Office of House Bill AnalysisH.B. 658
By: Junell
Higher Education


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. 


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. 


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

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). 


September 1, 2001.