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 Representatives Austin, Texas Austin, Texas IN RE: Conference Committee Report for House Joint Resolution No. 50 FROM: John Keel, Director In response to your request for a Fiscal Note on House Joint Resolution No. 50 (proposing a constitutional amendment providing for the issuance of general obligation bonds by the Texas Higher Education Coordination Board) this office has determined the following: The proposed constitutional amendment would provide additional bonding authority to the Texas 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. 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 additional direct or indirect costs to the state are anticipated as a result of the bond issuance other than the cost of publication. The cost to the state for publication of the resolution is $90,000. Source: LBB Staff: JK, DF