CHAPTER 1233. COLLEGE OPPORTUNITY ACT
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;
(C) the Texas Higher Education Coordinating Board; or
(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;
(C) the executive administrator of the Texas Water Development
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.
(c) Public members serve staggered, six-year terms, with the
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.
(c) The bonus payment may be paid to the holder of any college
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.
(c) The board shall consider the state agency's application and
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;
(C) compound interest 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.
(c) The committee may contract for the services of financial
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.