SRC-VRA H.B. 3350 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 3350
78R6368 KSD-DBy: Davis, John (Ellis, Rodney)
Finance
5/22/2003
Engrossed

BACKGROUND AND PURPOSE 

In June 2001, the University of Houston incurred approximately
$100,000,000 in damages to buildings and other infrastructures from
Tropical Storm Allison.  While insurance and funds from the Federal
Emergency Management Agency (FEMA) will cover approximately 78 percent of
the cost of recovery, the university has had to borrow approximately
$25,000,000 from Higher Education Assistance Funds and university reserves
dedicated to other institutional priorities in order to recover from the
storm. H.B. 3350 allows the University of Houston System board of regents
to issue revenue bonds not to exceed $25,000,000 in order to cover all
associated recovery costs. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter B, Chapter 55, Education Code, by adding
Section 55.1743, as follows: 

Sec.  55.1743.  THE UNIVERSITY OF HOUSTON SYSTEM.   (a)  Authorizes the
board of regents of the University of Houston System (board), in addition
to the other authority granted by this subchapter, to acquire, purchase,
construct, improve, renovate, enlarge, or equip property, buildings,
structures, facilities, roads, or related infrastructure for the
University of Houston System, including the individual campuses of the
system, to be financed by the issuance of bonds in accordance with this
subchapter and in accordance with a system-wide revenue financing program
adopted by the board in an aggregate principal amount not to exceed $25
million. 

(b)  Authorizes the board to pledge irrevocably to the payment of those
bonds all or any part of the revenue funds of an institution, branch, or
entity of the University of Houston System, including student tuition
charges.   Prohibits the amount of a pledge made under this subsection
from being reduced or abrogated while the bonds for which the pledge is
made, or bonds issued to refund those bonds, are outstanding. 

(c)  Authorizes the board,  if sufficient funds are not available to the
board to meet its obligations under this section, to transfer funds among
institutions, branches, and entities of the University of Houston System
to ensure the most equitable and efficient allocation of available
resources for each institution, branch, or entity to carry out its duties
and purposes. 

SECTION 2.  Effective date:  upon passage or September 1, 2003.