LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 21, 1999
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB184 by Barrientos (relating to the student loan
program administered by the Texas Higher Education
Coordinating Board; authorizing the issuance of bonds),
Committee Report 2nd House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB184, Committee Report 2nd House, Substituted: positive impact *
* of $0 through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $0 *
* 2001 0 *
* 2002 0 *
* 2003 0 *
* 2004 0 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year Student Loan Funds for Debt from Student Loan Funds *
* Service *
* 2000 $0 $0 *
* 2001 (5,900,000) 5,900,000 *
* 2002 (11,300,000) 11,300,000 *
* 2003 (16,900,000) 16,900,000 *
* 2004 (22,600,000) 22,600,000 *
***************************************************************************
Fiscal Analysis
The bill would authorize $400 million in general obligation bonds for the
Texas Higher Education Coordinating Board for their college student loan
program. The bill would become effective upon the passage of a
constitutional amendment by the voters.
The college student loan program is self-supporting, with program revenue
sufficient to pay the debt service on the bonds and the costs of
operating the program. Should the program revenue be insufficient,
because the bonds are general obligations of the state, it would require
a draw on the general revenue fund. Historically, this program has
never required general revenue.
Methodology
It is assumed that the Coordinating Board would issue $75 million in
general obligation bonds per year beginning in 2001. The Coordinating
Board has existing authority of $150 million outstanding that it expects
to issue in fiscal years 1999 and 2000. The debt service would be paid
from revenue from the student loan repayments. Debt service is estimated
at $5.9 million in 2001, $11.3 million in 2002, $16.9 million in 2003,
and $22.6 million in 2004.
The Coordinating Board would have additional administrative costs
associated with the additional loans that would be provided to students
under this new authority, but these costs are not expected to be
significant since the agency would be retiring loans as new loans are
made. Any administrative costs would be paid from revenue from the
student loan repayments.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller Of Pub Accts, 781 Higher
Education Coord Bd, 352 Bond Review Board
LBB Staff: JK, TH, CT, LD