HBA-LJP H.B. 658 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 658 By: Junell Higher Education 77/17/2001 Enrolled BACKGROUND AND PURPOSE Under state law, the governing board of an institution of higher education (institution) is authorized to issue bonds or notes to acquire, purchase, construct, improve, renovate, enlarge, or equip property, buildings, structures, facilities, roads, and other infrastructure related to the institution. Certain systems and institutions may need more funds to finance these types of projects. House Bill 658 authorizes the board of regents for certain universities and university systems to issue additional bonds to fund infrastructure projects at the specified institutions. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 658 amends the Education Code to authorize the board of regents of The Texas A&M University System, The University of Texas System, the University of Houston System, the Texas State University System, the University of North Texas System, Texas Woman's University, Midwestern State University, Stephen F. Austin State University, the Texas Tech University System, Texas Southern University, and the Texas State Technical College System to issue bonds for specified institutions and entities to finance the acquisition, purchase, construction, improvement, renovation, enlargement, or equipping of certain infrastructure with these bonds in accordance with stipulated guidelines in an aggregate principal amount not to exceed the amount specified for each project. Each board is authorized to pledge irrevocably to pay the bonds with all or any part of the revenue funds of any entity of their respective university systems. The bill prohibits the reduction or abrogation of the amount of a pledge made under these provisions while the bonds or bonds issued to refund those bonds are outstanding. If the board of a university system does not have sufficient funds available to meet its obligations under these provisions and the bond was issued for an entity of the system, the bill authorizes a board to transfer funds among entities of its university system to ensure equitable and efficient resource allocation. The bill authorizes the use of any proceeds of bonds that are for one or more specified projects at an institution that is not required for the specified project for the renovation of existing structures and facilities at the institution. The bill prohibits the issuance of bonds for certain facilities at Prairie View A&M University and Texas Southern University before March 1, 2003. The bill also prohibits the issuance of bonds for the construction and development of certain facilities at the University of North Texas at Dallas before September 1, 2003 (Secs. 55.1731, 55.1735, and 55.17391). The bill requires that special mineral land and tuition revenues that are deposited in the treasury and the interest earned on those revenues be treated as designated funds in the general revenue fund. The bill provides that the deposit of those revenues in the treasury to the credit of an account in the general revenue fund does not: _affect the pledge of the revenues or the ability of the board to pledge the revenues to secure and pay bonds issued or incurred by the board; _cause the bonds to constitute debt of the state or to be payable from the full faith and credit of the state; _change the character of the revenues as separate revenue of the institution collecting the revenue; or _ cause the revenue to be considered general revenue for purposes of provisions in the Texas Constitution related to higher education funding (Sec. 51.008). The bill sets forth that provisions that limit the appropriation of money, except money not legally considered revenue funds, under the control of a board do not impair the authority of a board to pledge and use any revenue or money under the control of the board to secure or pay obligations of the board. The bill requires a board to fix each rental, rate, charge, or fee in the amount that the board determines is necessary to pay or provide for specified services and costs. The requirement does not authorize a board to impose a rental, rate, charge, or fee in an amount that exceeds any imposed applicable limit. The bill authorizes a board to accumulate all mandatory fees or charges imposed as a separate facilities and services charge (Sec. 55.16). EFFECTIVE DATE September 1, 2001.