Featured: Dr. Guy Bailey, President, The University of Texas Rio Grande Valley, during the Wednesday, March 13, 2019 ribbon-cutting ceremony of the landmark University of Texas Health Rio Grande Valley Biomedical Research Building, which is located on DHR Health’s South Campus along E. Dove Road in McAllen. The 83,020 gross-square feet, two story building, with its estimated value of $32 million to $34 million – designed by The Warren Group of McAllen and Cantú Construction of McAllen – will help come up with treatments – and possible cures – for illnesses and diseases that affect South Texans.
Photograph By PAUL CHOUY
$70 million Health Affairs building for UTRGV in Edinburg, $30 million for Texas A&M Higher Education Center in McAllen, approved by House of Representatives, announces Rep. Canales
A proposed $70 million Health Affairs building at the University of Texas Rio Grande Valley in Edinburg is one step closer to reality following the approval by the House of Representatives on Wednesday, April 17, 2019, of House Bill 2000, Rep Terry Canales, D-Edinburg, has announced.
The measure, which must still be approved by the Texas Senate, also contains $30 million through the Texas A&M University System for construction of a research facility and nursing instruction center at the Higher Education Center in McAllen.
The proposed $30 million for the Higher Education Center in McAllen was not included when HB 2000 was first introduced on Thursday, February 28, 2019, but was added once the measure was approved on Wednesday, April 3, 2019 by the House Committee on Higher Education.
Canales, who serves as Chair of the House Committee on Transportation, is a coauthor of HB 2000.
A coauthor is a legislator authorized by the primary author of a bill or resolution to join in the authorship of the measure. Both the Senate and the House of Representatives allow an unlimited number of coauthors on a bill or resolution. A coauthor must be a member of the chamber in which the bill was filed.
“Other public universities in deep South Texas that would benefit if HB 2000 receives needed Senate approval include $60 million for construction of a STEM and health professions workforce development complex at Texas A&M Kingsville, $60 million for construction of a student classroom and events center at Texas A&M International University in Laredo, $58.5 million for an arts and media building at Texas A&M-Corpus Christi, and $20 million for an Industrial Technology Center at Texas State Technical College in Harlingen,” said Canales.
(STEM stands for the fields of Science, Technology, Engineering and Math. Discussion of STEM-related programs has been a priority in Texas and nationwide because too few college students are pursuing degrees in these fields.)
HB 2000, whose primary author is Rep. Chris Turner, D-Grand Prairie,would authorize the issuance of $3.8 billion in tuition revenue bonds for institutions of higher education in the state to finance the construction and renovation of infrastructure and facilities, according to the bill analysis of the measure by the House Research Organization (HRO).
HRO is the research arm of the Texas House of Representatives.
According to HRO, the bill would authorize tuition revenue bonds for individual institutions and projects for the following universities and university systems:
• University of Texas System ($1.3 billion);
• Texas A&M University System ($767.5 million);
• Texas State University System ($369.6 million);
• University of Houston System ($351 million);
• Texas Tech University System ($322.6 million);
• University of North Texas System ($321.5 million);
• Texas State Technical College System ($134.6 million).
• Texas Woman’s University ($100 million);
• Texas Southern University ($50 million);
• Stephen F. Austin University ($48 million); and
• Midwestern State University ($10 million).
Bonds would be payable from pledged revenue and tuition. If a board of regents did not have sufficient funds to meet its obligations, funds could be transferred among institutions, branches, and entities within each system.
“When UTRGV and its School of Medicine were first created in 2013, I served as a key sponsor of that legislation because of the many major advances in education, medical care, and economic development that I knew would come from that landmark achievement,” said Canales.
“Bringing a $70 million Health Affairs building to UTRGV in the heart of my legislative district will be the latest, spectacular addition to our campus in Edinburg,” the House District 40 lawmaker continued. “In addition, the proposed Health Affairs building will continue to increase the considerable prestige of UTRGV, help prepare many more of our best minds to enter the health care and medical professions, boost economic development, and improve our quality-of-life throughout South Texas.”
UTRGV and its School of Medicine was created by the Texas Legislature in 2013 as a result of Senate Bill 24 by Sen. Juan “Chuy” Hinojosa, D-McAllen, and Rep. René Oliveira, D-Brownsville.
The planned 111,500 gross square foot UTRGV Health Affairs building in Edinburg and proposed new construction projects at eight other UT System campuses are part of UT academic institutions’ list of projects, which were approved by regents during a Special Called Telephone Meeting, which was held in Austin on Thursday, September 6, 2018.
The $70 million Health Affairs building “will add much needed classroom and research space to accommodate undergraduate, masters, and doctoral programs to address strong demand for physician assistants, nurses, occupational therapists, speech pathologists, etc.,” according to the executive summary of the plan first unveiled by UT System officials during the Thursday, September 6, 2018 meeting.
“The facility will also accommodate planned doctoral programs in pharmacy, physical therapy, nursing practice, social work, occupational therapy, and communication sciences and disorders,” according to UT System officials.
In general, tuition revenue bonds (TRBs) generate money through the sale of bonds, which are financial instruments where investors make loans to an entity (typically corporate or governmental), and those loans are repaid with interest over a period of time. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of the bonds are debt holders, or creditors, of the issuer.
If approved for TRB funding by the Legislature, the $70 million Health Affairs building and new construction projects at the eight other UT System campuses would be submitted to the UT System Board of Regents for addition to the Capital Improvement and design development approval.
HB 2000 would not affect any authority or restriction on the activities a public institution of higher education could conduct in connection with facilities financed by authorized tuition revenue bonds.
This bill would take effect September 1, 2019.
Also, according to the HRO bill analysis:
HB 2000 would authorize tuition revenue bonds essential for the state’s institutions of higher education to build and maintain facilities, provide for enrollment growth, and remain competitive.
Tuition revenue bonds historically have been the favored method of the Legislature to fund construction projects at institutions of higher education because the bonds allow a large cost to be spread over a long period of time. This makes tuition revenue bonds a cost-effective method for funding large construction projects, such as updating or replacing classrooms, laboratories, and academic centers. Additionally, many facilities listed in CSHB 2000 are in need of significant renovations or are beyond repair.
Addressing these projects listed for deferred maintenance ultimately would save the state money while meeting student need.
As Texas’ population and workforce needs increase, demand for higher education in the state is growing. Several campuses have buildings that are at capacity and are unable to adequately serve the surrounding population. HB 2000 would provide the funding necessary for these schools to address the surge in demand through the construction and expansion of facilities. Enabling these schools to educate more students also would help Texas achieve the goals set in the Texas Higher Education Coordinating Board’s 60×30 Plan.
At the local level, HB 2000 would help smaller institutions obtain the funding necessary to complete capital projects and meet demand. Other, larger institutions are able to rely on alumni donations to help pay for new facilities, but most small schools do not have this luxury and rely on the Legislature to fund facilities that enable them to meet workforce needs and provide a quality education.
Tuition revenue bonds authorized under CSHB 2000 would be a good investment for the state because they would expand research capabilities at leading institutions and provide campuses with the resources necessary to adequately meet increased demand for higher education, preparing students to enter the workforce. Additionally, the institutions included in the bill have proven adept at refinancing tuition revenue bonds, which has saved the state millions in debt service.
HB 2000 would provide important funding to institutions of higher education through the use of an inappropriate mechanism, tuition revenue bonds.
The state should not authorize bonds to fund the creation of facilities when renovating existing structures would be more economical. Instead, the state should give greater priority to addressing deferred maintenance, which restricts enrollment growth and limits student success, and institutions should be encouraged to finance capital construction through private capital campaigns or by using existing facilities more efficiently.
According to the Legislative Budget Board, the bill would have an estimated negative impact of $660.1 million on general revenue related funds through fiscal 2020-21.
Rep. Terry Canales, D-Edinburg, who is the Chair of the House Committee on Transportation, represents House District 40 in Hidalgo County, which includes portions or all of Edinburg, Elsa, Faysville, La Blanca, Linn, Lópezville, McAllen, Pharr and Weslaco. He may be reached at his House District Office in Edinburg at (956) 383-0860 or at the Capitol at (512) 463-0426. For more on this and other Texas legislative news stories which affect the Rio Grande Valley metropolitan region, please log on to Titans of the Texas Legislature (TitansoftheTexasLegislature.