DALLAS -- Texas probably will use most of a cash settlement from the federal government to compensate for the state's investment in the canceled Superconducting Super Collider program to reduce $250 million in lease revenue bond debt, a state official said yesterday.
"The intent is to reduce debt," said Ed Bingler, director of the Texas National Research Laboratory Commission, the state agency that oversees the high-energy physics project that was killed by Congress last year. "But there will be no decision until the agreement is final."
Bingler said he expects that an agreement between Texas and the U.S. Department of Energy could be finalized in six weeks or more, depending on how fast technical details are worked out.
Under the preliminary agreement, announced Friday, Texas will receive $210 million in cash and $510 million in land, buildings, and equipment for its investment in the $11 billion project that was under construction south of Dallas when it was canceled.
The agreement was considered a coup for the state because Texas invested less than that -- about $539 million -- in the project. That included the sale of $250 million in lease revenue bonds and $250 million in general obligation debt.
In the tentative cash settlement, plans call for earmarking $65 million to help complete a linear accelerator for cancer treatment and to help transform the super collider site into a medical research and care center. However, details still need to be worked out.
The remaining $145 million probably would be used to pay debt after a final agreement is made.
"When the funds are released to the state, it will give the state the resources necessary to deal with the lease revenue bonds," said Del Williams, vice chairman of the research laboratory commission and general counsel for Dallas-based First Southwest Co. "But at this moment, we don't have the money in hand, and no firm decisions have been made."
Williams said the state was looking for the most efficient way to discharge its obligatior and would consider bond defeasance, redemption, or a tender offer. In the meantime, the state has appropriated money to pay the principal and interest on the $250 million in lease revenue bonds until Aug. 31, 1995, the end of its biennium.
Bingler said the commission has not focused on reducing the general obligation debt incurred in financing the collider, although some bond topics issues could be discussed when the nine-member board meets in Dallas Aug. 1. After that, "the commission will make a decision that will be closely coordinated with all the state agencies and the governor's office," he said.
Bingler said the Texas Public Finance Authority is evaluating ways to reduce the debt, although the agency's director, Anne Schwartz, declined to comment.
However, most state officials have said they consider the settlement a good deal, and for months have repeatedly said they plan to repay all debt incurred to finance the collider.
The project was expected to be the largest high-energy physics project in the world and had already cost billions of dollars when it was canceled last fall.