LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 10, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB658 by Junell (Relating to the revenues of public
institutions of higher education and to the issuance of
revenue bonds to fund capital projects at those
institutions.), Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB658, Committee Report 2nd House, Substituted: negative impact *
* of $(98,297,617) through the biennium ending August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 (98,297,617) *
* 2004 (111,116,400) *
* 2005 (111,330,950) *
* 2006 (111,328,650) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $0 *
* 2003 (98,297,617) *
* 2004 (111,116,400) *
* 2005 (111,330,950) *
* 2006 (111,328,650) *
*****************************************************
Fiscal Analysis
The bill would authorize the following institutions or systems of
institutions of higher education to issue up to $1.2 billion of revenue
bonds:
Prairie View A&M University - $68 million
Tarleton State University - $19.8 million
Texas A&M University - Commerce - $15.8
Texas A&M University - Corpus Christi - $36 million
Texas A&M International University - $21.6 million
Texas A&M University at Galveston - $10.6 million
Texas A&M University Kingsville - $22.4 million
Texas A&M University - Texarkana - $18 million
West Texas A&M University - $24.1 million
Texas A&M University Health Science Center - $12.9 million
The University of Texas at Arlington - $29.3 million
The University of Texas at Brownsville - $27.5 million
The University of Texas at Dallas - $38.8 million
The University of Texas at El Paso - $22.5 million
The University of Texas - Pan American - $37.4 million
The University of Texas of the Permian Basin - $9.9 million
The University of Texas at San Antonio - $40.5 million
The University of Texas at Tyler - $32.4 million
The University of Texas Southwestern Medical Center at Dallas - $40
million
The University of Texas Medical Branch at Galveston - $18 million
The University of Texas Health Science Center at Houston - $20.7 million
The University of Texas Health Science Center at San Antonio - $30.6
million
The University of Texas System Administration - Regional Academic Health
Center - $27 million
The University of Texas Health Center at Tyler - $12.2 million
The University of Texas M.D. Anderson Cancer Center - $18 million
University of Houston - $54 million
University of Houston - Downtown - $19.3 million
University of Houston-Clear Lake - $32.7 million
University of Houston-Victoria - $2.8 million
Angelo State University - $17.9 million
Lamar University - Beaumont - $23.1 million
Lamar Institute of Technology - $5.6 million
Lamar State College-Orange - $2.3 million
Lamar State College-Port Arthur - $7.8 million
Sam Houston State University- $18 million
Southwest Texas State University - $19.5 million
Sul Ross State University- $13.9 million
University of North Texas - $29.0 million
University of North Texas Health Science Center at Fort Worth - $22.3
million
University of North Texas at Dallas $27 million
Texas Woman's University - $27.3 million
Midwestern State University - $9.5 million
Stephen F. Austin State University - $10.8 million
Texas Tech University - $25.0 million
Texas Tech University Health Sciences Center - $64.2 million
Texas Southern University - $79 million
Texas State Technical College - Harlingen - $3.6 million
Texas State Technical College - Marshall - $1.9 million
Texas State Technical College - Waco - $3.6 million
Texas State Technical College - West Texas - $2.4 million.
The bond proceeds would be used for the acquisitions, purchase,
construction, renovation or equipping of buildings, facilities, and
infrastructure. These bonds would be payable from pledged revenue,
including student tuition. These bonds would not be general obligations
of the State. However, the issuance of these bonds would have fiscal
implications for the State. Although tuition income is pledged against
the bonds, historically the Legislature has appropriated General Revenue
to reimburse institutions of higher education for tuition used to pay
the debt service. It is assumed that the Legislature would continue
this policy.
Methodology
It is assumed that the bonds would be issued on September 1, 2002 at a 7%
interest rate, with a 20-year level debt service amortization with the
exception of the specified bonds for Prairie View A&M University, Texas
A&M University and University of North Texas at Dallas. Certain bonds
for Prairie View A&M University and Texas Southern University would be
issued on March 1, 2003, and the University of North Texas at Dallas
bonds would be issued on September 1, 2003. Based on calculations
prepared by the Texas Public Finance Authority, the amount of debt
service payments for fiscal year 2003 would be $98,297,617. The total
estimated amount of debt service from fiscal year 2003 to fiscal year
2022 is estimated to be $2,215,905,717.
No amounts are included for operations and maintenance costs related to
additional facilities. Operations and maintenance costs are provided to
higher education institutions based on predicted square feet not actual
square feet. However, if the increased space resulted in additional
enrollment, it is possible that the predicted square feet and therefore
operations and maintenance costs would increase.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 347 Texas Public Finance Authority
LBB Staff: JK, SD, PF, DB