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A BILL TO BE ENTITLED
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AN ACT
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relating to alternative education loans and to the use of higher |
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education private activity bonds by qualified alternative |
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education loan lenders. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 53B.02(2), Education Code, is amended to |
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read as follows: |
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(2) "Alternative education loan" means a loan other |
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than a guaranteed student loan that is made: |
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(A) to a student, a former student, or any other |
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person for the benefit of the student or former student; and |
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(B) [to or for the benefit of a student] for the |
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purpose of financing or refinancing all or part of the student's or |
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former student's cost of attendance at an accredited institution. |
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SECTION 2. Section 53B.12, Education Code, is amended to |
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read as follows: |
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Sec. 53B.12. TERRITORY. (a) The authority comprises only |
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the territory included within the boundaries of the city or cities |
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creating it. |
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(b) Subsection (a) does not restrict the ability of a |
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qualified nonprofit corporation to: |
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(1) make, purchase, or refinance guaranteed student |
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loans or alternative education loans inside and outside the |
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territory described by that subsection, provided that those loans |
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satisfy the requirements of Section 53B.47(b) and other applicable |
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law; or |
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(2) otherwise operate within the corporation's area of |
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service in accordance with this chapter. |
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SECTION 3. Section 53B.47, Education Code, is amended by |
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amending Subsections (a), (b), (c), (f), and (h) and adding |
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Subsection (h-1) to read as follows: |
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(a) An authority may, upon approval of the city or cities |
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which created the same, issue revenue bonds or otherwise borrow |
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money to obtain funds to [purchase or to] make, purchase, or |
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refinance guaranteed student loans or alternative education |
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loans. Revenue bonds issued for such purpose shall be issued in |
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accordance with and with the effect provided in this chapter. Such |
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bonds shall be payable from and secured by a pledge of revenues |
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derived from or by reason of the ownership of guaranteed student |
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loans or alternative education loans and investment income after |
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deduction of such expenses of operating the loan program as may be |
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specified by the bond resolution or trust indenture. |
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(b) An authority may cause money to be expended to make, |
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[or] purchase, or refinance [for its account] guaranteed student |
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loans that are guaranteed by the Texas Guaranteed Student Loan |
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Corporation, other guaranteed student loans, or alternative |
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education loans that are executed by or on behalf of students or |
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former students who: |
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(1) are residents of this state; or |
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(2) have been admitted to attend an accredited |
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institution within this state. |
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(c) The authority shall contract with a nonprofit |
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corporation, organized under the laws of this state, whereby such |
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corporation will provide the reports and other information required |
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for continued participation in a [the federally guaranteed] loan |
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program described by this subchapter [provided by the Higher
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Education Act of 1965, as amended, or in an alternative education
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loan program]. |
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(f) A nonprofit corporation, whether acting at the request |
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of a city or cities under Subsection (e) or acting as a servicer or |
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administrator for another corporation that [purchases or] makes, |
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purchases, or refinances guaranteed student loans or alternative |
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education loans, or that on its own behalf issues securities or |
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otherwise obtains funds to [purchase or] make, purchase, or |
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refinance guaranteed student loans or alternative education loans, |
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may: |
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(1) exercise the powers granted by Chapters 20 and 22, |
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Business Organizations Code, and any provision of Title 1, Business |
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Organizations Code, applicable to a nonprofit corporation; |
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(2) service loans [purchased or] made, purchased, or |
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refinanced from its funds or contract with another person to |
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service the loans; |
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(3) grant a security interest in a trust estate |
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securing its securities; and |
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(4) make investments as authorized by Subsection (e). |
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(h) An alternative education loan may be made, purchased, or |
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refinanced under this section only by or on behalf of a qualified |
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alternative education loan lender. An alternative education loan |
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may not be in an amount that exceeds the amount permitted under |
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Section 144(b)(1)(B), Internal Revenue Code of 1986 [in excess of
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the difference between the cost of attendance and the amount of
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other student assistance to the student, other than loans under
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Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C. Section
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1078-2) (relating to parent loans), for which the student borrower
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may be eligible]. An alternative education loan covered by this |
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subsection is subject to Chapter 342, Finance Code, as applicable, |
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except that: |
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(1) the maximum interest rate on the loan may not |
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exceed the rate permitted under Subchapter A, Chapter 303, Finance |
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Code; and |
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(2) application and origination fees may be agreed to |
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by the parties and assessed at the inception of the loan, provided |
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that if any such fees constitute additional interest under |
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applicable law, the effective rate of interest agreed to over the |
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stated term of the loan may not exceed the rate allowed by |
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Subchapter A, Chapter 303, Finance Code, and accrued unpaid |
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interest may be added to unpaid principal at the beginning of the |
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agreed repayment period at the borrower's option and in accordance |
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with the terms of the agreement for purposes of determining the |
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total principal amount due at the inception of the repayment |
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period. |
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(h-1) A program of general application under this chapter |
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for the making, purchasing, or refinancing of alternative education |
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loans by a qualified alternative education loan lender in |
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accordance with Section 144(b)(1)(B), Internal Revenue Code of |
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1986, is a program approved by the state for purposes of Section |
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144(b)(1)(B). |
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SECTION 4. Section 1372.002(a), Government Code, is amended |
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to read as follows: |
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(a) For purposes of this chapter, a project is: |
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(1) an eligible facility or facilities that are |
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proposed to be financed, in whole or in part, by an issue of |
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qualified residential rental project bonds; |
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(2) in connection with an issue of qualified mortgage |
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bonds [or qualified student loan bonds], the providing of financial |
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assistance to qualified mortgagors [or students] located in all or |
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any part of the jurisdiction of the issuer; [or] |
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(3) in connection with an issue of qualified student |
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loan bonds, the providing of guaranteed student loans or |
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alternative education loans that satisfy the requirements of |
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Section 53B.47(b), Education Code; or |
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(4) an eligible facility or facilities that are |
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proposed to be financed, in whole or in part, by an issue of bonds |
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other than bonds described by Subdivision (1) or (2). |
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SECTION 5. Section 1372.022(a), Government Code, is amended |
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to read as follows: |
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(a) If the state ceiling is computed on the basis of $75 per |
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capita or a greater amount, before August 15 of each year: |
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(1) 28.0 percent of the state ceiling is available |
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exclusively for reservations by issuers of qualified mortgage |
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bonds; |
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(2) 8 percent of the state ceiling is available |
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exclusively for reservations by issuers of state-voted issues; |
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(3) 2.0 percent of the state ceiling is available |
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exclusively for reservations by issuers of qualified small issue |
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bonds and enterprise zone facility bonds; |
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(4) 22.0 percent of the state ceiling is available |
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exclusively for reservations by issuers of qualified residential |
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rental project bonds; |
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(5) 10.5 percent of the state ceiling is available |
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exclusively for reservations by issuers of qualified student loan |
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bonds authorized by Section 53B.47, Education Code[, that are
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nonprofit corporations able to issue a qualified scholarship
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funding bond as defined by Section 150(d)(2), Internal Revenue Code
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(26 U.S.C. Section 150(d)(2))]; and |
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(6) 29.5 percent of the state ceiling is available |
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exclusively for reservations by any other issuer of bonds that |
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require an allocation. |
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SECTION 6. Section 1372.0281, Government Code, is amended |
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by adding Subsection (c) to read as follows: |
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(c) The board shall allow an issuer participating in a |
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student loan program established under Section 53B.47, Education |
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Code, to use pro forma financial statements to satisfy all |
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information requirements of this section that relate to financial |
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matters. |
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SECTION 7. Section 1372.033, Government Code, is amended by |
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adding Subsection (e) to read as follows: |
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(e) A qualified nonprofit corporation that receives a |
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student loan bond allocation may use the allocation to make, |
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purchase, or refinance alternative education loans as defined by |
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Section 53B.02(2), Education Code. |
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SECTION 8. The change in law made by this Act to Chapter |
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1372, Government Code, applies to the allocation of the available |
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state ceiling under that chapter beginning with the 2017 program |
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year. |
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SECTION 9. This Act takes effect September 1, 2017. |