LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 6, 1997
         
         
      TO: Honorable Bill Ratliff, Chair            IN RE:  Senate Bill No. 1038
          Committee on Finance                              By: Duncan
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1038 ( Relating 
to the authority of the board of regents of Texas Tech University 
to issue certain bonds and notes on behalf of Texas Tech University 
and Texas Tech University Health Sciences Center.) this office 
has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1038-As Introduced
         
No fiscal implication to the State is anticipated.
         

         
 
FISCAL ANALYSIS
The bill would authorize the Board of Regents 
of Texas Tech University to combine Higher Education Fund bond 
issues for Texas Tech University and Texas Tech Health Sciences 
Center.  

METHODOLOGY
Currently, the two institutions issue 
bonds separately.  Since the debt service and related costs 
would be paid from Higher Education Fund allocations defined 
by statute, no fiscal impact to the State is anticipated.  However, 
the bill would result in reduced bond issuance costs and more 
efficient administrative and financial reporting functions. 
 The amount of savings would depend upon the size and type of 
the issue, as well as contractual arrangements with bond finance 
consultants.   In addition, the Texas Tech University Health 
Sciences Center would be able to take advantage of interim financing 
during the construction phase and would realize additional cost 
savings for reduced interest costs.  As a result, Texas Tech 
University and Texas Tech University Health Sciences Center 
could use less of the Higher Education Fund allocation for interest 
and bond issuance costs and more for buildings and other capital 
items.  Texas Tech University and Texas Tech University Health 
Sciences Center estimate interest and bond issuance costs would 
be reduced by $1.7 million for the 1998-99 biennium.
          
LOCAL
No fiscal implication to units of local government is 
anticipated.
          
   Source:            Agencies:   739   Texas Tech University Health Sciences Center
                                         733   Texas Tech University
                                         352   Bond Review Board
                                         
                      LBB Staff:   JK ,RR ,DB