CHAPTER 1233. COLLEGE OPPORTUNITY ACT

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GOVERNMENT CODE

TITLE 9. PUBLIC SECURITIES

SUBTITLE B. PROVISIONS APPLICABLE TO SECURITIES ISSUED BY STATE

GOVERNMENT

CHAPTER 1233. COLLEGE OPPORTUNITY ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1233.001. SHORT TITLE. This chapter may be cited as the

College Opportunity Act.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.002. DEFINITIONS. In this chapter:

(1) "Board" means the Bond Review Board.

(2) "Committee" means the College Opportunity Act committee.

(3) "College savings bond" means a general obligation bond or

another instrument authorized to be designated as a college

savings bond under this chapter.

(4) "Issuer" means:

(A) the Veterans' Land Board;

(B) the Texas Water Development Board;

(D) another state agency authorized under this chapter to

designate part or all of its general obligation bonds as college

savings bonds.

(5) "Postsecondary educational institution" includes an

institution of higher education, as that term is defined by

Section 61.003, Education Code, and a private, nonprofit

institution of higher education that is accredited by a

recognized accrediting agency, as that term is defined by Section

61.003, Education Code, and that is located and authorized to

operate in this state. The term does not include a private

institution of higher education operated exclusively for

sectarian purposes, religious teaching or worship, or the

training of professionals in the field of religion.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.003. EFFECT ON OTHER LAW. To the extent of any

conflict between this chapter and other law in regard to college

savings bonds, this chapter controls.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. ADMINISTRATIVE PROVISIONS

Sec. 1233.051. COLLEGE OPPORTUNITY ACT COMMITTEE. (a) The

College Opportunity Act committee consists of:

(1) the following ex officio members:

(A) the commissioner of the General Land Office;

(B) the commissioner of higher education;

Board;

(D) the comptroller;

(E) the executive director of the board; and

(F) the chief executive officer of a state agency authorized by

the board under Section 1233.155 to designate any part of its

general obligation bonds as college savings bonds; and

(2) three public members appointed by the governor with the

advice and consent of the senate.

(b) A public member must have knowledge, skill, and experience

in an academic, business, or financial field.

term of one member expiring February 1 of each odd-numbered year.

(d) A vacancy in the office of a public member shall be filled

by appointment for the unexpired term.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.052. PRESIDING OFFICER; PROCEDURES. (a) The

committee shall designate a member of the committee to serve as

presiding officer.

(b) The committee shall establish procedures for the conduct of

its business.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.053. DEPUTIES. An ex officio member of the committee

may appoint a deputy to serve as a voting member of the committee

in the member's absence.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. BENEFITS OF COLLEGE OPPORTUNITY BONDS

Sec. 1233.101. FINANCIAL INCENTIVES AND BONUSES. (a) The

committee may authorize financial incentives for a holder of a

college savings bond to encourage the enrollment of students at

postsecondary educational institutions. The committee shall

establish procedures necessary to implement this section.

(b) A bonus payment may be paid under this subsection to the

holder of a college savings bond at maturity only if the holder

owned the college savings bond for the five years preceding the

bond's maturity date.

savings bond at maturity in a form that may be applied only to

tuition costs at a postsecondary educational institution.

(d) The amount of the bonus payment for each year must be at

least equal to four-tenths of one percent of the college savings

bond's face amount, applied to each full year from the date of

purchase to the earlier of the date of redemption or the date of

maturity. Subject to Subsection (e), the committee may increase

the amount of the payment at the time the committee authorizes

the college savings bond.

(e) The amount of financial incentives provided under this

section during a state fiscal biennium may not exceed an amount

equal to one-half of one percent of the total amount of college

savings bonds maturing during that biennium.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.102. EFFECT ON OTHER FINANCIAL AID. In determining a

student's eligibility for monetary assistance, including a

scholarship or grant, awarded by a state agency or the amount of

financial assistance to provide the student, an amount of $10,000

or less in proceeds from college savings bonds, including

principal and accumulated interest, may not be considered:

(1) a financial resource of the student; or

(2) a form of financial aid or assistance to the student.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. ELIGIBILITY REQUIREMENTS AND PROCEDURES FOR

DESIGNATION AS COLLEGE SAVINGS BOND

Sec. 1233.151. BONDS ELIGIBLE FOR DESIGNATION AS COLLEGE SAVINGS

BONDS. All or part of the following bonds are eligible to be

designated as college savings bonds:

(1) veterans' land and housing bonds authorized under Sections

49-b and 49-b-1, Article III, Texas Constitution, issued by the

Veterans' Land Board;

(2) farm and ranch loan bonds authorized under Section 49-f,

Article III, Texas Constitution;

(3) water development bonds authorized by Sections 49-c, 49-d,

49-d-1, 49-d-2, 49-d-4, 49-d-6, and 50-d, Article III, Texas

Constitution, issued by the Texas Water Development Board;

(4) college student loan bonds authorized by Sections 50b and

50b-1, Article III, Texas Constitution, issued by the Texas

Higher Education Coordinating Board; or

(5) bonds issued by an issuer to refund bonds described by

Subdivisions (1)-(4).

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.152. APPLICATION FOR DESIGNATION. To have a bond

designated as a college savings bond, the issuer must:

(1) apply for approval in the manner prescribed by the

committee; and

(2) submit with the application any other information the

committee requires.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.153. COMMITTEE REVIEW AND DETERMINATION. (a) The

committee shall examine an application and other information

submitted by an issuer under Section 1233.152.

(b) The committee shall recommend to the board that all or part

of the bonds be approved for designation as college savings bonds

if the committee determines that the designation:

(1) is advisable; and

(2) is of economic benefit to the bondholders and to this state.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.154. CONSIDERATION BY BOARD; DESIGNATION. (a) The

board shall consider the application and other information

submitted by an issuer and shall approve the designation of part

or all of the bonds as college savings bonds if, after examining

the application and other information, the board determines that

the designation as college savings bonds is advisable.

(b) The bonds shall be designated as college savings bonds in

any manner that:

(1) the resolution providing for the issuance of the bonds

specifies; and

(2) the board considers appropriate.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.155. CONSIDERATION AND DESIGNATION OF ADDITIONAL

BONDS. (a) A state agency, including a state agency listed

under Section 1233.151, that issues general obligation bonds not

specified by that section may apply to the committee to issue

those general obligation bonds as college savings bonds.

(b) The committee shall consider the application as provided by

Section 1233.153 and may recommend to the board that the state

agency be granted authority to designate all or part of the

general obligation bonds issued by the state agency as college

savings bonds if the committee determines that the authorization:

(1) is advisable;

(2) is consistent with the purposes of this chapter; and

(3) is of economic benefit to the bondholders and to this state.

shall approve the designation of all or part of the bonds as

college savings bonds if the board determines that the

designation of the bonds as college savings bonds is advisable.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.156. APPROVAL BY ATTORNEY GENERAL. The attorney

general may not approve the issuance as a college savings bond of

a bond that requires the attorney general's approval before

issuance unless the bond is issued in accordance with this

chapter.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER E. ISSUANCE, SALE, AND MARKETING

Sec. 1233.201. TYPE AND DENOMINATION OF BOND. A college savings

bond:

(1) must be a:

(A) zero coupon bond;

(B) capital appreciation bond;

(D) municipal multiplier bond;

(E) capital accumulator bond; or

(F) similar type of bond that will encourage the purchaser to

hold the bond until maturity; and

(2) must be issued in small denominations, in accordance with

guidelines established by the committee to make the bonds

attractive for financing the costs of higher education.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.202. REDEMPTION PRICE. A college savings bond may not

be callable before maturity at a price less than its stated value

at maturity except:

(1) under a mandatory redemption or call provision of the

resolution authorizing the bond; or

(2) as otherwise authorized by law.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.203. AGGREGATE PRINCIPAL AMOUNT. For the purpose of

determining the amount of bonds that an issuer may issue under

the Texas Constitution and designate as college savings bonds

under this chapter, the aggregate principal amount is the

aggregate of the initial offering prices, excluding accrued

interest, at which the bonds are offered for sale to the public,

including a private or negotiated sale, without a reduction for

an underwriter's discount or the fee of a placement agent or

other intermediary.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.204. PRIVATE OR NEGOTIATED SALE. (a) A series of

bonds that includes college savings bonds may be sold at a

private or negotiated sale if the committee determines that a

private or negotiated sale will result in a more efficient and

economic sale of the bonds or greater access to the bonds by

investors who are residents of this state.

(b) If college savings bonds are sold at a private or negotiated

sale, the underwriter to whom the bonds are sold must have, in

the committee's judgment, sufficient capability to broadly

distribute the bonds to investors who are residents of this

state.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.205. MARKETING AND DISTRIBUTION. (a) The committee

shall coordinate the marketing and distribution of college

savings bonds.

(b) The committee may delegate to the board responsibility for

disseminating information about and advertising the college

savings bonds. The board may use its staff to assist in, or may

contract with another entity for services to carry out, a duty

delegated to the board under this subsection.

advisors and for legal services to assist the committee in

marketing and distributing and in disseminating information about

college savings bonds.

(d) In coordinating the marketing of college savings bonds, the

committee shall emphasize the use of college savings bonds to

finance the costs of higher education. For this purpose, the

committee shall provide information about the college savings

bonds to institutions of higher education, other

education-related organizations, the financial services

community, and the public.

(e) The committee may not publish information purporting to

describe the details or terms of or the security for a particular

issue of college savings bonds unless the issuer of the college

savings bonds approves publication of that information.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

Sec. 1233.206. USE OF PHRASE "COLLEGE SAVINGS BOND" RESTRICTED.

A public legal entity, including a state agency or a municipality

or other political subdivision, may not, unless the board has

designated a bond or note as a college savings bond under this

chapter:

(1) use the phrase "college savings bond" in connection with the

issuance, sale, or marketing of a bond or note by the entity; or

(2) authorize a broker or dealer in municipal bonds or notes to

use the phrase "college savings bonds" in connection with the

sale, resale, marketing, or distribution of a bond or note.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1,

1999.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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