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By: West, Ogden S.B. No. 1476
(In the Senate - Filed March 13, 2003; March 20, 2003, read
first time and referred to Committee on Education; May 9, 2003,
reported adversely, with favorable Committee Substitute by the
following vote: Yeas 6, Nays 1; May 9, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1476 By: West
A BILL TO BE ENTITLED
AN ACT
relating to the nonprofit corporations eligible to issue bonds to
finance or purchase guaranteed student loans and authorizing
certain nonprofit corporations to refund outstanding student loan
bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. If this Act takes effect before September 1,
2003, Subdivision (6), Subsection (a), Section 53.47, Education
Code, is amended to read as follows:
(6) "Qualified nonprofit corporation" means a
nonprofit corporation:
(A) that:
(i) 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) 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 lenders 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. If this Act takes effect on September 1, 2003,
Subsection (a), Section 53.47, Education Code, is amended by adding
Subdivision (6) to read as follows:
(6) "Qualified nonprofit corporation" means a
nonprofit corporation:
(A) that:
(i) 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) 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 lenders 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 3. Subsection (k), Section 53.47, Education Code,
is amended to read as follows:
(k) 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 the city as its duly constituted
instrumentality to exercise the powers provided by this subsection.
On approval by the governing body of the city, the nonprofit
corporation may issue revenue bonds and loan the proceeds of the
bonds to an entity that has assumed the outstanding bond
obligations of a nonprofit corporation if the loan is for the
limited purpose of refunding those outstanding bonds. In issuing
the bonds, the nonprofit corporation is considered to be acting on
behalf of the city that created the corporation. The bonds to be
refunded must have been originally issued as qualified scholarship
funding bonds as that term is defined by Section 150(d)(2),
Internal Revenue Code of 1986, as amended, by a nonprofit
corporation while acting pursuant to Subsection (f) and that
subsequently made the election permitted under Section 150(d)(3),
Internal Revenue Code of 1986, as amended; provided, however, that
any entity whose bonds are refunded under this subsection that
proposes to issue stock or other evidence of ownership with respect
to such entity shall provide prior notice of such proposed action to
the attorney general in sufficient time to permit a full review of
such proposed issuance and the terms of the issuance. Any refunding
bonds shall be solely the obligation of the nonprofit corporation
and do not 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. On dissolution of
the corporation, all property owned by the corporation becomes the
property of the city. A corporation may be incorporated under this
subsection by filing the articles of incorporation with the
secretary of state in the manner prescribed for the incorporation
of nonprofit corporations under the Texas Non-Profit Corporation
Act (Article 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 apply to and govern the
corporation, its procedures, and its bonds. In addition to the
specific powers granted under this subsection, the corporation has
all powers granted under the Texas Non-Profit Corporation Act that
are necessary, incidental, or subordinate to enable the corporation
to carry out the purposes of this subsection [Subsection (a)(6)
expires September 1, 2003. On or after September 1, 2003, in this
section, the term "qualified nonprofit corporation" means any
nonprofit corporation authorized by a city to exercise the powers
of an authority under this section].
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.
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