LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 26, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB963 by Dunnam (Relating to authorizing the issuance of
revenue bonds for the Texas State Technical College
System.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB963, As Introduced: negative impact of $(3,987,017) 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 $(1,906,667) *
* 2003 (2,080,350) *
* 2004 (2,082,100) *
* 2005 (2,082,050) *
* 2006 (2,080,850) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $(1,906,667) *
* 2003 (2,080,350) *
* 2004 (2,082,100) *
* 2005 (2,082,050) *
* 2006 (2,080,850) *
*****************************************************
Fiscal Analysis
The bill authorizes the Board of Regents of Texas State Technical
College System to issue $22 million of revenue bonds. 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, 2001 at a
seven percent interest rate, with a 20-year level debt service
amortization. Based on calculations prepared by the Texas Public Finance
Authority, the amount of debt service payments for fiscal years 2002 and
2003 would be $1,906,667 and $2,080,350, respectively. The total
estimated amount of debt service from fiscal year 2002 to fiscal year
2021 is estimated to be $41.4 million.
No amounts are included for operations and maintenance costs related to
additional facilities. Operations and maintenance costs are provided to
the Texas State Technical College System 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: 352 Texas Bond Review Board, 781 Texas Higher
Education Coordinating Board, 347 Texas Public
Finance Authority, 719 Texas State Technical
College System
LBB Staff: JK, CT, PF, DB