By: Zaffirini S.B. No. 4
(In the Senate - Filed March 14, 2003; March 20, 2003, read
first time and referred to Committee on Education; May 2, 2003,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 9, Nays 0; May 2, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 4 By: Zaffirini
A BILL TO BE ENTITLED
AN ACT
relating to the establishment and operation of the Texas B-On-time
student loan program; authorizing the issuance of bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 56, Education Code, is amended by adding
Subchapter Q to read as follows:
SUBCHAPTER Q. TEXAS B-ON-TIME LOAN PROGRAM
Sec. 56.451. DEFINITIONS. In this subchapter:
(1) "Coordinating board" means the Texas Higher
Education Coordinating Board.
(2) "Eligible institution" means:
(A) an institution of higher education; or
(B) a private or independent institution of
higher education.
(3) "General academic teaching institution," "private
or independent institution of higher education," "public junior
college," and "public technical institute" have the meanings
assigned by Section 61.003.
Sec. 56.452. PROGRAM NAME; PURPOSE. (a) The student loan
program authorized by this subchapter is known as the Texas
B-On-time loan program, and an individual loan awarded under this
subchapter is known as a Texas B-On-time loan.
(b) The purpose of this subchapter is to provide no-interest
loans to eligible students to enable those students to attend all
public and private or independent institutions of higher education
in this state.
Sec. 56.453. ADMINISTRATION OF PROGRAM; RULES. (a) The
coordinating board shall:
(1) administer the Texas B-On-time loan program;
(2) determine the repayment and other terms of a Texas
B-On-time loan; and
(3) in consultation with the student financial aid
officers of eligible institutions, adopt any rules necessary to
implement the program or this subchapter.
(b) The coordinating board may charge and collect a loan
origination fee from a person who receives a Texas B-On-time loan to
be used by the board to pay for the operating expenses for making
loans under this subchapter.
(c) The total amount of Texas B-On-time loans awarded may
not exceed the amount available in the Texas B-On-time student loan
account under Section 56.463.
Sec. 56.454. PERSONS NOT ELIGIBLE. (a) A person is not
eligible to receive a Texas B-On-time loan if the person has been
granted a baccalaureate degree.
(b) A person may not receive a Texas B-On-time loan for more
than 150 semester credit hours or the equivalent.
Sec. 56.455. INITIAL ELIGIBILITY FOR LOAN. To be eligible
initially for a Texas B-On-time loan, a person must:
(1) be a resident of this state for purposes of
Subchapter B, Chapter 54;
(2) meet one of the following academic requirements:
(A) be a graduate of a public or accredited
private high school in this state who graduated not earlier than the
2002-2003 school year under the recommended or advanced high school
program established under Section 28.025(a); or
(B) have received an associate degree from an
eligible institution not earlier than May 1, 2005;
(3) be enrolled for a full course load for an
undergraduate student, as determined by the coordinating board, in
an undergraduate degree or certificate program at an eligible
institution;
(4) be eligible for federal financial aid, except that
a person is not required to meet any financial need requirement
applicable to a particular federal financial aid program; and
(5) comply with any additional nonacademic
requirement adopted by the coordinating board under this
subchapter.
Sec. 56.456. CONTINUING ELIGIBILITY AND ACADEMIC
PERFORMANCE REQUIREMENTS. (a) After initially qualifying for a
Texas B-On-time loan, a person may continue to receive a Texas
B-On-time loan for each semester or term in which the person is
enrolled at an eligible institution only if the person:
(1) is enrolled for a full course load for an
undergraduate student, as determined by the coordinating board, in
an undergraduate degree or certificate program at an eligible
institution;
(2) is eligible for federal financial aid, except that
a person is not required to meet any financial need requirement
applicable to a particular federal financial aid program;
(3) makes satisfactory academic progress toward a
degree or certificate as determined by the institution at which the
person is enrolled, if the person is enrolled in the person's first
academic year at the institution;
(4) completed at least 75 percent of the semester
credit hours attempted by the person in the most recent academic
year and has a cumulative grade point average of at least 2.5 on a
four-point scale or the equivalent on all coursework previously
attempted at institutions of higher education, if the person is
enrolled in any academic year after the person's first academic
year; and
(5) complies with any additional nonacademic
requirement adopted by the coordinating board.
(b) If a person fails to meet any of the requirements of
Subsection (a) after the completion of any semester or term, the
person may not receive a Texas B-On-time loan for the next semester
or term in which the person enrolls. A person may become eligible
to receive a Texas B-On-time loan in a subsequent semester or term
if the person:
(1) completes a semester or term during which the
person is not eligible for a Texas B-On-time loan; and
(2) meets all of the requirements of Subsection (a).
(c) A person who is eligible to receive a Texas B-On-time
loan continues to remain eligible to receive the Texas B-On-time
loan if the person enrolls in or transfers to another eligible
institution.
(d) A person who qualifies for and subsequently receives a
Texas B-On-time loan, who receives an undergraduate certificate or
associate degree, and who, not later than the 12th month after the
month the person receives the certificate or degree, enrolls in a
program leading to a higher-level undergraduate degree continues to
be eligible for a Texas B-On-time loan to the extent other
eligibility requirements are met.
Sec. 56.457. WAIVER OF COURSE LOAD REQUIREMENT. (a) The
coordinating board shall adopt rules to allow a person who is
otherwise eligible to receive a Texas B-On-time loan, in the event
of a hardship or other good cause, to receive a Texas B-On-time loan
while enrolled in a number of semester credit hours that is less
than the number of semester credit hours required under Section
56.455 or 56.456, as applicable.
(b) The coordinating board may not allow a person to receive
a Texas B-On-time loan while enrolled in fewer than six semester
credit hours.
Sec. 56.458. LOAN USE. A person receiving a Texas B-On-time
loan may use the money to pay for any usual and customary costs of
attendance at an eligible institution incurred by the student,
including tuition, fees, books, and room and board.
Sec. 56.459. LOAN AMOUNT. (a) The amount of a Texas
B-On-time loan for a semester or term for a student enrolled
full-time at an eligible institution other than an institution
covered by Subsection (b), (c), or (d) is an amount determined by
the coordinating board as the average statewide amount of tuition
and required fees that a resident student enrolled full-time in an
undergraduate degree program would be charged for that semester or
term at general academic teaching institutions.
(b) The amount of a Texas B-On-time loan for a student
enrolled full-time at a private or independent institution of
higher education is an amount determined by the coordinating board
as the average statewide amount of tuition and required fees that a
resident student enrolled full-time in an undergraduate degree
program would be charged for that semester or term at general
academic teaching institutions.
(c) The amount of a Texas B-On-time loan for a student
enrolled full-time at a public technical institute is the amount
determined by the coordinating board as the average statewide
amount of tuition and required fees that a resident student
enrolled full-time in an associate degree or certificate program
would be charged for that semester or term at public technical
institutes.
(d) The amount of a Texas B-On-time loan for a student
enrolled full-time at a public junior college is the amount
determined by the coordinating board as the average statewide
amount of tuition and required fees that a student who is a resident
of the junior college district and is enrolled full-time in an
associate degree or certificate program would be charged for that
semester or term at public junior colleges.
(e) Not later than January 31 of each year, the coordinating
board shall publish the amounts of each loan established by the
board for each type of institution for the academic year beginning
the next fall semester.
(f) If in any academic year the amount of money in the Texas
B-On-time student loan account is insufficient to provide the loans
to all eligible persons in amounts specified by this section, the
coordinating board shall determine the amount of available money
and shall allocate that amount to eligible institutions in
proportion to the number of full-time equivalent undergraduate
students enrolled at each institution. Each institution shall use
the money allocated to award Texas B-On-time loans to eligible
students enrolled at the institution selected according to
financial need.
Sec. 56.460. NOTIFICATION OF PROGRAM; RESPONSIBILITIES OF
SCHOOL DISTRICTS. (a) The coordinating board shall distribute to
each eligible institution and to each school district a copy of the
rules adopted under this subchapter.
(b) Each school district shall notify its middle school
students, junior high school students, and high school students,
those students' teachers and counselors, and those students'
parents or guardians of the Texas B-On-time loan program and the
eligibility requirements of the program.
Sec. 56.461. LOAN PAYMENT DEFERRED. The repayment of a
Texas B-On-time loan received by a student under this subchapter is
deferred as long as the student remains continuously enrolled in an
undergraduate degree or certificate program at an eligible
institution.
Sec. 56.462. LOAN FORGIVENESS. A student who receives a
Texas B-On-time loan shall be forgiven the amount of the student's
loan if the student is awarded an undergraduate certificate or
degree at an eligible institution with a cumulative grade point
average of at least 3.0 on a four-point scale or the equivalent:
(1) within:
(A) four calendar years after the date the
student initially enrolled in the institution or another eligible
institution if:
(i) the institution is a four-year
institution; and
(ii) the student is awarded a degree other
than a degree in engineering, architecture, or any other program
determined by the coordinating board to require more than four
years to complete;
(B) five calendar years after the date the
student initially enrolled in the institution or another eligible
institution if:
(i) the institution is a four-year
institution; and
(ii) the student is awarded a degree in
engineering, architecture, or any other program determined by the
coordinating board to require more than four years to complete; or
(C) two years after the date the student
initially enrolled in the institution or another eligible
institution if the institution is a public junior college or public
technical institute; or
(2) with a total number of semester credit hours,
including transfer credit hours and hours earned exclusively by
examination, that is not more than six hours more than the minimum
number of semester credit hours required to complete the
certificate or degree.
Sec. 56.463. TEXAS B-ON-TIME STUDENT LOAN ACCOUNT.
(a) The Texas B-On-time student loan account is an account in the
general revenue fund. The account consists of gifts and grants and
legislative appropriations received under Section 56.464, and
other money required by law to be deposited in the account.
(b) Money in the Texas B-On-time student loan account may be
used only as provided by this subchapter.
Sec. 56.464. FUNDING. (a) The coordinating board may
solicit and accept gifts and grants from any public or private
source for the purposes of this subchapter.
(b) The coordinating board may issue and sell general
obligation bonds under Subchapter F, Chapter 52, for the purposes
of this subchapter.
(c) The legislature may appropriate money for the purposes
of this subchapter.
SECTION 2. Subsection (d), Section 52.82, Education Code,
is amended to read as follows:
(d) The total amount of bonds issued by the board in a state
fiscal year may not exceed $125 [$100] million.
SECTION 3. Section 52.89, Education Code, is amended by
amending Subsection (c) and adding Subsection (c-1) to read as
follows:
(c) The board shall deposit to the credit of the fund any
[the] proceeds from the sale of bonds [in the fund], excluding:
(1) any accrued interest on the bonds which shall be
deposited in the board interest and sinking fund relating to the
bonds; and
(2) proceeds from the sale of bonds issued by the board
under Section 56.464(b) to provide Texas B-On-time student loans.
(c-1) Notwithstanding Subsection (c), proceeds from the
sale of bonds issued by the board under Section 56.464(b) to provide
Texas B-On-time student loans may be deposited to the credit of the
fund by resolution of the board.
SECTION 4. Subchapter F, Chapter 52, Education Code, is
amended by amending Section 52.90 and adding Section 52.91 to read
as follows:
Sec. 52.90. LOANS FROM FUND. (a) The board:
(1) shall make a loan from the fund to a student who
qualifies for a loan under Subchapter C; and
(2) may make a loan from the fund to a student who
qualifies for a Texas B-On-time student loan under Subchapter Q,
Chapter 56 [of this chapter].
(b) Loans from the fund are governed by Subchapter C of this
chapter or Subchapter Q, Chapter 56, as appropriate, as if made
under that subchapter, except to the extent of conflict with this
subchapter.
(c) The board may charge and collect a loan origination fee
from a person [student] who receives a loan from the fund. The
board may use the fee to pay operating expenses for making loans
under this section.
Sec. 52.91. BONDS FOR TEXAS B-ON-TIME STUDENT LOAN PROGRAM.
(a) The board shall deposit to the credit of the Texas B-On-time
student loan account established under Section 56.463 any proceeds
from the sale of bonds issued by the board to fund Texas B-On-time
student loans under Section 56.464(b), other than:
(1) accrued interest on the bonds, which shall be
deposited to the credit of the interest and sinking fund related to
the bonds; and
(2) any proceeds from the sale of the bonds that the
board by resolution deposits to the student loan auxiliary fund
under Section 52.89(c-1).
(b) The board by rule may establish as provided by Section
52.03 one or more interest and sinking funds to be used for any
purpose relating to the Texas B-On-time student loan program
established under Subchapter Q, Chapter 56.
(c) The board shall repay bonds issued by the board to fund
the Texas B-On-time student loan program using legislative
appropriations and money collected by the board as repayment for
Texas B-On-time student loans awarded by the board. The board may
not use money collected by the board as repayment for student loans
awarded by the board under Subchapter C to repay bonds issued by the
board for the Texas B-On-time student loan program under Section
56.464(b).
SECTION 5. (a) The Texas Higher Education Coordinating
Board and the eligible institutions shall award loans under the
Texas B-On-time student loan program established under Subchapter
Q, Chapter 56, Education Code, as added by this Act, beginning with
the 2003 fall semester.
(b) The Texas Higher Education Coordinating Board shall
adopt the initial rules for awarding loans under the Texas
B-On-time student loan program established under Subchapter Q,
Chapter 56, Education Code, as added by this Act, as soon as
practicable after the effective date of this Act. The coordinating
board may adopt those initial rules in the manner provided by law
for emergency rules.
SECTION 6. 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.
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