By Brown of Brazos                                    H.B. No. 2816
         77R9615 JSA-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation of nonprofit corporations to refund
 1-3     certain outstanding student loan bonds.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 53.47, Education Code, is amended by
 1-6     adding Subsection (h) to read as follows:
 1-7           (h)  The governing body of a city by ordinance or resolution
 1-8     may authorize the creation of a nonprofit corporation under this
 1-9     chapter to act on behalf of and as an instrumentality of the city
1-10     solely to exercise the powers specifically granted by this
1-11     subsection.  On approval by the city, a nonprofit corporation
1-12     created under this subsection may issue revenue bonds for the sole
1-13     purposes of paying the costs of issuing the bonds and loaning the
1-14     proceeds of the bonds to an entity that has assumed the outstanding
1-15     bond obligations of a nonprofit corporation for the limited purpose
1-16     of refunding outstanding bonds originally issued as qualified
1-17     scholarship funding bonds by a nonprofit corporation acting under
1-18     Subsection (e) that subsequently made the election permitted by
1-19     Section 150(d)(3), Internal Revenue Code of 1986, as amended, to
1-20     cease status as a qualified scholarship funding corporation.
1-21     Refunding bonds issued under this subsection are solely the
1-22     obligation of the issuing nonprofit corporation and may not
1-23     constitute a debt or obligation of the city.  The governing body of
1-24     the city must approve the articles of incorporation of the
 2-1     nonprofit corporation in the ordinance or resolution authorizing
 2-2     creation of the nonprofit corporation and must approve any
 2-3     amendments to the articles of incorporation by ordinance or
 2-4     resolution.  The corporation may be incorporated in the manner
 2-5     provided by the Texas Non-Profit Corporation Act (Article 1396-1.01
 2-6     et seq., Vernon's Texas Civil Statutes).  The secretary of state
 2-7     shall indicate on the certificate of incorporation that the
 2-8     nonprofit corporation is created under this chapter.  The board of
 2-9     directors of the nonprofit corporation shall be selected or
2-10     appointed in the manner specified by the articles of incorporation.
2-11     In addition to the specific powers granted by this subsection, the
2-12     nonprofit corporation has all powers granted under the Texas
2-13     Non-Profit Corporation Act that are necessary, incidental, or
2-14     subordinate in carrying out the purposes of this subsection.  In
2-15     this subsection, "qualified scholarship funding bond" has the
2-16     meaning assigned by Section 150(d)(2), Internal Revenue Code of
2-17     1986, as amended.
2-18           SECTION 2.  This Act takes effect immediately if it receives
2-19     a vote of two-thirds of all the members elected to each house, as
2-20     provided by Section 39, Article III, Texas Constitution.  If this
2-21     Act does not receive the vote necessary for immediate effect, this
2-22     Act takes effect September 1, 2001.