LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                           May 4, 1995



 TO:     Honorable Irma Rangel, Chair           IN RE: Committee Substitute
         Committee on Higher Education          for
         House of Representatives                             HouseBill No.
         Austin, Texas                          1592
                                                            








FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
1592 (Relating to the establishment of the University Bonds for
the Education of Texans program; authorizing the issuance of
special savings certificates) this office has determined the
following:

The bill would establish the University Bonds for the Education
of Texans program through which the state treasurer would be
authorized to issue special savings certificates (bonds) for use
in paying college tuition and fees.  The program would allow a
parent or guardian of a child 18 years or younger to establish an
education savings account within the treasury through the
purchase of bonds.  Such accounts would accrue interest monthly. 
When a child with such an account reaches the age of 18 and
enrolls in an institution of higher education, the registrar of
the institution would credit the face amount of the bond and
interest accrued against any payment for tuition and fees
required of the student.  The state treasurer would reimburse
institutions for the face amount of bonds and accrued interest in
accordance with rules established by the treasurer.

For students choosing to attend private or out-of-state
institutions, the state treasurer, upon presentation of a bond by
the person whose name appears on the bond, would  pay the person
the face amount of the bond and accrued interest.  In addition,
for persons with bonds issued on their behalf, upon reaching the
age of 18 and presentation of a bond bearing their name, the    




state treasurer would pay the face amount of the bond and
interest accrued.

 The bill would also direct the state treasurer to establish a
program to provide economically disadvantaged youths with
scholarships to institutions of higher education.  Under the
scholarship program, the treasurer would encourage persons to
contribute to the purchase of bonds for the benefit of
economically disadvantaged youths.  The treasurer would hold
bonds purchased under the program and redeem them at the
institution of higher education in which the scholarship
recipient enrolled.

The bill would direct the state treasurer to report annually the
status of the program to the Governor, Lieutenant Governor, and
Speaker of the House.

Savings bonds issued under the authority of the bill would not
represent indebtedness of the State and the program would be
administered by the treasurer in such a manner as to be self-
supporting.


No fiscal implication to the State or units of local government
is anticipated.


Source:
          LBB Staff: JK, MK, WRR