DALLAS -- The Texas National Research Laboratory Commission yesterday approved a $720 million settlement agreement with the federal government that compensates the state for its investment in the canceled Superconducting Super Collider project.
"It allows Texas to survive the termination of the SSC in reasonable financial shape," said Shelton Smith, chairman of the state commission appointed to oversee the high energy physics project.
Under the tentative agreement announced about 10 days ago, Texas gets $145 million in cash and $510 million in land, buildings and equipment to develop other scientific projects at the SSC site south of Dallas. The state also would receive a $65 million grant to complete the SSC's linear accelerator for use as pan of a proton cancer treatment and research center.
In exchange, Texas is dropping its legal claims against the federal government for killing the $11 billion project in which the $2 billion already had been invested, including $539 million by the state.
Smith said the settlement resolves a complex problem and helps avoid a "legal war of massive proportions."
Although the settlement agreement still must be approved by Congress and the $65 million grant must go through a peer review procedure, Smith said he is optimistic that the deal will dose by the end of the year.
Commission vice chairman Del Williams, who is general counsel at Dallas-based First Southwest Co., said that Congress could approve the agreement before Labor Day recess and the president could then sign it.
An independent peer review of the medical and scientific feasibility of using the SSC's linear accelerator as part of a medical research and treatment center is expected to be completed in the next few months.
After those items are completed and the agreement closes, the commission will determine how to spend the $145 million cash settlement and reduce debt The state of Texas issued $250 million in lease revenue bonds and $250 million in general obligation bonds, although it did not spend about $100 million in proceeds.
The cash settlement "would be combined with resources on hand to significantly reduce debt," Williams said. "The decision will be made when the money is on hand."
Officials have indicated that the money would be used to reduce debt service on the lease-revenue bonds and a variety of options would be considered, including defeasance, redemption, tender offer or other methods.
"We believe we will have sufficient funds to handle all the revenue bonds if we choose to do so," said Smith, a Houston attorney. However, "that should not be construed to mean that we have made that decision."
In the meantime, the U.S. Department of Energy has given the state of Texas a $7 million grant to study how to use the SSC project. Among the possibilities are a medical research and treatment center, an applied superconductivity and cryogenics technology center and a super computing center.
If it had been built, the SSC would have been one of the largest scientific research projects in the world, and its so-called atom smasher was expected to help unravel some of the scientific mysteries of the universe.