LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION
 
April 11, 2005

TO:
Honorable Geanie Morrison, Chair, House Committee on Higher Education
 
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
 
IN RE:
HB2091 by Oliveira (Relating to authorizing the issuance of revenue bonds for The University of Texas at Brownsville.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB2091, As Introduced: a negative impact of ($8,073,290) through the biennium ending August 31, 2007.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006 ($4,036,645)
2007 ($4,036,645)
2008 ($4,036,645)
2009 ($4,036,645)
2010 ($4,036,645)




Fiscal Year Probable (Cost) from
GENERAL REVENUE FUND
1
2006 ($4,036,645)
2007 ($4,036,645)
2008 ($4,036,645)
2009 ($4,036,645)
2010 ($4,036,645)

Fiscal Analysis

The bill would authorize the issuance of a maximum of $46.3 million in revenue bonds by the University of Texas System for the University of Texas at Brownsville to finance capital infrastructure for a faculty office building.

The bonds would be payable from pledged revenue plus tuition. The bonds would not be general obligations of the state. However, the issued bonds would have fiscal implications for the State. Although tuition income is pledged against the bond, historically the Legislature has appropriated General Revenue to reimburse institutions for the tuition used to pay the debt service and this policy is assumed to continue.


Methodology

It is assumed the bonds would be issued on September 1, 2005, at a 6.0 percent interest rate with a 20-year debt service amortization. Based on calculations prepared by the University of Texas System, the amount of debt service payment would be $4,036,645 for fiscal year 2006 and $4,036,645 for fiscal year 2007. The total estimated amount of debt service (principal and interest) from fiscal year 2006 to fiscal year 2025 is estimated to be $80,732,900.

Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
347 Public Finance Authority, 352 Bond Review Board, 720 The University of Texas System Administration
LBB Staff:
JOB, CT, SD, RT, GO