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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 qualified student loan |
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bonds. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 53B.02(2) and (7), Education Code, are |
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amended to 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 to a student, a former |
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student, or any other person [or] for the benefit of the [a] student |
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or former student for the purpose of financing or refinancing all or |
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part of the student's or former student's cost of attendance at an |
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accredited institution. The term includes: |
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(A) indebtedness that meets the definition of a |
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qualified education loan under Section 221(d)(1), Internal Revenue |
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Code of 1986; and |
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(B) indebtedness used to refinance indebtedness |
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that meets the definition of a qualified education loan under |
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Section 221(d)(1), Internal Revenue Code of 1986. |
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(7) "Cost of attendance" means all costs of a student |
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or former student incurred in connection with that student's [a] |
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program of study at an accredited institution, as determined by the |
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institution, including tuition and instructional fees, the cost of |
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room and board, books, computers, and supplies, and other related |
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fees, charges, and expenses. |
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SECTION 2. Sections 53B.47(b), (d), and (h), Education |
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Code, are amended to read as follows: |
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(b) An authority may cause money to be expended to make or |
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purchase for its account guaranteed student loans that are |
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guaranteed by the Texas Guaranteed Student Loan Corporation, other |
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guaranteed student loans, or alternative education loans that are |
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executed by or on behalf of students or former students [who]: |
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(1) who are residents of this state; or |
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(2) who have been admitted to attend or who attended an |
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accredited institution within this state. |
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(d) The authority, as a municipal corporation of the state, |
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is charged with a portion of the responsibility of the state to |
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provide educational opportunities in keeping with all applicable |
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state and federal laws. This [Nothing in this] section may not |
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[shall] be construed as a prohibition against establishing policies |
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to limit the purchase of guaranteed student loans or alternative |
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education loans executed by or on behalf of students or former |
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students who are attending or who attended [attending] school in a |
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certain geographical area or by or on behalf of students or former |
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students who are residents of the area. |
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(h) An alternative education loan may be made under this |
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section only by or on behalf of a qualified alternative education |
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loan lender. An alternative education loan may not be in an amount |
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in excess of the difference between the cost of attendance and the |
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amount of other student-based [student] assistance for which the |
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borrower may be eligible [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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SECTION 3. 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 borrowers if those borrowers are |
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[mortgagors or students] located in all or any part of the |
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jurisdiction of the issuer; or |
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(3) 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 4. Section 1372.033(g), Government Code, is amended |
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to read as follows: |
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(g) A qualified nonprofit corporation that receives a |
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student loan bond allocation may not: |
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(1) transfer the allocation to another entity; or |
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(2) loan to another entity, other than a qualified |
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borrower, [student] proceeds of bonds issued under the allocation. |
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SECTION 5. 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 2019 program |
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year. |
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SECTION 6. This Act takes effect September 1, 2019. |