LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session May 16, 1995 TO: Honorable Bob Bullock Honorable Pete Laney Lieutenant Governor Speaker of the House Senate Chamber House of Representative Austin, Texas Austin, Texas IN RE: Conference Committee Report for House Bill No. 686 FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 686 (relating to the student loan program administered by the Texas Higher Education Coordinating Board; authorizing the issuance of bonds) this office has determined the following: The bill would amend Texas Education Code , Section 52.01 to provide additional bonding authority to the Higher Education Coordinating Board for student loans granted through the Hinson- Hazelwood College Student Loan Program. Total issuance could not exceed $300 million The sale of new bonds is needed to issue student loans for the 1996-97 academic year. This bill would take effect on the date on which the constitutional amendment (HJR50) proposed by the 74th Legislature, Regular Session, 1995 takes effect. If the constitutional amendment is not approved, the bill would have no effect. The Hinson-Hazelwood College Student Loan Program is designed to be self supporting. Program revenues, including loan repayments and investment earnings should be sufficient to pay debt service on bonds authorized by HJR50 and operation of the program. Historically, the Hinson-Hazelwood College Student Loan Program has never drawn on general revenue. There is no anticipation that program conditions will change resulting in a draw on the general revenue fund. However, should the program revenues be insufficient, the bonds carry a general obligation pledge, or full faith and credit of the state which would require a draw on general revenue. Estimated debt service on the bonds is: FY 1996- $3.62 million FY 1997- $9.96 million FY 1998- $15.39 million FY 1999- $19.91 million FY 2000- $23.78 million level debt service ($23.78 million) for year 6 through year 25 No significant fiscal implication to units of local government is anticipated. Source: Comptroller of Public Accounts, Texas Public Finance Authority, Bond Review Board, Higher Education Coordinating Board LBB Staff: JK, MK, DF