HBA-NLM H.J.R. 83 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.J.R. 83
By: Hunter
Financial Institutions
3/28/1999
Introduced



BACKGROUND AND PURPOSE 

The Hinson-Hazelwood College Student Loan program was established in 1965
to provide loans to low and moderate income students.  The purpose of this
resolution is to extend funding for the program for the next six years
through general obligation bonds.   

 H.J.R. 83 proposes to authorize the legislature to provide for the
investment of bond proceeds and to establish and provide for the investment
of an interest and sinking fund to pay the bonds. In addition, it requires
income from the investment to be used for the purposes prescribed by the
legislature. As proposed, H.J.R. 83 requires the submission to the voters
of a constitutional amendment authorizing the legislature by general law to
authorize the Texas Higher Education Coordinating Board or its successor or
successors to issue and sell general obligation bonds of the State of Texas
in an amount not to exceed $400 million to finance educational loans to
students.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article III, Texas Constitution, by adding Section
50b-5, as follows: 

Sec. 50b-5. (a) Authorizes the legislature by general law to authorize the
Texas Higher Education Coordinating Board or its successor or successors
(board) to issue and sell general obligation bonds of the State of Texas in
an amount not to exceed $400 million to finance educational loans to
students.  Provides that these bonds are in addition to those bonds issued
under Sections 50b, 50b-1, 50b-2, 50b-3, and 50b-4 (relating to student
loans and additional student loans) of this article. 

(b) Requires the bonds to be executed in the form, on the terms, and in the
denominations, bear interest, and be issued in installments as prescribed
by the board. 

(c)  Prohibits the maximum net effective interest rate to be borne by bonds
issued under this section from exceeding the maximum provided by law. 

(d)  Authorizes the legislature to provide for the investment of bond
proceeds and to establish and provide for the investment of an interest and
sinking fund to pay the bonds. Requires income from the investment to be
used for the purposes prescribed by the legislature. 

(e)  Provides that, while any of the bonds issued under this section or
interest on the bonds is outstanding and unpaid,  there is appropriated out
of the first money coming into the treasury in each fiscal year, not
otherwise appropriated by this constitution, the amount sufficient to pay
the principal of and interest on the bonds that mature or become due during
the fiscal year, less any amount in an interest and sinking fund
established under this section at the end of the preceding fiscal year that
is pledged to the payment of the bonds or interest. 
 
(f)  Specifies that bonds issued under this section, after approval by the
attorney general, registration by the comptroller of public accounts, and
delivery to the purchasers, are incontestable. 

SECTION 2.  Requires this proposed constitutional amendment to be submitted
to the voters at an election to be held November 2, 1999.  Sets forth the
required language for the ballot.