LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 13, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB254 by Ellis, Rodney (Relating to authorizing the
issuance of revenue bonds for certain public institutions
of higher education.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB254, As Introduced: negative impact of $(36,554) 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(16,834) *
* 2003 (19,720) *
* 2004 (19,300) *
* 2005 (18,880) *
* 2006 (18,460) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $(16,834) *
* 2003 (19,720) *
* 2004 (19,300) *
* 2005 (18,880) *
* 2006 (18,460) *
*****************************************************
Fiscal Analysis
The bill would authorize the Board of Regents of Texas A&M University
System to issue $100,000 of revenue bonds for Texas A&M International
University, and would authorize the Board of Regents of the University of
Houston System to issue $100,000 of revenue bonds for the University of
Houston-Clear Lake. 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 7%
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 $16,834
and $19,720, respectively. The total estimated amount of debt service
from fiscal year 2002 to fiscal year 2021 is estimated to be $376,914.
No amounts are included for operations and maintenance costs related to
additional facilities. Operations and maintenance costs are provided to
general academic 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: 783 University of Houston System Administration,
347 Texas Public Finance Authority, 352 Texas
Bond Review Board, 781 Texas Higher Education
Coordinating Board
LBB Staff: JK, SD, DB