Bill Text: TX SB653 | 2013-2014 | 83rd Legislature | Introduced

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Bill Title: Relating to the composition and functions of the Texas Guaranteed Student Loan Corporation.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2013-02-25 - Referred to Higher Education [SB653 Detail]

Download: Texas-2013-SB653-Introduced.html

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83R10451 KSD-F
By: Zaffirini S.B. No. 653

A BILL TO BE ENTITLED
AN ACT
relating to the composition and 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 [those] who desire to pursue such [an] education
[and are properly qualified therefor] is important to the welfare
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 [his or her] capabilities and only when
financial barriers to the individual's [his or her] economic,
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 [Texas] students in this state and across the
nation in receiving a postsecondary education in this state or
elsewhere in the nation; [and]
(2) assist institutions of higher education by
providing [provide] necessary and desirable services related to
financial aid and student [the] loan programs; and
(3) engage in:
(A) revenue-generating activities related to
higher education student financial aid and student loan programs to
the extent the activities are not in conflict with the
corporation's primary purposes under Subdivisions (1) and (2),
including providing:
(i) necessary and desirable information,
products, tools, functions, and services related to public and
private student loan and student financial aid programs;
(ii) support services relating to financial
literacy, student loan debt repayment, and student loan default
prevention;
(iii) policy training; and
(iv) the effective and efficient delivery
of higher education student financial aid;
(B) college promotion, outreach, and awareness
efforts described by Section 57.21(a)(1)(A)(iii); and
(C) coordinating, facilitating, promoting, and
providing expertise-based assistance and support designed to
assist students, families, borrowers, and schools in preventing
higher education loan default throughout the life of the loan,
subject to the limitations of Section 57.21 [program, including
cooperative awareness efforts with appropriate educational and
civic associations designed to disseminate postsecondary education
awareness information, including information regarding student
financial aid and the Federal Family Education Loan Program, and
other relevant topics including the prevention of student loan
default].
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 [the Texas Non-Profit Corporation Act
(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)].
(c) [(b)] Except as otherwise provided by law, all expenses
of the corporation shall be paid from revenue [income] of the
corporation.
(d) [(c)] The corporation is subject to Chapters [Chapter]
551 and 552, Government Code.
(e) [(d)] Student loan borrower information collected,
assembled, or maintained by the corporation is confidential and is
not subject to disclosure under Chapter 552, Government Code.
SECTION 2. Section 57.12(a), 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, 2023 [2021].
SECTION 3. Section 57.1311(b), 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. 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. (a) The
board or a board committee may hold an open or closed meeting by
telephone conference call if:
(1) the board or board committee, as applicable,
determines that:
(A) an emergency or public necessity exists; or
(B) it is difficult or impossible to convene a
quorum at one location; and
(2) at least one member of the board or board
committee, as applicable, is physically present at the location of
the meeting.
(b) A telephone conference call meeting is subject to the
notice requirements applicable to other meetings under Chapter 551,
Government Code. The meeting notice must also specify the location
of the meeting where at least one member of the board or board
committee, as applicable, will be physically present.
(c) The meeting location where at least one board or board
committee member 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
that location and be recorded at that location. The recording must
be made available to the public pursuant to a written request under
Chapter 552, Government Code.
(d) The meeting location where at least one board or board
committee member 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 each time the party speaks.
(e) A member of the board or board committee who
participates in a board or board committee meeting, as applicable,
by telephone conference call but is not physically present at the
meeting location where at least one board or board committee member
is physically present is not considered to be absent from the
meeting for any purpose. The vote of a member of the board or board
committee 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, as applicable.
(f) A person who is not a member of the board or board
committee 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.
(g) The authority provided by this section is in addition to
the authority provided by Section 551.125, Government Code.
SECTION 5. Section 57.19(d), Education Code, is amended to
read as follows:
(d) The president or the president's designee shall develop
a [an intra-agency] career ladder program for the corporation. The
program shall require internal corporate [intra-agency] postings
of all nonentry level positions concurrently with any public
posting.
SECTION 6. Section 57.20(a), Education Code, is amended to
read as follows:
(a) The corporation shall appoint an ombudsman [maintain a
system] to promptly and efficiently act on complaints filed with
the corporation. The ombudsman [corporation] shall maintain
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 7. Sections 57.21(a) and (c), 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:
(A) focus on and disseminate [designed to make
available to the residents of this state] information regarding
[concerning] postsecondary education awareness and the
availability of student financial aid, including information
regarding:
(i) financial literacy, student loan debt
repayment considerations, and student loan default prevention;
(ii) the effective and efficient delivery
of higher education financial aid;
(iii) college promotion, outreach, and
awareness efforts with appropriate education and civic
associations that disseminate postsecondary education awareness
information, including information regarding student financial
aid, the Federal Family Education Loan Program established by the
Higher Education Act of 1965 (20 U.S.C. Section 1071 et seq.), and
other student loan programs; and
(iv) other relevant topics; [the Federal
Family Education Loan Program,] and
(B) [to] assist families in obtaining [needed]
postsecondary education financing;
(2) programs designed to assist students, families,
borrowers, and schools in preventing [prevent] student loan default
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 [Each] state agency
that conducts higher education and financial aid outreach
activities shall enter into a memorandum of understanding with the
corporation. The memorandum of understanding may [must] outline
how the corporation and the state agency will coordinate outreach
activities to maximize resources and avoid duplication.
SECTION 8. The heading to Section 57.22, Education Code, is
amended to read as follows:
Sec. 57.22. APPLICATION OF BUSINESS ORGANIZATIONS CODE [THE
TEXAS NON-PROFIT CORPORATION ACT].
SECTION 9. Section 57.22(a), Education Code, is amended to
read as follows:
(a) The corporation is subject to Chapter 22, Business
Organizations Code [the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes)], except that:
(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 [Article 9.01 of that Act].
SECTION 10. 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 engage [participate] in a revenue-generating activity [that is
consistent with the corporation's purposes] if the board determines
that [the revenue from the activity]:
(1) [is sufficient to cover the costs of] the activity
is consistent with the corporation's purposes described by Section
57.01; [and]
(2) revenue from the activity may cover the costs of
the activity; and
(3) revenue from the activity may provide funds to
support activities approved by the board as the corporation's
philanthropic activities or as having strategic or positioning
importance to the corporation [may contribute to a reduction in the
insurance premium paid by students under Section 57.43 of this
code].
(b) If, under Subsection (a) [of this section], the board
authorizes the corporation to provide [perform] additional
services, the corporation may not require postsecondary
educational institutions or students to use those services unless
required by state or federal law.
(c) The corporation's activities under Section 57.01(1) do
not constitute revenue-generating activities for purposes of this
section.
SECTION 11. Section 57.41(a), 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 [loans made to eligible borrowers by eligible
lenders as provided by the federal guaranteed student loan program
under] the Higher Education Act of 1965, 20 U.S.C. Section [Sec.]
1001 et seq., as amended, regulations adopted under that Act, and
other applicable federal law.
SECTION 12. Section 57.461, Education Code, is amended to
read as follows:
Sec. 57.461. [POSTSECONDARY EDUCATIONAL INSTITUTIONS AND
LENDER] ADVISORY COMMITTEES. [(a)] The corporation shall
establish advisory committees as the board considers appropriate [:
[(1) an advisory committee that is composed of 15
members who represent the postsecondary educational institutions
that participate in the corporation's guaranteed student loan
program; and
[(2) an advisory committee that is composed of 12
members including:
[(A) one member who represents the Texas Higher
Education Coordinating Board; and
[(B) 11 members who represent lenders that
participate in the corporation's guaranteed student loan program].
[(b) The board shall appoint advisory committee members on
the recommendation of the president.
[(c) The board may establish other advisory committees as
the board considers necessary.
[(d) The board shall:
[(1) specify each advisory committee's purpose and
duties; and
[(2) require each committee to report to the board in a
manner specified by the board relating to each committee's
activities and work results.]
SECTION 13. Sections 57.47(a), (b), and (d), 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
[or the Texas Higher Education Coordinating Board shall] bring suit
against the defaulting party in accordance with the requirements of
the Higher Education Act of 1965, 20 U.S.C. Section [Sec.] 1001 et
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 [or
the Texas Higher Education Coordinating Board] brings suit against
a defaulting party under this section, the corporation [or the
coordinating board, as appropriate,] shall pay 50 percent of the
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 [or the coordinating board, as appropriate,] shall
pay the remaining 50 percent of the statutory filing fee on the date
of the final disposition of the suit. If the corporation [or
coordinating board] prevails in the suit:
(1) the judgment shall find the defaulting borrower
liable to the corporation [or the coordinating board, as
appropriate,] for the amount of the filing fee; and
(2) the corporation [or coordinating board, as
appropriate,] shall pay the remaining 50 percent of the statutory
filing fee not later than one week after the date on which the
defaulting borrower pays to the corporation [or coordinating board,
as appropriate,] the full amount, including the filing fee, for
which the borrower is liable to the corporation [or coordinating
board].
SECTION 14. Sections 57.481(a), (b), and (c), Education
Code, are amended to read as follows:
(a) [In this section, "loan default rate" means the rate at
which student borrowers default on loans guaranteed by the
corporation as determined by the corporation in compliance with
federal guidelines.
[(b)] The corporation shall take a comprehensive and [an]
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 [in the state] and shall work with the
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 [Central]
Education Agency, [and] state professional and occupational
licensing agencies, and the United States Department of Education.
(b) [(c)] The corporation shall maintain a system of
communication among the appropriate state agencies and entities to
address student [reduce] loan default prevention issues [claims].
SECTION 15. 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, [and] collecting defaulted
loans, and developing information and reports concerning
responsible borrowing.
SECTION 16. Sections 57.50 and 57.71, Education Code, are
amended to read as follows:
Sec. 57.50. NONDISCRIMINATION. The [Neither the]
corporation [nor an eligible lender] may not 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 [RESERVE] AND OPERATING FUNDS. The
corporation shall maintain a federal fund [establish reserve] and
an operating fund [funds] in accordance with Sections [Section]
422, 422A, and 422B of the Higher Education Act of 1965 (20 U.S.C.
Sections [Section] 1072, 1072a, and 1072b), as amended.
SECTION 17. The following provisions of the Education Code
are repealed:
(1) Sections 57.19(g) and (h);
(2) Sections 57.41(c) and (d);
(3) Section 57.42;
(4) Section 57.43;
(5) Section 57.44;
(6) Section 57.45;
(7) Section 57.46;
(8) Sections 57.481(d), (e), (f), (g), and (h); and
(9) Section 57.78.
SECTION 18. This Act takes effect September 1, 2013.