LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 13, 1995 TO: Honorable John T. Montford, Chair IN RE: Committee Substitute Committee on Finance for Senate Senate Bill No. 505 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 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 150 Texas National/Air Guardsmen enrolled in ROTC programs in Texas if they agree to accept a commission in the Texas National or Air 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 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 or to institutions. Since room and board charges are not state revenues and cannot be exempted, the bill provides for exempted room and board charges to be paid to institutions from appropriations made by the legislature. Room and board reimbursements are estimated to range from approximately $296,000 in FY96 to $346,000 in FY2000. 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 $45,000 per year, increasing as local tuition increased. Estimates of state expenses for foregone tuition and fees at public senior colleges and universities range from $125,000 in FY96 to $183,000 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 (Foregone Tuition Plus Room and Board) 1996 $420,975 1997 445,350 1998 471,375 1999 499,350 2000 529,425 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