LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                        February 20, 1995



 TO:     Honorable Kenny Marchant, Chair        IN RE:  House Bill No. 686
         Committee on Financial Institutions            By: Hernandez
         House of Representatives
         Austin, Texas






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 $400 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-  $3.63 million
FY 1997-  $9.96 million    




FY 1998- $15.39 million
 FY 1999- $20.82 million
FY 2000- $28.30 million
level debt service ($28.30 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, RR