LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          April 11, 1995



 TO:     Honorable Irma Rangel, Chair           IN RE:  House Bill No. 1592
         Committee on Higher Education                  By: Dukes
         House of Representatives
         Austin, Texas






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 make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

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 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.  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 state treasurer would make arrangements for
payment to the institution for tuition and fees.

When the student redeems the bonds at a public institution, the
registrar would credit 110 percent of the face value of the bond
against tuition and fee payments of the student.  The state
treasurer would then reimburse the institution for 100 percent of
the face value of the bond.  The treasurer would be authorized to
make similar agreements with private institutions except that the
student redemption credit would be 105 percent of the face value
of the bond.  The institutional reimbursement from the treasurer
would also be 100 percent.  For purposes of this fiscal note it    




is presumed that the difference between redemption value and 
reimbursement value would be absorbed by funds available to the
respective public or private institutions.  The number of
participants and the future value of their savings cannot be
determined for purposes of this fiscal note.

The savings bonds would not represent indebtedness of the State
and the actual program would be administered by the treasurer in
such a manner as to be self-supporting.


The fiscal implication to the State or units of local government
cannot be determined.


Source:   Treasury Department, Higher Education Coordinating
Board
          LBB Staff: JK, MK, WRR