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
  
**************************************************************************
*  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