By Brown of Brazos                                    H.B. No. 2816
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation of nonprofit corporations to refund
 1-3     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 a new Subsection (h) to read as follows:
 1-7           (h)  The governing body of a city is authorized to have
 1-8     created hereunder a nonprofit corporation to act on its behalf and
 1-9     as its duly constituted instrumentality to exercise the powers
1-10     granted in this subsection.  Upon approval by the city, such
1-11     nonprofit corporation is authorized to issue its revenue bonds and
1-12     to loan the proceeds thereof to an entity that has assumed the
1-13     outstanding bond obligations of a nonprofit corporation, such loan
1-14     shall be for the purpose of refunding such outstanding bonds.  The
1-15     bonds to be refunded must have been originally issued as "qualified
1-16     scholarship funding bonds" (within the meaning of that term as
1-17     defined in Section 150(d)(2) of the Internal Revenue Code of 1986,
1-18     as amended) by a nonprofit corporation while acting pursuant to
1-19     Subsection (e) hereof and that subsequently made the election
1-20     permitted under Section 150(d)(3) of the Internal Revenue Code, as
1-21     amended.  Any refunding bonds shall be solely the obligation of
1-22     such nonprofit corporation and shall not be or constitute a debt or
1-23     obligation of the city.  If a nonprofit corporation is created
 2-1     hereunder, the board of directors thereof shall be appointed, and
 2-2     be subject to removal, by the governing body of the city.  In
 2-3     addition to the powers granted under this Subsection (h), the
 2-4     corporation shall have all powers granted under the Texas Nonprofit
 2-5     Corporation Act that are incidental, subordinate, related to or
 2-6     appropriate in carrying out the purposes authorized in this
 2-7     subsection.
 2-8           SECTION 2.  This Act takes effect immediately if it receives
 2-9     a vote of two-thirds of all the members elected to each house, as
2-10     provided by Section 39, Article III, Texas Constitution.  If this
2-11     Act does not receive the vote necessary for immediate effect, this
2-12     Act takes effect September 1, 2001.