Texas Governor Perry signs University of Texas Medical Branch Galveston (UTMB) Funding and Texas Windstorm Insurance Reform - House Bill 4586
The 81st Texas Legislature's appropriations and other funding allocates the University of Texas Medical Branch (UTMB) with $1.4 billion for restoration and expansion of facilities.
This is fantastic news for Galveston with 1000's of new jobs and a needed economic boost for Galveston. The new highrise next to UTMB, The Emerald By The Sea, is also sure to benefit from the new jobs and next door economic activity.
View over UTMB from The Emerald By The Sea
House Bill 4586 gives UTMB $150 million, allowing the university to draw $450 million from the Federal Emergency Management Agency. House Bill 51 authorizes UTMB to issue $150 million in tuition revenue bonds for a new hospital building, helping the campus return to pre–Hurricane Ike inpatient capacity levels. The tuition revenue bond will match a $200 million grant from the Sealy & Smith Foundation.
Perry traveled to the island to sign the legislation in Levin Hall, flanked by University of Texas System regents, island legislators and local officials.
Perry also signed a bill authorizing $150 million in tuition revenue bonds, which the medical branch plans to use to build a new 200-bed tower next to John Sealy Hospital. Once the tower is built, the medical branch will be back to the 550-bed capacity it had before Hurricane Ike flooded the campus and left $710 million in physical damage and revenue losses.
The new construction funding is contingent on the formation of a taxing district or some other form of local funding.
The legislation also ensures that Texas coastal residents have affordable windstorm insurance .The fund would cover losses from a big storm along the coast. Insurance losses from Hurricane Ike totaled more than $2.2 billion.
The restructuring relies in large part on 10-year bonding to replenish the windstorm account after a major hurricane. One provision calls for the state to provide a bridge loan of sorts to the windstorm fund until bonds can be issued to cover damage claims, said Sen. Troy Fraser, a Horseshoe Bay Republican who worked on the bill all session.
Coastal residents would pay into the fund through their insurance premiums to cover the costs of the bonds.
"This ensures not only that we will be ready for another storm, but that in the years when we don't have a catastrophe that we won't be wasting money — we will be banking it," said Sen. Mike Jackson, R-La Porte, the Senate author of the measure.
"This is a win-win for policyholders and the state of Texas."
For thousands of coastal Texans, the association became the only wind damage property insurer after private companies pulled out of the region in the wake of Hurricanes Katrina and Rita in 2005. The association has been funded by policyholders' premium payments, assessments on insurance companies that do business in the state and reinsurance, a backup policy sold to insurance companies.
- Under the existing system, insurance companies can seek state tax credits for some of the payments they make into the system, and those credits remove money from the state budget over time.
The new structure does not call for the state fund to buy reinsurance, though insurance companies can purchase it to cover their payments into the system in the event of a big storm.