(College Station)—Texas Governor Rick Perry this week signed a bill authorizing tuition revenue bonds (TRBs) totaling $465.6 million for The Texas A&M University System and its member institutions.
The legislation authorizes a total of $1.8 billion in tuition revenue bonds to purchase, build and renovate facilities at public higher education institutions in Texas.
“We are extremely grateful that Governor Perry and the Legislature have given us the go-ahead for these projects, which will provide vitally needed buildings, expansions and improvements to 15 facilities at 12 of our campus locations across Texas,” said Texas A&M University System Chancellor Robert D. McTeer.
“We are fortunate that our lawmakers have the foresight to see that investing in higher education for the people of Texas will yield huge dividends for the future. Investing in educating our young people means that Texans will be better equipped to compete in a global marketplace and ultimately bring more jobs to our state.”
Texas A&M System projects to be funded with tuition revenue bonds include:
Tuition revenue bonds are bonds that are authorized by the Legislature for education and research related facilities for public institutions of higher education. TRBs provide a sort of good faith “cash advance” to universities. They allow universities to issue debt—against future revenue from tuition—to build classrooms, laboratories and other essential facilities.
Although the bonds are legally backed by the forthcoming tuition of each institution or system, the Legislature historically has appropriated state funds to the institutions for the debt service of the bonds.
The TRB process involves multiple layers of oversight. After the bonds receive legislative approval, the institutions must request and obtain project and financing approval from their respective Boards of Regents. Next, they must submit more detailed plans for the facilities to the Texas Higher Education Coordinating Board for evaluation.
Project evaluations and bond applications are then submitted to various offices at the state level for approvals—ultimately to the Bond Review Board for final approval before the bonds are issued. The institutions can then sell the bonds and begin servicing the debt.
The signing of this legislation gives institutions the authority to work
through the required planning and approval processes before issuing the
debt to begin construction on projects. Institutions will seek the debt
service funding for the TRBs from the Texas Legislature during its next
regular session in 2007. 