Bill Text: TX SB37 | 2019-2020 | 86th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to a prohibition on the use of student loan default or breach of a student loan repayment or scholarship contract as a ground for refusal to grant or renew an occupational license or other disciplinary action in relation to an occupational license.

Spectrum: Bipartisan Bill

Status: (Passed) 2019-06-07 - Effective immediately [SB37 Detail]

Download: Texas-2019-SB37-Engrossed.html

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By: Zaffirini, et al. S.B. No. 37

A BILL TO BE ENTITLED
AN ACT
relating to a prohibition on the use of student loan default or
breach of a student loan repayment or scholarship contract as a
ground for refusal to grant or renew an occupational license or
other disciplinary action in relation to an occupational license.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Chapter 56, Occupations Code, is
amended to read as follows:
CHAPTER 56. DISCIPLINARY ACTION AGAINST RECIPIENTS OF STUDENT
FINANCIAL ASSISTANCE PROHIBITED
SECTION 2. Sections 56.001(3), (4), (5), and (6),
Occupations Code, are amended to read as follows:
(3) "Licensing authority" means a department,
commission, board, office, or other agency of the state or of a
political subdivision of the state that issues a license.
(4) "Scholarship contract" means an agreement by this
state, an agency of this state, a political subdivision of this
state, or the United States to make a grant to a person to support
the person while attending a public or private institution of
higher education or other postsecondary educational establishment
in exchange for the person's agreement to perform a service
obligation.
(5) "Student loan" means a loan made to a person by a
public or private entity to support the person while attending a
public or private institution of higher education or other
postsecondary educational establishment [that is:
[(A) owed to this state, an agency of this state,
or the United States; or
[(B) guaranteed by this state, an agency of this
state, or the United States].
(6) "Student loan repayment contract" means an
agreement by this state, an agency of this state, a political
subdivision of this state, or the United States to repay all or part
of a person's student loan in exchange for the person's agreement to
perform a service obligation.
SECTION 3. Section 56.003, Occupations Code, is amended to
read as follows:
Sec. 56.003. DISCIPLINARY [AUTHORITY TO TAKE] ACTION IN
EVENT OF DEFAULT OR BREACH PROHIBITED. A [On receipt of information
from an administering entity that a person has defaulted on a
student loan or has breached a student loan repayment contract or
scholarship contract by failing to perform the person's service
obligation under the contract, a] licensing authority may not take
disciplinary action against a person based on the person's default
on a student loan or breach of a student loan repayment contract or
scholarship contract, including by:
(1) denying [deny] the person's application for a
license or license renewal;
(2) suspending [suspend] the person's license; or
(3) taking [take] other disciplinary action against
the person.
SECTION 4. Sections 157.015(f) and (g), Finance Code, are
amended to read as follows:
(f) The commissioner may deny the renewal application for a
residential mortgage loan originator license for the same reasons
and grounds on which the commissioner could have denied an original
application for a license, other than on the basis of the person's
default on a student loan.
(g) The commissioner may deny the renewal application for a
residential mortgage loan originator license if:
(1) the person seeking the renewal of the residential
mortgage loan originator license is in violation of this chapter,
Chapter 156, or Chapter 180, an applicable rule adopted under this
chapter, Chapter 156, or Chapter 180, or any order previously
issued to the person by the commissioner;
(2) the person seeking renewal of the residential
mortgage loan originator license is in default in the payment of any
administrative penalty, fee, charge, or other indebtedness owed
under this title; or
(3) [the person seeking the renewal of the residential
mortgage loan originator license is in default on a student loan
administered by the Texas Guaranteed Student Loan Corporation,
under Section 57.491, Education Code; or
[(4)] during the current term of the license, the
commissioner becomes aware of any fact that would have been grounds
for denial of an original license if the fact had been known by the
commissioner on the date the license was granted.
SECTION 5. Section 180.055(d), Finance Code, is amended to
read as follows:
(d) For purposes of Subsection (a)(3), an individual is
considered not to be financially responsible if the individual has
shown a lack of regard in managing the individual's own financial
affairs or condition. A determination that an individual has not
shown financial responsibility may not be based on the individual's
default on a student loan but may include:
(1) an outstanding judgment against the individual,
other than a judgment imposed solely as a result of medical
expenses;
(2) an outstanding tax lien or other governmental
liens and filings;
(3) a foreclosure during the three-year period
preceding the date of the license application; and
(4) a pattern of seriously delinquent accounts, other
than student loan accounts, during the three-year period preceding
the date of the application.
SECTION 6. Sections 466.155(a) and (g), Government Code,
are amended to read as follows:
(a) After a hearing, the director shall deny an application
for a license or the commission shall suspend or revoke a license if
the director or commission, as applicable, finds that the applicant
or sales agent:
(1) is an individual who:
(A) has been convicted of a felony, criminal
fraud, gambling or a gambling-related offense, or a misdemeanor
involving moral turpitude, if less than 10 years has elapsed since
the termination of the sentence, parole, mandatory supervision, or
probation served for the offense;
(B) is or has been a professional gambler;
(C) is married to an individual:
(i) described in Paragraph (A) or (B); or
(ii) who is currently delinquent in the
payment of any state tax;
(D) is an officer or employee of the commission
or a lottery operator; or
(E) is a spouse, child, brother, sister, or
parent residing as a member of the same household in the principal
place of residence of a person described by Paragraph (D);
(2) is not an individual, and an individual described
in Subdivision (1):
(A) is an officer or director of the applicant or
sales agent;
(B) holds more than 10 percent of the stock in the
applicant or sales agent;
(C) holds an equitable interest greater than 10
percent in the applicant or sales agent;
(D) is a creditor of the applicant or sales agent
who holds more than 10 percent of the applicant's or sales agent's
outstanding debt;
(E) is the owner or lessee of a business that the
applicant or sales agent conducts or through which the applicant
will conduct a ticket sales agency;
(F) shares or will share in the profits, other
than stock dividends, of the applicant or sales agent; or
(G) participates in managing the affairs of the
applicant or sales agent;
(3) has been finally determined to be[:
[(A)] delinquent in the payment of a tax or other
money collected by the comptroller, the Texas Workforce Commission,
or the Texas Alcoholic Beverage Commission;
[(B) in default on a loan made under Chapter 52,
Education Code; or
[(C) in default on a loan guaranteed under
Chapter 57, Education Code;]
(4) is a person whose location for the sales agency is:
(A) a location licensed for games of bingo under
Chapter 2001, Occupations Code;
(B) on land that is owned by:
(i) this state; or
(ii) a political subdivision of this state
and on which is located a public primary or secondary school, an
institution of higher education, or an agency of the state; or
(C) a location for which a person holds a wine and
beer retailer's permit, mixed beverage permit, mixed beverage late
hours permit, private club registration permit, or private club
late hours permit issued under Chapter 25, 28, 29, 32, or 33,
Alcoholic Beverage Code, other than a location for which a person
holds a wine and beer retailer's permit issued under Chapter 25,
Alcoholic Beverage Code, that derives less than 30 percent of the
location's gross receipts from the sale or service of alcoholic
beverages; or
(5) has violated this chapter or a rule adopted under
this chapter.
(g) For purposes of Subsection (a)(3), the comptroller,
Texas Workforce Commission, and Texas Alcoholic Beverage
Commission[, Texas Higher Education Coordinating Board, and Texas
Guaranteed Student Loan Corporation] shall each provide the
executive director with a report of persons who have been finally
determined to be delinquent in the payment of any money owed to or
collected by that agency. The commission shall adopt rules
regarding the form and frequency of reports under this subsection.
SECTION 7. The following laws are repealed:
(1) Section 57.491, Education Code;
(2) Section 82.022(c), Government Code;
(3) Section 154.110(e), Government Code; and
(4) Sections 56.001(1), 56.002, 56.004, 56.005, and
56.006, Occupations Code.
SECTION 8. A disciplinary action proceeding under Chapter
56, Occupations Code, that was initiated before the effective date
of this Act and that is pending on the effective date of this Act is
terminated on that date.
SECTION 9. 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, 2019.