By:  Brown of Brazos                                              H.B. No. 2066



A BILL TO BE ENTITLED

AN ACT

amending Section 53.47, Education Code, to permit the creation of 
nonprofit corporations to refund outstanding student loan bonds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 53.47(a)(6), Education Code, is amended 
to read as follows:
		(6)  "Qualified nonprofit corporation" means a 
nonprofit corporation:       
			(A) (i)  that issued bonds on or after January 1, 
1990, and before January 1, 2001, that qualified as qualified 
student loan bonds under Section 144(b), Internal Revenue Code of 
1986, as amended; or (ii) that issues bonds the proceeds of which 
are used to refund bonds issued on or after January 1, 1990 and 
before January 1, 2001 that qualified as qualified student loan 
bonds under Section 144(b), Internal Revenue Code of 1986, as 
amended; or
			(B)  that the office of the governor, in 
consultation with the state student loan guaranty agency or any 
other public or private entity the office of the governor considers 
appropriate, has determined meets a need for student loan financing 
that existing qualified nonprofit corporations cannot meet, which 
determination may include information provided by the nonprofit 
corporation's plan for doing business that should include 
documented limitations in:
				(i)  the geographic coverage of existing 
qualified nonprofit corporations in the nonprofit corporation's 
proposed area of service;
				(ii)  the willingness of existing qualified 
nonprofit corporations to serve the eligible leaders in the 
proposed area of service; and
				(iii)  the ability of existing qualified 
nonprofit corporations to serve the eligible lenders in the 
proposed area of service.
	SECTION 2.  Section 53.47, Education Code, is amended by 
adding a new subsection (h) to read as follows:
	(h)  The governing body of a city by ordinance or resolution 
may authorize the incorporation of a nonprofit corporation under 
this chapter to act on behalf of such city as its duly constituted 
instrumentality for the purpose of exercising the powers set forth 
in this subsection.  Upon approval by the city, such nonprofit 
corporation is authorized to issue its revenue bonds and to loan the 
proceeds thereof to an entity that has assumed the outstanding bond 
obligations of a nonprofit corporation, such loan being for the 
limited purpose of refunding such outstanding bonds.  In issuing 
the bonds, the nonprofit corporation is considered to be acting on 
behalf of the city by which it was created.  The bonds to be refunded 
must have been originally issued as "qualified scholarship funding 
bonds" (within the meaning of that term as defined in section 
150(d)(2) of the Internal Revenue Code of 1986, as amended) by a 
nonprofit corporation while acting pursuant to subsection (f) 
hereof and that subsequently made the election permitted under 
section 150(d)(3) of the Internal Revenue Code, as amended.  Any 
refunding bonds shall be solely the obligation of such nonprofit 
corporation and shall not be or constitute a debt or obligation of 
the city.  The ordinance or resolution of the city authorizing the 
incorporation of the corporation must approve the articles of 
incorporation and any amendments to the articles of incorporation.  
Upon dissolution of the corporation, title to all property owned by 
it shall be vested in and become the property of the city.  A 
corporation may be incorporated under this chapter by filing its 
articles of incorporation with the secretary of state in the manner 
prescribed for the incorporation of nonprofit corporations under 
the Texas Non-Profit Corporations Act (Art. 1396-1.01 et seq, 
Vernon's Texas Civil Statutes).  On filing of the articles of 
incorporation, the secretary of state shall issue a certificate of 
incorporation showing that the corporation is incorporated under 
this chapter.  Except to the extent provided by this section, 
Sections 53.131, 53.14, 53.15, 53.31, 53.32, 53.35(a) and 53.39 
applies to and governs such corporation, its procedures, and bonds.  
In addition to the specific powers granted under this subsection 
(h), the corporation shall have all powers granted under the Texas 
Non-profit Corporation Act that are necessary, incidental, or 
subordinate in carrying out the purposes authorized in this 
subsection.
	SECTION 3.  Subsection (k) of Section 53.47 is hereby 
deleted.               
	SECTION 4.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.