Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 14, 1995

 TO:     Honorable Irma Rangel, Chair           IN RE:  House Bill No. 1792
         Committee on Higher Education                  By: Junell
         House of Representatives
         Austin, Texas

FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
1792 (Relating to the tuition charged to nonresident students at
certain public institutions of higher education) this office has
determined the following:

The bill would set the nonresident undergraduate tuition rate at
Texas public universities and health-related institutions at an
amount equal to the average tuition charged Texas residents in
the five most populous states (other than Texas).  In academic
year 1994-95, the average tuition charged a Texas resident taking
30 hours in California, New York, Florida, Pennsylvania, and
Illinois was $222 per hour.  The nonresident tuition rate in
Texas is currently $176 per hour. 

The fiscal implications shown below are based on the following
assumptions. First, that approximately 10 percent of nonresident
students would decide not to attend college in Texas due to
increased nonresident tuition.  The anticipated decline in
students would reduce the demand for general revenue formula
funding.  Additional savings to general revenue are anticipated
due to increased tuition revenue at the institutions.  Assuming
continuation of the current policy of using an "all funds" 
funding methodology for universities,  increases in tuition
income offset general revenue funding.  Thus, as tuition income
from nonresident students increases, less general revenue would
be needed to meet the funding requirements of the public

The probable fiscal implication of implementing the provisions of    

the bill during each of the first  five years following passage 
is estimated as follows:

            Fiscal  Probable Savings   Probable Savings     Total Probable   
             Year      to General         to General      Savings to General 
                    Revenue Fund 001   Revenue Fund 001    Revenue Fund 001  
                      (Enrollment         ( Tuition                          
                        Decline)          Increase)                          
          1996            $10,900,000        $25,650,000          $36,550,000
          1997             11,020,000         25,920,000           36,940,000
          1998             11,060,000         26,010,000           37,070,000
          1999             11,090,000         26,100,000           37,190,000
          2000             11,130,000         26,190,000           37,320,000

       Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.

Source:   Higher Education Coordinating Board
          LBB Staff: JK, MK, WRR