DALLAS -- Texas lawmakers are expected to seek a Nov. 5 election for a student loan bond program following voters' rejection on Saturday of an identical $300 million authorization for the Texas Higher Education Coordinating Board.
Lawmakers yesterday introduced Senate Joint Resolution 17, which if passed could make the student loan package the only bond plan on the fall ballot now that nearly $4 billion of other proposals have been stalled in the Legislature.
Mack Adams, assistant commissioner for the board, said yesterday that even if voters reject a $300 million plan for the second time, the agency still expects to issue $100 million in bonds early next year.
New powers allow the agency to sell up to $100 million a year of revenue bonds, which do not require voter approval.
"My assumption is that we could sell $100 million in revenue bonds in 1992 if we haven't passed a GO authorization by then," Mr. Adams said.
The Texas Legislature this spring gave the board the authority to use revenue bonds if voters refuse to grant a GO authorization. While the authority's student loan bonds are backed by the state's double-A credit, they are self-supporting.
The authority sold its first $75 million revenue bond deal in June, and it included a $2.2 million non-rated junior lien offering to bolster the stand-alone credit structure.
But one official said any plan to use revenue bonds in the future might require new language to ensure that the Texas Higher Education Coordinating Board continues to secure its $100 million allocation of the state's private-activity bond volume cap.
At present, the allocation is guaranteed under a section of the volume cap formula for state-voted-issues. However, the use of non-voted revenue bonds would mean the allocation would not be guaranteed under current law. Lawmakers would likely change the law to ensure an allocation.
The $300 million debt program was narrowly defeated by about 7,000 votes on Saturday. It was the first and largest bond program in board history to be rejected by voters.
Texans approved in $85 million bond program in 1965, one of $200 million in 1969, and one of $75 million in 1989, Mr. Adams said.
The authority is now entering a period in which it expects to need $100 million annually to continue providing student loans, he said. Current funding for loans will be exhausted by April 1992, he added.
"We felt the $300 million was a conservative estimate of what we will need," he said.
He linked the defeat of the referendum to a negative vote from the state's rural areas, pointing to low turnout and possible confusion and ill feelings about another amendment relating to the state's controlversial wealth-sharing school finance law.
The $300 million authorization was originally planned for a May vote along with a proposal to authorize a state lottery in Texas. However, when the lottery failed to pass the House, the bond program was scheduled for the Aug. 10 special election.
Now, if SJR 17 is approved, the new bond program will appear on the Nov. 5 ballot that will include municipal elections and possibly other state-backed bond proposals.
For instance, lawmakers are still debating the size of the prison bond program, with estimates running as high as $1.1 billion. One source said lawmakers may address a capital plan for prisons in a special session next month.
Also, supporters of a plan to use $500 million in state GO bonds to lure a McDonnell-Douglas jet-making plant to Texas has been revived after an earlier setback in a legislative committee.
Lawmakers tonight will close a special session called last month to draft a $59 billion budget for the two-year period beginning Sept. 1. Gov. Ann Richards has said that if the budget is not finalized, she will call legislators back into session on Wednesday.
The fate of up to $4 billion in GO and revenue bond proposals is still uncertain.
"We can't say which [bond] programs will pass and which ones won't," said an aide to the Senate Finance Committee. "It depends on which copy and which version of the budget you are holding in your hand."
