By: Brown of Brazos H.B. No. 2752
Substitute the following for H.B. No. 2752:
By: Giddings C.S.H.B. No. 2752
A BILL TO BE ENTITLED
AN ACT
relating to 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 (l) to read as follows:
(l) 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
(l), 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
repealed.
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.