Bill Text: TX SB40 | 2011-2012 | 82nd Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the composition and functions of the Texas Guaranteed Student Loan Corporation.
Spectrum: Bipartisan Bill
Status: (Vetoed) 2011-06-17 - Vetoed by the Governor [SB40 Detail]
Download: Texas-2011-SB40-Comm_Sub.html
Bill Title: Relating to the composition and functions of the Texas Guaranteed Student Loan Corporation.
Spectrum: Bipartisan Bill
Status: (Vetoed) 2011-06-17 - Vetoed by the Governor [SB40 Detail]
Download: Texas-2011-SB40-Comm_Sub.html
By: Zaffirini | S.B. No. 40 | |
(In the Senate - Filed November 8, 2010; January 31, 2011, | ||
read first time and referred to Committee on Higher Education; | ||
May 3, 2011, reported adversely, with favorable Committee | ||
Substitute by the following vote: Yeas 6, Nays 0; May 3, 2011, sent | ||
to printer.) | ||
COMMITTEE SUBSTITUTE FOR S.B. No. 40 | By: Zaffirini |
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relating to the functions of the Texas Guaranteed Student Loan | ||
Corporation. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 57.01 and 57.11, Education Code, are | ||
amended to read as follows: | ||
Sec. 57.01. DECLARATION OF POLICY. The legislature, giving | ||
due consideration to the historical and continuing interest of the | ||
people of the State of Texas in encouraging deserving and qualified | ||
persons to realize their aspirations for education beyond high | ||
school, finds and declares that postsecondary education for | ||
qualified Texans [ |
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and security of this state and the nation and, consequently, is an | ||
important public purpose. The legislature finds and declares that | ||
the state can achieve its full economic and social potential only if | ||
every individual has the opportunity to contribute to the full | ||
extent of the individual's [ |
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financial barriers to the individual's [ |
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social, and educational goals are removed. It is, therefore, the | ||
purpose of this chapter to establish the Texas Guaranteed Student | ||
Loan Corporation to: | ||
(1) administer a guaranteed student loan program, | ||
student financial aid programs, and other student loan programs to | ||
assist qualified [ |
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nation in receiving a postsecondary education in this state or | ||
elsewhere in the nation; [ |
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(2) assist institutions of higher education by | ||
providing [ |
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financial aid and student [ |
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(3) participate in revenue-generating activities | ||
related to higher education student financial aid and student loan | ||
programs to the extent the activities support the corporation's | ||
primary purposes under Subdivisions (1) and (2) [ |
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Sec. 57.11. TEXAS GUARANTEED STUDENT LOAN CORPORATION. | ||
(a) The Texas Guaranteed Student Loan Corporation is created to | ||
administer the programs authorized by this chapter. | ||
(b) The corporation is a public nonprofit corporation and, | ||
except as otherwise provided in this chapter, has all the powers and | ||
duties incident to a nonprofit corporation under Chapter 22, | ||
Business Organizations Code [ |
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(c) [ |
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of the corporation shall be paid from revenue [ |
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corporation. | ||
(d) [ |
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551 and 552, Government Code. | ||
(e) [ |
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assembled, or maintained by the corporation is confidential and is | ||
not subject to disclosure under Chapter 552, Government Code. | ||
SECTION 2. Subsection (a), Section 57.12, Education Code, | ||
is amended to read as follows: | ||
(a) The Texas Guaranteed Student Loan Corporation is | ||
subject to Chapter 325, Government Code (Texas Sunset Act). Unless | ||
continued in existence as provided by that chapter, the corporation | ||
is abolished and this chapter expires September 1, 2013 [ |
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SECTION 3. Subsection (b), Section 57.1311, Education Code, | ||
is amended to read as follows: | ||
(b) The training program must provide the person with | ||
information regarding: | ||
(1) the provisions of this chapter, including the | ||
policies developed under Section 57.19(i) regarding the separation | ||
of policymaking and management responsibilities, and the | ||
corporation's programs, functions, rules, and budget; | ||
(2) the results of the most recent formal audit of the | ||
corporation; | ||
(3) the requirements of laws relating to open | ||
meetings, public information, and conflicts of interest; and | ||
(4) any applicable ethics policies adopted by the | ||
corporation or the Texas Ethics Commission. | ||
SECTION 4. Section 57.17, Education Code, is amended to | ||
read as follows: | ||
Sec. 57.17. OFFICERS. The governor shall designate the | ||
chairman from among the board's membership. The board shall elect | ||
from among its members a [ |
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officers that the board considers necessary. The chairman and | ||
vice-chairman serve for a term of one year and may be redesignated | ||
or reelected, as applicable. | ||
SECTION 5. Subchapter B, Chapter 57, Education Code, is | ||
amended by adding Section 57.181 to read as follows: | ||
Sec. 57.181. MEETING BY TELEPHONE CONFERENCE CALL; QUORUM | ||
PRESENT AT ONE LOCATION REQUIRED. (a) Notwithstanding Chapter | ||
551, Government Code, the board or a board committee may hold a | ||
meeting by telephone conference call only if a quorum of the board | ||
or board committee, as applicable, is physically present at one | ||
location of the meeting. | ||
(b) A telephone conference call meeting is subject to the | ||
notice requirements applicable to other meetings, except that the | ||
meeting notice must also specify: | ||
(1) the location of the meeting where a quorum of the | ||
board or board committee, as applicable, will be physically | ||
present; and | ||
(2) the intent to have a quorum present at that | ||
location. | ||
(c) The meeting location where a quorum is physically | ||
present must be open to the public during the open portions of a | ||
telephone conference call meeting. The open portions of the | ||
meeting must be audible to the public at the location where the | ||
quorum is present and be tape-recorded at that location. The tape | ||
recording must be made available to the public. | ||
(d) The meeting location where a quorum is physically | ||
present must provide two-way communication during the entire | ||
telephone conference call meeting, and the identification of each | ||
party to the telephone conference call must be clearly stated | ||
before the party speaks. | ||
(e) A member of the board who participates in a board or | ||
board committee meeting by telephone conference call but is not | ||
physically present at the meeting location where a quorum is | ||
physically present is not considered to be absent from the meeting | ||
for any purpose. The vote of a member of the board who participates | ||
in a board or board committee meeting by telephone conference call | ||
is counted for the purpose of determining the number of votes cast | ||
on a motion or other proposition before the board or board | ||
committee. | ||
(f) A member of the board may participate remotely by | ||
telephone conference call instead of by being physically present at | ||
the location of a board meeting for not more than one board meeting | ||
per calendar year. A board member who participates remotely in any | ||
portion of a board meeting by telephone conference call is | ||
considered to have participated in the entire board meeting by | ||
telephone conference call. For purposes of this subsection, remote | ||
participation by telephone conference call in a meeting of a board | ||
committee does not count as remote participation by telephone | ||
conference call in a board meeting regardless of whether: | ||
(1) a quorum of the full board attends the board | ||
committee meeting; or | ||
(2) notice of the board committee meeting is also | ||
posted as notice of a board meeting. | ||
(g) A person who is not a member of the board may not speak | ||
at the board or board committee meeting from a remote location by | ||
telephone conference call, except as provided by Section 551.129, | ||
Government Code. | ||
(h) The authority provided by this section is in addition to | ||
the authority provided by Section 551.125, Government Code. | ||
SECTION 6. Subsection (d), Section 57.19, Education Code, | ||
is amended to read as follows: | ||
(d) The president or the president's designee shall develop | ||
a [ |
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program shall require internal corporate [ |
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of all nonentry level positions concurrently with any public | ||
posting. | ||
SECTION 7. Subsection (a) Section 57.20, Education Code, is | ||
amended to read as follows: | ||
(a) The corporation shall appoint an ombudsman [ |
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the corporation. The ombudsman [ |
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information about parties to the complaint, the subject matter of | ||
the complaint, a summary of the results of the review or | ||
investigation of the complaint, and its disposition. | ||
SECTION 8. Subsections (a) and (c), Section 57.21, | ||
Education Code, are amended to read as follows: | ||
(a) The corporation shall take an active role in | ||
coordinating, facilitating, promoting, and providing assistance | ||
and support to: | ||
(1) programs that focus on and disseminate [ |
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regarding [ |
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availability of student financial aid[ |
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obtaining [ |
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(2) programs designed to assist students, families, | ||
borrowers, and schools in preventing [ |
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throughout the life of the loan, provided that such programs are | ||
required as a part of a guaranty agency's obligation under the | ||
Federal Family Education Loan Program established by the Higher | ||
Education Act of 1965 (20 U.S.C. Section 1071 et seq.), or are | ||
funded by statutory or regulatory mandate, compensation, grant, | ||
contract, award, or other appropriate means; and | ||
(3) programs designed to increase student retention | ||
and graduation rates in postsecondary education. | ||
(c) To the extent practicable, each [ |
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that conducts higher education and financial aid outreach | ||
activities shall enter into a memorandum of understanding with the | ||
corporation. The memorandum of understanding may [ |
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how the corporation and the state agency will coordinate outreach | ||
activities to maximize resources and avoid duplication. | ||
SECTION 9. The heading to Section 57.22, Education Code, is | ||
amended to read as follows: | ||
Sec. 57.22. APPLICATION OF BUSINESS ORGANIZATIONS CODE [ |
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SECTION 10. Subsection (a), Section 57.22, Education Code, | ||
is amended to read as follows: | ||
(a) The corporation is subject to Chapter 22, Business | ||
Organizations Code [ |
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(1) the corporation may not make donations for the | ||
public welfare or for charitable or scientific purposes or in aid of | ||
war activities; | ||
(2) the corporation is not required to file articles | ||
of incorporation; | ||
(3) the corporation is not subject to voluntary or | ||
involuntary dissolution; | ||
(4) the corporation may not be placed in receivership; | ||
and | ||
(5) the corporation is not required to make reports to | ||
the secretary of state under Section 22.357, Business Organizations | ||
Code [ |
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SECTION 11. Section 57.24, Education Code, is amended to | ||
read as follows: | ||
Sec. 57.24. AUTHORITY TO PARTICIPATE IN OTHER | ||
REVENUE-GENERATING ACTIVITIES; LIMITATIONS. (a) The corporation | ||
may participate in a revenue-generating activity by entering into a | ||
contract with the United States Department of Education, with this | ||
state or any agency, instrumentality, or political subdivision of | ||
this state, with any eligible institution as defined by Section 435 | ||
of the Higher Education Act of 1965 (20 U.S.C. Section 1085), as | ||
amended, that is eligible to participate in a program under Title IV | ||
of that Act, with any guaranty agency as defined by Section 435 of | ||
that Act, or with any entity to which the United States Department | ||
of Education has awarded one or more contracts to provide services | ||
under Title IV of that Act [ |
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(1) [ |
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is consistent with the corporation's purposes described by Section | ||
57.01; [ |
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(2) revenue from the activity is sufficient to cover | ||
the costs of the activity, including the opportunity costs of any | ||
invested capital, within a defined period of time determined by the | ||
board for purposes of this section; and | ||
(3) revenue from the activity will enable the | ||
corporation to support educational purposes under Section 57.211 | ||
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(b) The corporation may enter into a contract with the | ||
United States Department of Education under Subsection (a) alone or | ||
in concert with any of the entities with which the corporation may | ||
enter into a contract under that subsection. | ||
(c) If, under Subsection (a) [ |
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authorizes the corporation to perform additional services, the | ||
corporation may not require postsecondary educational institutions | ||
or students to use those services unless required by state or | ||
federal law. | ||
(d) If, under Subsection (a), the board authorizes the | ||
corporation to perform debt collection, default aversion, | ||
financial literacy, exit counseling, or loan servicing, the | ||
corporation may perform those services only in relation to higher | ||
education student loans. | ||
(e) The corporation shall submit a written report to the | ||
legislature and the Legislative Budget Board not later than | ||
December 1 of each even-numbered year regarding the corporation's | ||
participation in revenue-generating activities under this section. | ||
The report must: | ||
(1) include the amounts of revenue from and expenses | ||
associated with the activities; | ||
(2) demonstrate how that revenue is used for the | ||
support of educational purposes under Section 57.211; and | ||
(3) certify: | ||
(A) the reasonable and necessary amount of | ||
operating funds under Section 57.71 required to fulfill the | ||
corporation's responsibilities under Section 57.41(a); and | ||
(B) the amount of excess operating funds under | ||
Section 57.71. | ||
SECTION 12. Subsection (a), Section 57.41, Education Code, | ||
is amended to read as follows: | ||
(a) The corporation shall serve as the designated guarantee | ||
agency under the Federal Family Education Loan Program in | ||
accordance with [ |
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1001 et seq., as amended, regulations adopted under that Act, and | ||
other applicable federal law. | ||
SECTION 13. Section 57.461, Education Code, is amended to | ||
read as follows: | ||
Sec. 57.461. [ |
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establish advisory committees as the board considers appropriate [ |
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SECTION 14. Subsections (a), (b), and (d), Section 57.47, | ||
Education Code, are amended to read as follows: | ||
(a) If a student borrower defaults on a loan and the | ||
corporation is required to honor the guarantee, the corporation may | ||
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against the defaulting party in accordance with the requirements of | ||
the Higher Education Act of 1965, 20 U.S.C. Section [ |
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seq., as amended. | ||
(b) A suit against a defaulting party under this section may | ||
be brought in the county in which the defaulting person resides, in | ||
which the lender is located, or in Travis or Williamson County. | ||
(d) Notwithstanding any other law, if the corporation [ |
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a defaulting party under this section, the corporation [ |
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filing fee or other costs of court taxed and collected in advance | ||
that are in effect on the date on which the suit is filed. If the | ||
defaulting borrower prevails in the suit filed under this section, | ||
the corporation [ |
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pay the remaining 50 percent of the statutory filing fee on the date | ||
of the final disposition of the suit. If the corporation [ |
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(1) the judgment shall find the defaulting borrower | ||
liable to the corporation [ |
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(2) the corporation [ |
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filing fee not later than one week after the date on which the | ||
defaulting borrower pays to the corporation [ |
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which the borrower is liable to the corporation [ |
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SECTION 15. Subsections (a), (b), and (c), Section 57.481, | ||
Education Code, are amended to read as follows: | ||
(a) [ |
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active role in coordinating, facilitating, and providing technical | ||
assistance on guaranteed student loan default prevention and | ||
reduction initiatives and programs that promote responsible | ||
borrowing, financial literacy, debt management, research, and | ||
informed policymaking [ |
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appropriate state agencies and other entities inside and outside | ||
this state, including eligible postsecondary educational | ||
institutions, eligible lenders, servicers, secondary markets, the | ||
Texas Higher Education Coordinating Board, the Texas [ |
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Education Agency, [ |
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licensing agencies, and the United States Department of Education. | ||
(b) [ |
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communication among the appropriate state agencies and entities to | ||
address student [ |
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SECTION 16. Section 57.49, Education Code, is amended to | ||
read as follows: | ||
Sec. 57.49. COOPERATION OF STATE AGENCIES AND SUBDIVISIONS. | ||
Each agency and political subdivision of the state shall cooperate | ||
with the corporation in providing information to the agency's or | ||
political subdivision's clients concerning student financial aid, | ||
including information about delinquency, default prevention, and | ||
life-of-loan issues. Each agency and political subdivision shall | ||
provide information to the corporation on request to assist the | ||
corporation in curing delinquent loans, [ |
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loans, and developing information and reports concerning | ||
responsible borrowing. | ||
SECTION 17. Sections 57.50 and 57.71, Education Code, are | ||
amended to read as follows: | ||
Sec. 57.50. NONDISCRIMINATION. Neither the corporation nor | ||
an eligible lender may discriminate against an eligible student in | ||
making a loan or loan guarantee on the basis of race, age, religion, | ||
or sex or any other basis prohibited by applicable law. | ||
Sec. 57.71. FEDERAL [ |
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corporation shall maintain a federal fund [ |
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operating fund [ |
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422A, and 422B of the Higher Education Act of 1965 (20 U.S.C. | ||
Sections [ |
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SECTION 18. Subchapter D, Chapter 57, Education Code, is | ||
amended by adding Section 57.762 to read as follows: | ||
Sec. 57.762. REVIEW BY STATE AUDITOR. In addition to any | ||
other audit required by law, the state auditor shall periodically | ||
review the corporation's activities in a manner consistent with the | ||
state auditor's audit plan under Chapter 321, Government Code. The | ||
corporation shall reimburse the state auditor for all reasonable | ||
costs incurred by the state auditor in conducting a review under | ||
this section. | ||
SECTION 19. Section 57.78, Education Code, is amended to | ||
read as follows: | ||
Sec. 57.78. INVESTMENTS. The federal fund maintained by | ||
the corporation under Section 57.71 shall [ |
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Higher Education Act of 1965 (20 U.S.C. Section 1072a), as amended. | ||
The operating fund maintained by the corporation under Section | ||
57.71 may be invested only in accordance with Chapter 2256, | ||
Government Code. Authority to invest the operating fund in | ||
accordance with Chapter 2256, Government Code, complies with | ||
Section 422B of the Higher Education Act of 1965 (20 U.S.C. Section | ||
1072b), as amended. | ||
SECTION 20. The following provisions of the Education Code | ||
are repealed: | ||
(1) Subsections (c), (g), and (h), Section 57.19; | ||
(2) Subsections (c) and (d), Section 57.41; | ||
(3) Section 57.42; | ||
(4) Section 57.43; | ||
(5) Section 57.44; | ||
(6) Section 57.45; | ||
(7) Section 57.46; and | ||
(8) Subsections (d), (e), (f), (g), and (h), Section | ||
57.481. | ||
SECTION 21. 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, 2011. | ||
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