PRINTER'S NO. 1038
No. 953 Session of 1993
INTRODUCED BY VEON, PESCI, GORDNER, LAUB, COLAIZZO, TRELLO,
GIGLIOTTI, MELIO, BELFANTI, NICKOL, BELARDI, TIGUE,
CAPPABIANCA, JOSEPHS AND PISTELLA, MARCH 25, 1993
REFERRED TO COMMITTEE ON EDUCATION, MARCH 25, 1993
AN ACT
1 Amending the act of August 7, 1963 (P.L.549, No.290), entitled,
2 as amended, "An act creating the Pennsylvania Higher
3 Education Assistance Agency; defining its powers and duties;
4 conferring powers and imposing duties on the Governor,
5 President Pro Tempore of the Senate, Speaker of the House of
6 Representatives, Superintendent of Public Instruction and the
7 Department of Auditor General; and making appropriations,"
8 establishing the Pennsylvania Higher Education Assistance
9 Agency as a creditor of bankrupt postsecondary or technical
10 institutions of learning; and making editorial changes.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 3(a) of the act of August 7, 1963
14 (P.L.549, No.290), referred to as the Pennsylvania Higher
15 Education Assistance Agency Act, amended January 18, 1968 (1967
16 P.L.952, No.424), is amended to read:
17 Section 3. Governing Bodies.--(a) Such agency shall be
18 governed and all of its corporate powers exercised by a board of
19 directors which shall consist of twenty members, nineteen of
20 whom shall be appointed as hereinafter provided, and the
21 [Superintendent of Public Instruction] Secretary of Education.
1 Three members shall be appointed by the Governor, eight shall be
2 appointed by the President Pro Tempore of the Senate, and eight
3 shall be appointed by the Speaker of the House of
4 Representatives. All members shall be of full age, citizens of
5 the United States and residents of the State, and shall be
6 appointed for terms of six years each[, except that of the
7 members first appointed by the Governor, one shall be appointed
8 for a term which shall expire on June 30, 1965, one for a term
9 which shall expire on June 30, 1967, and one for a term which
10 shall expire on June 30, 1969, and of the members first
11 appointed by the President Pro Tempore of the Senate, one shall
12 be appointed for a term which shall expire on June 30, 1965, one
13 for a term which shall expire on June 30, 1967, and one for a
14 term which shall expire on June 30, 1969, and of the members
15 first appointed by the Speaker of the House of Representatives,
16 one shall be appointed for a term which shall expire on June 30,
17 1965, one for a term which shall expire on June 30, 1967, and
18 one for a term which shall expire on June 30, 1969; and of the
19 five additional members to be appointed by the President Pro
20 Tempore of the Senate under this amendment, one shall be
21 appointed for a term which shall expire on June 30, 1969, two
22 for a term which shall expire on June 30, 1971, one for a term
23 which shall expire on June 30, 1973 and one for a term which
24 shall expire on June 30, 1975, and of the five additional
25 members to be appointed by the Speaker of the House of
26 Representatives under this amendment, one shall be appointed for
27 a term which shall expire on June 30, 1969, two for a term which
28 shall expire on June 30, 1971, one for a term which shall expire
29 on June 30, 1973 and one for a term which shall expire on June
30 30, 1975]. The eight members appointed by the President Pro
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1 Tempore of the Senate shall be members of the Senate, four of
2 whom shall be of the majority party and four of the minority
3 party, and the eight members appointed by the Speaker of the
4 House of Representatives shall be members of the House of
5 Representatives, four of whom shall be of the majority party and
6 four of the minority party, and any member of the Senate or
7 House of Representatives hereafter appointed shall serve on the
8 board only so long as he is a member of the particular body of
9 the General Assembly from which he was appointed to the board,
10 in which event he shall be ineligible to continue as a member of
11 the board as a legislative appointee and a vacancy shall exist.
12 In such a case the President Pro Tempore of the Senate or the
13 Speaker of the House of Representatives shall fill the vacancy
14 for the unexpired term in the same manner as original
15 appointments. A member of the board of directors who becomes
16 ineligible to serve as a legislative appointee shall be eligible
17 for appointment by the Governor. The board of directors shall
18 elect from its own members each year a chairman and vice
19 chairman who shall serve for terms of one year and who shall be
20 eligible for reelection for successive terms. Vacancies shall be
21 filled for the unexpired terms in the same manner as original
22 appointments. Directors shall receive no compensation for their
23 services, but shall be reimbursed for their expenses actually
24 and necessarily incurred by them in the performance of their
25 duties under this act.
26 * * *
27 Section 2. Section 4(1) of the act, amended December 20,
28 1983 (P.L.289, No.77), is amended to read:
29 Section 4. Powers and Duties.--In furtherance of the
30 purposes set forth in this act, the board of directors shall
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1 have the following powers:
2 (1) To make, guarantee, undertake commitments to make or
3 acquire and participate with lending or postsecondary
4 institutions in the making of loans, service or otherwise
5 provide loans of money upon such terms and conditions as the
6 board may prescribe within the limitations contained herein or
7 applicable Federal law, at such rates of interest as are
8 determined by the agency, to lenders, postsecondary institutions
9 and to persons who are residents of this State and who plan to
10 attend or are attending any approved institution of higher
11 education eligible under this act or applicable Federal law, in
12 this State or elsewhere to assist them in meeting their expenses
13 of higher education. No such person shall receive any loan or
14 loan guarantee in excess of annual and maximum limits as
15 established by the board of directors or in compliance with
16 limits established for loans funded, guaranteed or reinsured
17 under Federal laws. Such loans or loan guarantees shall become
18 due and payable at the direction of the board of directors.
19 Loans made or guaranteed by the agency shall not be subject to
20 the provisions of the act of January 30, 1974 (P.L.13, No.6),
21 referred to as the Loan Interest and Protection Law, or to any
22 other law which establishes a limit of interest rate which may
23 be charged thereon. The board of directors of the agency shall
24 have the sole authority and discretion to establish the interest
25 rates on all loans made or guaranteed by the agency. Loans made
26 or guaranteed by the agency which involve a postsecondary or
27 technical institution of learning which declares bankruptcy,
28 before academic credit or its equivalent can be earned for the
29 academic term for which the loan was needed, shall be collected
30 by the agency from the bankrupt institution, and the student
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1 shall be required to assign to the agency any rights the student
2 may have against the bankrupt institution and give over to the
3 agency any amount which the bankrupt institution reimburses to
4 the student; the student shall not be held liable by the agency
5 for the loan in this instance, and the agency shall be deemed
6 the bankrupt institution's creditor for all purposes of
7 collection.
8 * * *
9 Section 2. This act shall be retroactive to January 1, 1993.
10 Section 3. This act shall take effect in 60 days.
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