B.__All education loans made under the federal Higher Education Act of 1965, 20 United States Code, Chapter 28 that are purchased with proceeds of tax-exempt bonds using a portion of the state ceiling on private activity bonds must be guaranteed by the state agency designated as administrator of federal guaranteed student loan programs pursuant to Title 20-A, chapter 417, subchapter 1; however, this requirement does not apply to serial loans of a borrower that are guaranteed by a different guarantee agency and acquired or financed with tax-exempt bond proceeds prior to the effective date of this paragraph.__The state agency designated as administrator of federal guaranteed student loan programs pursuant to Title 20-A, chapter 417, subchapter 1 shall use its best efforts to provide competitive rates for the guarantee function.

Sec. 4. 20-A MRSA §11407, as amended by PL 1999, c. 728, §11 and affected by §§20 and 21, is further amended to read:

§11407. Authorization for Governor to request organizations to

acquire loan notes

To the extent and for the purposes contemplated by the federal Internal Revenue Code of 1954, Section 103(e), as amended, and successor provisions thereto, including without limitation the federal Internal Revenue Code of 1986, Section 150(d), as amended, the Governor may on behalf of the State request the organization of one or more nonprofit corporations to operate exclusively for the purpose of acquiring student loan notes incurred under the federal Higher Education Act of 1965, 20 United States Code, Chapter 28, Title IV, Part B, as amended. Notwithstanding the requirements of this section, if a nonprofit corporation formed under this section does not comply with the requirements of this section, the The Governor may request on behalf of the State that one or more state agencies acquire student loan notes incurred under the federal Higher Education Act of 1965, 20 United States Code, Chapter 28, Title IV, Part B, as amended.

1. Origination of loans. A nonprofit corporation formed under this section Any entity acquiring student loan notes may not originate federally guaranteed loans or otherwise extend credit to any person. The corporation entity may not discriminate against any financial institution or credit union