LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          April 5, 1995



 TO:     Honorable John T. Montford, Chair      IN RE:  Senate Bill No. 505
         Committee on Finance                           By: Turner, Jim
         Senate
         Austin, Texas







FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
505 (Relating to full tuition exemption and partial lodging and
board fees exemption for Texas Army National Guard/ROTC
students.) this office has determined the following:

The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

The bill would provide a full tuition exemption and partial
lodging and board fees exemption each semester for up to 250
Texas Army National Guardsmen enrolled in Army ROTC programs in
Texas if they agree to accept a commission in the Texas Army
National Guard upon graduation and serve no less than four years
as a commissioned officer. Individuals who failed to meet the
graduation and commissioned officer service requirements would
either have to serve four years as an enlisted member of the
Texas Army National Guard or repay the funds received as
exemptions. 

There would be administrative costs associated with the proposed
program.  Institutions would be allocated the numbers of
exemptions they could award and award recipients would be
selected by committees.  In addition, the repayment possibility
would create the necessity of treating the exemptions like loan
forgiveness awards, in which each participant would be tracked
throughout the fulfillment of his or her obligations or the
repayment of the exemptions. It is assumed that these cost would
present no significant fiscal impact to the Coordinating Board.    




 Room and board charges are not state revenues, and cannot be
exempted.  If student costs for room and board were waived, the
state would have to appropriate funds to reimburse institutions
for room and board.  Room and board reimbursements are estimated
to range from approximately $500,000 in FY96 to $750,000 in
FY2000.  The estimates of cost to general revenue do not include
funds for room and board.

It is assumed that half of the eligible students would enroll in
community colleges; half in public universities.  It is estimated
that foregone tuition at community colleges would be $75,000 per
year, increasing as local tuition increased. Estimates of  state
expenses for foregone tuition and fees at public senior colleges
and universities range from $213,000 in FY96 to $259,000 in
FY2000.









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 Cost Out 
             Year      of  General    
                     Revenue Fund 001 
                                      
          1996                $213,000
          1997                 223,625
                                      
          1998                 234,750
                                      
          1999                 246,375
          2000                 258,625
                                      
                                      
                                      
       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, DF