Austin, Texas
April 11, 2005

Honorable Geanie Morrison, Chair, House Committee on Higher Education
John S. O'Brien, Deputy Director, Legislative Budget Board
HB2269 by Woolley (Relating to authorizing the issuance of revenue bonds by The University of Texas System for an adult stem cell research center at the Texas Medical Center.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB2269, As Introduced: a negative impact of ($4,301,686) through the biennium ending August 31, 2007.

Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006 ($2,150,843)
2007 ($2,150,843)
2008 ($2,150,843)
2009 ($2,150,843)
2010 ($2,150,843)

Fiscal Year Probable (Cost) from
2006 ($2,150,843)
2007 ($2,150,843)
2008 ($2,150,843)
2009 ($2,150,843)
2010 ($2,150,843)

Fiscal Analysis

The bill would amend Subchapter B, Chapter 55 of the Education Code by adding Section 55.1752 that would authorize The University of Texas System to issue additional revenue bonds in an amount not to exceed $24,670,000. The debt service payments will be $2,150,843 in each year of the 2006-07 biennium.  The board of regents of The University of Texas System would acquire, purchase, construct, improve, renovate, enlarge, or equip property, buildings, structures, facilities, roads, or related infrastructure for The University of Texas Health Science Center at Houston to pay the costs of establishing and operating an adult stem cell research center at the Texas Medical Center to conduct adult stem cell and related biomedical research in collaboration with other participating institutions and entities, to be financed with the proceeds of the bonds authorized in the subchapter.


In addition the bill states the board may pledge irrevocably all or any part of the revenue funds, including student tuition charges of The University of Texas System for payment of the bonds.  Furthermore, if funds are not available to meet the bond obligations authorized by this section, the section authorizes the board of regents to transfer funds among institutions, branches, and entities of The University of Texas System in an equitable manner to ensure each the most equitable and efficient allocation of available resources for each institution, branch, or entity to carry out its duties and purposes.


Although tuition income is pledged against the bonds, historically the Legislature has appropriated General Revenue to reimburse institutions for the tuition used to pay the debt service.  This note assumes the Legislature would continue this policy.


The bill takes immediate effect if it receives a vote of two-thirds of all the members elected to both the House and the Senate as provided by Section 39, Article III, Texas Constitution. If the Act does not receive the vote necessary for immediate effect, the Act will take effect September 1, 2005.


The cost to issue the bonds is based on an assumed 20-year tax-exempt bond issue, structured with level debt service with a 6% interest rate.  The debt service payments for Fiscal Year 2006 will be $2,150,843; for fiscal year 2007 will be $2,150,843; for fiscal year 2008 will be $2,150,843; for fiscal year 2009 will be $2,150,843; and for fiscal year 2010 will be $2,150,843.

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, 781 Higher Education Coordinating Board
LBB Staff: