LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
February 25, 1997
TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 1235
Committee on Higher Education By: Junell
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1235 ( Relating
to authorizing the issuance of revenue bonds for certain public
institutions of higher education.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by HB1235-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(619,793) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would authorize the issuance of bonds by Texas A&M
University System for capital improvement purposes at Texas
A&M International University in the amount of $5,000,000. The
bill would also authorize the bonds to be issued as part of
the systemwide revenue financing program that pledges all or
any part of the revenue funds of the system components to the
payment of the bonds.
Methodolgy
Upon issuance of the bonds, A&M University System will be obligated
to pay debt service and at the end of the construction phase
increased operational costs would be incurred.
It is assumed
that the bonds will be issued in FY 1998 and will remain outstanding
for 20 years. It is also assumed that the Legislature will
appropriate general revenue funds to the institution to cover
its debt service. The projected total debt service for $5 million
in bonds is $8.8 million. For FY 1998-2002, debt service would
be approximately $1.9 million. It is assumed that operating
and maintenance costs would begin in 2001. The projected total
operating and maintenance costs for 20 years would be $2.7
million.
Operation and maintenance cost would be provided
through formula funding and utility appropriations. Using
the FY 1996 operation and maintenance costs per gross square
feet for the institution, it is assumed that the annual operation
and maintenance appropriations from general revenue would be
$135,750 for approximately 37,500 new gross square feet. It
is assumed that those appropriations would not be made until
FY 2001.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from General
Revenue Fund
0001
1998 ($164,877)
1998 (454,916)
2000 (454,188)
2001 (590,309)
2002 (590,008)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($164,877)
1999 (454,916)
2000 (454,188)
2001 (590,309)
2002 (590,008)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 352 Bond Review Board
781 Higher Education Coordinating Board
710 Texas A&M University System
LBB Staff: JK ,LP ,DB