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HOUSE OF REPRESENTATIVES |
H.B. NO. |
830 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO STUDENT LOAN FUNDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Secondary Market Services Corp. -- Hawaii was formed as a Hawaii not-for-profit corporation in 1992 pursuant to section 309-1.5, Hawaii Revised Statutes, to provide liquidity to banks participating in the Federal Family Education Loan Program as a secondary market student loan purchaser in Hawaii. As of June 30, 2010, the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152) terminated new student loan originations by private entities under the Federal Family Education Loan Program. Instead, the federal government will originate all federally guaranteed student loans under the Federal Direct Loan Program. Therefore, Secondary Market Services Corp. -- Hawaii's original purpose under section 309-1.5, Hawaii Revised Statutes, has expired, and the repeal of the section will permit Secondary Market Services Corp. -- Hawaii to continue to serve the people of Hawaii in other educational and charitable activities authorized for tax-exempt organizations under section 501(c)(3) of the Internal Revenue Code.
The purpose of this Act is to repeal section 309-1.5, Hawaii Revised Statutes, relating to the authorization to establish a corporation to acquire educational loan notes.
SECTION 2. Section 309-1.5, Hawaii Revised Statutes, is repealed.
["§309-1.5 Authorization of
corporation to acquire educational loan notes. The governor is
authorized to request the organization of a private not-for-profit corporation
to be affiliated with United Student Aid Funds, Inc., which corporation shall
be established and operated exclusively for the purpose of acquiring student
loan notes under the federal Higher Education Act of 1965, as amended. The
governor is authorized to request that United Student Aid Funds organize a
single private not-for-profit corporation known as the Secondary Market
Services Corp.--Hawaii to be established and operated exclusively for the
purpose of acquiring student loan notes under the federal Higher Education Act
of 1965, as amended. The corporation:
(1) Shall be a not-for-profit corporation
organized under the laws of the State and authorized to do business within the
State and shall be the only not-for-profit corporation organized within the
State requested to conduct a program of acquiring student loan notes;
(2) Shall be required by its articles of
incorporation and bylaws to devote any income (after payment of expenses, debt
service, and the creation of reserves for the same) to the purchase of
additional student loan notes or to pay over any income to the United States; and
(3) Is authorized to issue obligations
pursuant to section 103 of the Internal Revenue Code of 1986, as amended.
Those obligations shall be payable solely from the revenues and assets of the
corporation pledged thereto and shall not constitute a general, limited, or
moral obligation of the State, or any department, agency, or political
subdivision thereof under any constitutional, statutory, or other provision.
Neither the full faith and credit of the State nor that of any department,
agency, or political subdivision thereof shall be pledged to the payment of the
principal of, or interest on, those obligations and those obligations shall so
state on their face. Bonds, notes, and other obligations of the corporation
are declared to be issued for a public purpose and to be public
instrumentalities and, together with the income therefrom, shall be exempt from
all state, county, and municipal taxation, except inheritance, transfer, and
estate taxes."]
SECTION 3. Statutory material to be repealed is bracketed and stricken.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Student Loan Funds; Secondary Market Services Corp. -- Hawaii
Description:
Repeals state authorization to allow a private not-for-profit corporation to acquire student loan notes.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.