Bill Text: TX SB1474 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to private activity bonds.
Spectrum: Bipartisan Bill
Status: (Passed) 2019-06-14 - Effective on 9/1/19 [SB1474 Detail]
Download: Texas-2019-SB1474-Enrolled.html
S.B. No. 1474 |
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relating to private activity bonds. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Sections 1372.001(1) and (2), Government Code, | ||
are amended to read as follows: | ||
(1) "Additional state ceiling" means authorization | ||
under federal law for the issuance of bonds that are tax-exempt | ||
private activity bonds subject to the limits imposed by Section | ||
146, Internal Revenue Code (26 U.S.C. Section 146), in an amount in | ||
addition to the state ceiling[ |
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(2) "Bonds" means all obligations, including bonds, | ||
certificates, or notes, that are: | ||
(A) authorized to be issued by: | ||
(i) the constitution or a statute of this | ||
state; or | ||
(ii) the charter of a home-rule | ||
municipality; and | ||
(B) either: | ||
(i) subject to the limitations of Section | ||
146, Internal Revenue Code (26 U.S.C. Section 146); or | ||
(ii) with respect to Subchapter D, | ||
otherwise entitled to a federal subsidy only if designated for the | ||
exemption, credit, or other subsidy, or allocated a portion of a | ||
limited amount of obligations for which the exemption, credit, or | ||
other subsidy is authorized, by this state or an applicable | ||
official or by an issuer to which this state or the applicable | ||
official has made an allocation, including exemptions, credits, and | ||
other subsidies authorized by[ |
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authorizing a federal subsidy. | ||
SECTION 2. Sections 1372.002(a) and (c), Government Code, | ||
are amended to read as follows: | ||
(a) For purposes of this chapter, a project is: | ||
(1) an eligible facility or facilities that are | ||
proposed to be financed, in whole or in part, by an issue of | ||
qualified residential rental project bonds; | ||
(2) in connection with an issue of qualified mortgage | ||
bonds [ |
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assistance to qualified mortgagors [ |
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any part of the jurisdiction of the issuer; [ |
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(3) in connection with an issue of qualified student | ||
loan bonds: | ||
(A) if the issuer is the Texas Higher Education | ||
Coordinating Board, the provision of financial assistance to | ||
students; or | ||
(B) if an issuer is authorized by Section 53B.47, | ||
Education Code, the provision of guaranteed student loans or | ||
alternative education loans that satisfy the requirements of | ||
Section 53B.47(b), Education Code; or | ||
(4) an eligible facility or facilities that are | ||
proposed to be financed, in whole or in part, by an issue of bonds | ||
other than bonds described by Subdivision (1), [ |
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(c) For purposes of Subsection (a)(1), an application under | ||
this chapter may include either the rehabilitation or new | ||
construction, or both the rehabilitation and new construction, of | ||
qualified residential rental facilities located at multiple sites | ||
and with respect to which 51 percent or more of the residential | ||
units are located: | ||
(1) in a county with a population of less than 100,000 | ||
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(2) in a county in which the median income is less than | ||
the median income for the state, provided that the units are located | ||
in that portion of the county that is not included in a metropolitan | ||
statistical area containing one or more projects that are proposed | ||
to be financed, in whole or in part, by an issuance of bonds. | ||
SECTION 3. Section 1372.006(a), Government Code, is amended | ||
to read as follows: | ||
(a) An application for a reservation under Subchapter B or a | ||
carryforward designation under Subchapter C must be accompanied by | ||
a nonrefundable fee in the amount of $500, except that: | ||
(1) for projects that include multiple facilities | ||
authorized under Section 1372.002(e), the application must be | ||
accompanied by a nonrefundable fee in an amount of $500 for each | ||
facility included in the application for the project; | ||
(2) for issuers of qualified residential rental | ||
project bonds the application must be accompanied by a | ||
nonrefundable fee of $5,000, of which the board shall retain $1,000 | ||
to offset the costs of the private activity bond allocation program | ||
and the administration of that program and of which the board shall | ||
transfer $4,000 through an interagency agreement to the Texas | ||
Department of Housing and Community Affairs for use in the | ||
affordable housing research and information program as provided by | ||
Section 2306.259; and | ||
(3) for a [ |
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qualified residential rental projects authorized under Section | ||
1372.002(f), the application must be accompanied by a nonrefundable | ||
fee in an amount of $5,000 for each qualified residential rental | ||
project included in the application for the [ |
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with a maximum total fee of $25,000. The [ |
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private activity bond allocation program and the administration of | ||
that program. The [ |
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percent through an interagency agreement to the Texas Department of | ||
Housing and Community Affairs for use in the affordable housing | ||
research and information program as provided by Section 2306.259. | ||
SECTION 4. Section 1372.022(a), Government Code, is amended | ||
to read as follows: | ||
(a) If the state ceiling is computed on the basis of $75 per | ||
capita or a greater amount, before August 15 of each year: | ||
(1) 32.25 [ |
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available exclusively for reservations by issuers of qualified | ||
mortgage bonds; | ||
(2) 10.0 [ |
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exclusively for reservations by issuers of state-voted issues; | ||
(3) 2.0 percent of the state ceiling is available | ||
exclusively for reservations by issuers of qualified small issue | ||
bonds and enterprise zone facility bonds; | ||
(4) 26.25 [ |
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available exclusively for reservations by issuers of qualified | ||
residential rental project bonds; and | ||
(5) [ |
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exclusively for reservations by any other issuer of bonds that | ||
require an allocation. | ||
SECTION 5. Section 1372.0231(b), Government Code, as | ||
amended by Chapters 1329 (S.B. 1664) and 330 (S.B. 264), Acts of the | ||
78th Legislature, Regular Session, 2003, is reenacted and amended | ||
to read as follows: | ||
(b) With respect to the amount of the state ceiling set | ||
aside under Subsection (a)(1), the board shall grant reservations | ||
at the direction of the Texas Department of Housing and Community | ||
Affairs as provided by Section 2306.359 and in a manner that ensures | ||
that[ |
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projects that are located throughout the state[ |
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SECTION 6. Sections 1372.0231(d), (g), and (i), Government | ||
Code, are amended to read as follows: | ||
(d) Except as provided by Subsection (i), before March [ |
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1, the board shall apportion the amount of the state ceiling set | ||
aside under Subsection (a)(2) among the uniform state service | ||
regions according to the percentage of the state's population that | ||
resides in each of those regions. | ||
(g) On or after March [ |
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available reservations to housing finance corporations described | ||
by Subsection (a) based on uniform state service regions or any | ||
segments of those regions. | ||
(i) Before March [ |
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amount of the state ceiling set aside under Subsection (a)(2) only | ||
among uniform state service regions with respect to which an issuer | ||
has submitted an application for a reservation of the state ceiling | ||
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SECTION 7. Sections 1372.024(a) and (b), Government Code, | ||
are amended to read as follows: | ||
(a) If, before January 2, applications received for | ||
reservations for state-voted issues total more than 10 [ |
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percent of the available state ceiling for that program year, the | ||
percentage of state-voted ceiling requested that is more than 10 | ||
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(1) is removed from the state ceiling available to | ||
other issuers on January 2; and | ||
(2) is available for those applications for | ||
reservations for state-voted issues. | ||
(b) The amount removed under Subsection (a) may not exceed | ||
10 [ |
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SECTION 8. Section 1372.026(b), Government Code, is amended | ||
to read as follows: | ||
(b) A housing finance corporation may not receive an | ||
allocation for the issuance of qualified mortgage bonds in an | ||
amount that exceeds the greater of: | ||
(1) $50 [ |
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(2) 1.70 percent of the state ceiling. | ||
SECTION 9. Sections 1372.0261(d) and (g), Government Code, | ||
are amended to read as follows: | ||
(d) A housing finance corporation may not be penalized under | ||
Subsection (c) if: | ||
(1) the corporation fails to use: | ||
(A) bond proceeds recycled from previous | ||
allocations of the state ceiling; or | ||
(B) taxable bond proceeds; [ |
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(2) as the result of an issuance of bonds, the | ||
corporation's utilization percentage is 80 percent or greater; or | ||
(3) the application is received after July 14. | ||
(g) An issuer that has carryforward available from the | ||
additional state ceiling [ |
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project limits for the state ceiling. An issuer who uses the | ||
carryforward to issue qualified mortgage bonds or mortgage credit | ||
certificates is not subject to the utilization percentage | ||
calculation in determining the amount of the issuer's reservation | ||
request. | ||
SECTION 10. Section 1372.0281, Government Code, is amended | ||
to read as follows: | ||
Sec. 1372.0281. INFORMATION REQUIRED OF ISSUERS OF CERTAIN | ||
QUALIFIED STUDENT LOAN BONDS. (a) An issuer of qualified student | ||
loan bonds authorized by Section 53B.47 [ |
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shall provide to the board together with its application for a | ||
reservation information required by board rule. | ||
(b) The board may require an issuer described by Subsection | ||
(a) to provide information with its application, or to supplement | ||
the application with information, that includes: | ||
(1) financial statements; | ||
(2) portfolio amounts; | ||
(3) default rates; | ||
(4) descriptions of how bond proceeds [ |
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are being used or spent; and | ||
(5) other information required by the board [ |
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SECTION 11. Sections 1372.031(a) and (b), Government Code, | ||
are amended to read as follows: | ||
(a) Except as provided by Subsection (b) and subject to | ||
Sections 1372.0321, 1372.0231, and 1372.035(c), if, on or before | ||
October 20, more than one issuer in a category described by Section | ||
1372.022(a)(2), (3), (4), or (5) [ |
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the state ceiling for the next program year, the board shall grant | ||
reservations in that category in the order determined by the board | ||
by lot. | ||
(b) Until August 1 of the program year, within the category | ||
described by Section 1372.022(a)(5) [ |
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shall grant priority to the Texas Economic Development Bank for | ||
projects that the Texas Economic Development and Tourism Office | ||
determines meet the governor's criteria for funding from the Texas | ||
Enterprise Fund. Notwithstanding the priority, the Texas Economic | ||
Development Bank may not receive an amount greater than one-sixth | ||
of the portion of the state ceiling available under Section | ||
1372.022(a)(5) [ |
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SECTION 12. Sections 1372.033(a), (d), and (g), Government | ||
Code, are amended to read as follows: | ||
(a) In this section, "qualified nonprofit corporation"[ |
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meaning assigned by Section 53B.02(11), Education Code. | ||
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(d) Each qualified nonprofit corporation that applies for a | ||
student loan bond allocation in compliance with all applicable | ||
application requirements for a program year is entitled to receive | ||
a student loan bond allocation prioritized in the order that the | ||
application was received by the board for that year. | ||
(g) A qualified nonprofit corporation that receives a | ||
student loan bond allocation may not: | ||
(1) transfer the allocation to another entity; or | ||
(2) loan to another entity, other than a qualified | ||
borrower, [ |
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SECTION 13. Section 1372.037(a), Government Code, is | ||
amended to read as follows: | ||
(a) Before [ |
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August 15 the board may not grant for any single project a | ||
reservation for that year that is greater than: | ||
(1) [ |
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qualified mortgage bonds, other than the Texas Department of | ||
Housing and Community Affairs or the Texas State Affordable Housing | ||
Corporation, the greater of: | ||
(A) $50 million; or | ||
(B) 1.70 percent of the available state ceiling; | ||
(2) [ |
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state-voted issue, other than the Texas Higher Education | ||
Coordinating Board, the greater of: | ||
(A) $100 million; or | ||
(B) 3.40 percent of the available state ceiling; | ||
(3) [ |
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issue is the Texas Higher Education Coordinating Board, the greater | ||
of: | ||
(A) $200 million; or | ||
(B) 6.80 percent of the available state ceiling; | ||
(4) if the issuer is an issuer of qualified small issue | ||
bonds and enterprise zone facility bonds, [ |
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which the Internal Revenue Code limits issuers of [ |
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(5) [ |
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qualified residential rental project [ |
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(A) $50 million; or | ||
(B) 1.70 percent of the available state ceiling; | ||
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(6) [ |
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bonds that require an allocation, the greater of: | ||
(A) $100 million; or | ||
(B) 3.40 percent of the available state ceiling. | ||
SECTION 14. Sections 1372.042(a), (a-1), (b), and (c), | ||
Government Code, are amended to read as follows: | ||
(a) An issuer other than an issuer of qualified residential | ||
rental project bonds, an issuer of state-voted issues, a qualified | ||
nonprofit corporation issuer of qualified student loan bonds, or an | ||
issuer of qualified mortgage bonds shall close on the bonds for | ||
which the reservation was granted not later than the 150th [ |
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day after the reservation date. | ||
(a-1) An issuer of qualified residential rental project | ||
bonds shall close on the bonds for which the reservation was granted | ||
not later than the 180th [ |
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an issuer of qualified residential rental project bonds fails to | ||
close on the bonds for which a reservation was granted, the issuer | ||
shall pay the full closing fee provided by Section 1372.006(b) if | ||
the application is not withdrawn before the 150th [ |
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the reservation date. | ||
(b) An issuer of state-voted issues, a qualified nonprofit | ||
corporation issuer of qualified student loan bonds, or an issuer of | ||
qualified mortgage revenue bonds shall close on the bonds for which | ||
the reservation was granted not later than the 210th [ |
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after the reservation date. | ||
(c) Notwithstanding Subsections (a), (a-1), and (b), if the | ||
150-day [ |
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210-day [ |
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December 24 of the year in which the reservation was granted, the | ||
issuer shall close on the bonds before December 24, except that if | ||
the applicable period expires after December 31 of that year, the | ||
issuer may notify the board in writing before December 24 of the | ||
issuer's election to carry forward the reservation and of the | ||
issuer's expected bond closing date. In compliance with the | ||
requirements of Section 146(f), Internal Revenue Code of 1986, the | ||
board shall file in a timely manner a carryforward election with | ||
respect to any bonds expected to close after December 31 to permit | ||
the bonds to close by the expected date, except that the board may | ||
not file the carryforward election after February 15 of the year | ||
following the year in which the reservation was granted. The grant | ||
of the reservation for the balance of the 150-day [ |
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the 180-day [ |
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applicable, is automatically and immediately reinstated on the | ||
board's filing of a carryforward election with respect to the | ||
reservation. | ||
SECTION 15. Section 1372.043, Government Code, is amended | ||
to read as follows: | ||
Sec. 1372.043. CANCELLATION OF RESERVATION ON ISSUER'S | ||
FAILURE TO TIMELY CLOSE ON BONDS. If an issuer does not close on the | ||
issuer's bonds as required by Section 1372.042: | ||
(1) the reservation for the issue is canceled; and | ||
(2) for the period beginning on the reservation date | ||
and ending on the 150th day, the 180th day, or the 210th day after | ||
the reservation date, as applicable under Section 1372.042, or on | ||
the 210th day after the reservation date if the issuer is an issuer | ||
of qualified mortgage bonds: | ||
(A) no issuer may submit an application for a | ||
reservation for the same project; and | ||
(B) the issuer is eligible for a carryforward | ||
designation for the project only as provided by Subchapter C. | ||
SECTION 16. Section 1372.069, Government Code, is amended | ||
by amending Subsection (c) and adding Subsection (e) to read as | ||
follows: | ||
(c) An issuer may [ |
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designation of an amount that is not more [ |
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of: | ||
(1) $50 million; or | ||
(2) 1.70 percent of the available state ceiling. | ||
(e) A carryforward designation granted under this section | ||
must comply with the Internal Revenue Code of 1986. | ||
SECTION 17. Section 1372.073, Government Code, is amended | ||
to read as follows: | ||
Sec. 1372.073. DESIGNATION BY BOARD OF UNENCUMBERED STATE | ||
CEILING. Notwithstanding any other provision of this chapter, the | ||
board on the last business day of the year may assign as | ||
carryforward to a state agency or to an issuer that was created to | ||
act on behalf of this state [ |
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issuer and in the order received any state ceiling that is not | ||
reserved or designated as carryforward and for which no application | ||
for carryforward is pending. | ||
SECTION 18. Subchapter C, Chapter 1372, Government Code, is | ||
amended by adding Section 1372.074 to read as follows: | ||
Sec. 1372.074. REASSIGNMENT OF CARRYFORWARD DESIGNATION. | ||
(a) After one year from the initial carryforward designation, an | ||
issuer may elect to reassign all or part of the carryforward | ||
designation to a new project if the issuer provides: | ||
(1) the designation on a form described by Section | ||
1372.070; | ||
(2) a written request signed by an authorized | ||
representative of the issuer; | ||
(3) the issuing board resolution authorizing the | ||
carryforward designation reassignment with an original signature | ||
by an officer of the issuer; | ||
(4) applicable fees under Section 1372.006; | ||
(5) an opinion of legal counsel stating that the | ||
carryforward designation reassignment does not conflict with | ||
Section 146, Internal Revenue Code of 1986; and | ||
(6) any other information required by the board. | ||
(b) A new project that is reassigned a carryforward | ||
designation under this section must close within the time period | ||
allowed by the Internal Revenue Code of 1986. | ||
(c) An unutilized carryforward designation available after | ||
a project closes on a carryforward designation under Section | ||
1372.069 may be used by the issuer for other projects subject to | ||
Subsection (b) and Section 1372.061(b). | ||
SECTION 19. Sections 53B.02(2) and (7), Education Code, are | ||
amended to read as follows: | ||
(2) "Alternative education loan" means a loan other | ||
than a guaranteed student loan that is made to a student, a former | ||
student, or any other person [ |
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or former student for the purpose of financing or refinancing all or | ||
part of the student's or former student's cost of attendance at an | ||
accredited institution. The term includes: | ||
(A) indebtedness that meets the definition of a | ||
qualified education loan under Section 221(d)(1), Internal Revenue | ||
Code of 1986; and | ||
(B) indebtedness used to refinance indebtedness | ||
that meets the definition of a qualified education loan under | ||
Section 221(d)(1), Internal Revenue Code of 1986. | ||
(7) "Cost of attendance" means all costs of a student | ||
or former student incurred in connection with that student's or | ||
former student's [ |
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as determined by the institution, including tuition and | ||
instructional fees, the cost of room and board, books, computers, | ||
and supplies, and other related fees, charges, and expenses. | ||
SECTION 20. Sections 53B.47(b), (d), and (h), Education | ||
Code, are amended to read as follows: | ||
(b) An authority may cause money to be expended to make or | ||
purchase for its account guaranteed student loans that are | ||
guaranteed by the Texas Guaranteed Student Loan Corporation, other | ||
guaranteed student loans, or alternative education loans that are | ||
executed by or on behalf of students or former students who: | ||
(1) are residents of this state; or | ||
(2) have been admitted to attend or who attended an | ||
accredited institution within this state. | ||
(d) The authority, as a municipal corporation of the state, | ||
is charged with a portion of the responsibility of the state to | ||
provide educational opportunities in keeping with all applicable | ||
state and federal laws. This [ |
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to limit the purchase of guaranteed student loans or alternative | ||
education loans executed by or on behalf of students or former | ||
students who are attending or who attended [ |
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certain geographical area or by or on behalf of students or former | ||
students who are residents of the area. | ||
(h) An alternative education loan may be made under this | ||
section only by or on behalf of a qualified alternative education | ||
loan lender. An alternative education loan may not be in an amount | ||
that exceeds the amount permitted under Section 144(b)(1)(B), | ||
Internal Revenue Code of 1986 [ |
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alternative education loan covered by this subsection is subject to | ||
Chapter 342, Finance Code, as applicable, except that: | ||
(1) the maximum interest rate on the loan may not | ||
exceed the rate permitted under Subchapter A, Chapter 303, Finance | ||
Code; and | ||
(2) application and origination fees may be agreed to | ||
by the parties and assessed at the inception of the loan, provided | ||
that if any such fees constitute additional interest under | ||
applicable law, the effective rate of interest agreed to over the | ||
stated term of the loan may not exceed the rate allowed by | ||
Subchapter A, Chapter 303, Finance Code, and accrued unpaid | ||
interest may be added to unpaid principal at the beginning of the | ||
agreed repayment period at the borrower's option and in accordance | ||
with the terms of the agreement for purposes of determining the | ||
total principal amount due at the inception of the repayment | ||
period. | ||
SECTION 21. The following provisions of the Government Code | ||
are repealed: | ||
(1) Section 1372.001(18); | ||
(2) Sections 1372.0231(c) and (e); and | ||
(3) Section 1372.037(b). | ||
SECTION 22. The change in law made by this Act to Chapter | ||
1372, Government Code, applies to the allocation of the available | ||
state ceiling under that chapter beginning with the 2020 program | ||
year. | ||
SECTION 23. This Act takes effect September 1, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 1474 passed the Senate on | ||
April 16, 2019, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 1474 passed the House on | ||
May 21, 2019, by the following vote: Yeas 146, Nays 0, | ||
two present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |