86R3476 MM-F
 
  By: Howard H.B. No. 2206
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to alternative education loans and qualified student loan
  bonds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 53B.02(2) and (7), Education Code, are
  amended to read as follows:
               (2)  "Alternative education loan" means a loan other
  than a guaranteed student loan that is made to a student, a former
  student, or any other person [or] for the benefit of the [a] student
  or former student for the purpose of financing or refinancing all or
  part of the student's or former student's cost of attendance at an
  accredited institution.  The term includes:
                     (A)  indebtedness that meets the definition of a
  qualified education loan under Section 221(d)(1), Internal Revenue
  Code of 1986; and
                     (B)  indebtedness used to refinance indebtedness
  that meets the definition of a qualified education loan under
  Section 221(d)(1), Internal Revenue Code of 1986.
               (7)  "Cost of attendance" means all costs of a student
  or former student incurred in connection with that student's [a]
  program of study at an accredited institution, as determined by the
  institution, including tuition and instructional fees, the cost of
  room and board, books, computers, and supplies, and other related
  fees, charges, and expenses.
         SECTION 2.  Sections 53B.47(b), (d), and (h), Education
  Code, are amended to read as follows:
         (b)  An authority may cause money to be expended to make or
  purchase for its account guaranteed student loans that are
  guaranteed by the Texas Guaranteed Student Loan Corporation, other
  guaranteed student loans, or alternative education loans that are
  executed by or on behalf of students or former students [who]:
               (1)  who are residents of this state; or
               (2)  who have been admitted to attend or who attended an
  accredited institution within this state.
         (d)  The authority, as a municipal corporation of the state,
  is charged with a portion of the responsibility of the state to
  provide educational opportunities in keeping with all applicable
  state and federal laws. This [Nothing in this] section may not
  [shall] be construed as a prohibition against establishing policies
  to limit the purchase of guaranteed student loans or alternative
  education loans executed by or on behalf of students or former
  students who are attending or who attended [attending] school in a
  certain geographical area or by or on behalf of students or former
  students who are residents of the area.
         (h)  An alternative education loan may be made under this
  section only by or on behalf of a qualified alternative education
  loan lender. An alternative education loan may not be in an amount
  in excess of the difference between the cost of attendance and the
  amount of other student-based [student] assistance for which the
  borrower may be eligible [to the student], other than loans under
  Section 428B(a)(1), Higher Education Act of 1965 (20 U.S.C. Section
  1078-2) (relating to parent loans)[, for which the student borrower
  may be eligible]. An alternative education loan covered by this
  subsection is subject to Chapter 342, Finance Code, as applicable,
  except that:
               (1)  the maximum interest rate on the loan may not
  exceed the rate permitted under Subchapter A, Chapter 303, Finance
  Code; and
               (2)  application and origination fees may be agreed to
  by the parties and assessed at the inception of the loan, provided
  that if any such fees constitute additional interest under
  applicable law, the effective rate of interest agreed to over the
  stated term of the loan may not exceed the rate allowed by
  Subchapter A, Chapter 303, Finance Code, and accrued unpaid
  interest may be added to unpaid principal at the beginning of the
  agreed repayment period at the borrower's option and in accordance
  with the terms of the agreement for purposes of determining the
  total principal amount due at the inception of the repayment
  period.
         SECTION 3.  Section 1372.002(a), Government Code, is amended
  to read as follows:
         (a)  For purposes of this chapter, a project is:
               (1)  an eligible facility or facilities that are
  proposed to be financed, in whole or in part, by an issue of
  qualified residential rental project bonds;
               (2)  in connection with an issue of qualified mortgage
  bonds or qualified student loan bonds, the providing of financial
  assistance to qualified borrowers if those borrowers are
  [mortgagors or students] located in all or any part of the
  jurisdiction of the issuer; or
               (3)  an eligible facility or facilities that are
  proposed to be financed, in whole or in part, by an issue of bonds
  other than bonds described by Subdivision (1) or (2).
         SECTION 4.  Section 1372.033(g), Government Code, is amended
  to read as follows:
         (g)  A qualified nonprofit corporation that receives a
  student loan bond allocation may not:
               (1)  transfer the allocation to another entity; or
               (2)  loan to another entity, other than a qualified
  borrower, [student] proceeds of bonds issued under the allocation.
         SECTION 5.  The change in law made by this Act to Chapter
  1372, Government Code, applies to the allocation of the available
  state ceiling under that chapter beginning with the 2019 program
  year.
         SECTION 6.  This Act takes effect September 1, 2019.