates a rebuttable presumption that the person
3-10     has committed the default or breach.
3-11           Sec. 56.005.  RESCISSION OF ACTION. A licensing authority may
3-12     rescind any action taken under Section 56.003 on the receipt of
3-13     information from an administering entity that the person against
3-14     whom the action was taken has:
3-15                 (1)  entered into an agreement with the administering
3-16     entity to:
3-17                       (A)  repay the student loan;
3-18                       (B)  perform the service obligation; or
3-19                       (C)  pay any damages required by the student loan
3-20     repayment contract or scholarship contract; or
3-21                 (2)  taken other action resulting in the person no
3-22     longer being in default on the student loan or in breach of the
3-23     student loan repayment contract or scholarship contract.
3-24           Sec. 56.006.  REINSTATEMENT OF ACTION. A licensing authority
3-25     may reinstate any action taken under Section 56.003 and may take
3-26     other disciplinary action on the receipt of information from an
3-27     administering entity that the person against whom the action was
 4-1     taken has:
 4-2                 (1)  defaulted on or breached an agreement under
 4-3     Section 56.005(1); or
 4-4                 (2)  otherwise defaulted on the student loan or
 4-5     breached the student loan repayment contract or scholarship
 4-6     contract.
 4-7           SECTION 2.  This Act takes effect immediately if it receives
 4-8     a vote of two-thirds of all the members elected to each house, as
 4-9     provided by Section 39, Article III, Texas Constitution.  If this
4-10     Act does not receive the vote necessary for immediate effect, this
4-11     Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1755 was passed by the House on April
         23, 2001, by the following vote:  Yeas 144, Nays 0, 2 present, not
         voting.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1755 was passed by the Senate on May
         22, 2001, by the following vote:  Yeas 30, Nays 0, 1 present, not
         voting.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor