TC C.S.S.B. 1907 75(R) BILL ANALYSIS HIGHER EDUCATION C.S.S.B. 1907 By: Bivins (Swinford) 5-16-97 Committee Report (Substituted) BACKGROUND Prior to last session, Texas universities were allowed to charge all students a "building use fee" not to exceed $12 per semester credit hour (SCH). Last session, a bill passed allowing universities to raise this "use fee" up to an amount equal to tuition charged to resident undergraduate students. The result is that the fee is no longer a "building use fee," but a "tuition fee." Consequently public universities are allowed to spend the same fee for the same broad purposes as tuition. By redesignating the "building use fee" as tuition, institutions will be required to identify "building use fees" and others like it, as tuition fees. This bill, known as the "truth-in-tuition legislation," does not authorize universities to increase tuition and fees beyond what is presently stated in statutes. PURPOSE C.S.S.B. 1907 requires certain fees charged to students by universities to be redesignated as tuition, and protects bonds issued under the previous building use fee. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS ARTICLE 1. TUITION AND FEES SECTION 1.01. Amends Subchapter B, Chapter 54, Education Code, by adding Section 54.0513 to read as follows: Sec. 54.0513. REDESIGNATION OF BUILDING USE FEE. (a) Redesignates the building use fee, authorized in Section 55.16, as tuition. (b) Authorizes the governing board of an institution of higher education (board) to charge, as tuition under this chapter, the following maximum amounts: (1) $34 per SCH for the 1997-1998 academic year; (2) $36 per SCH for the 1998-1999 academic year; (3) $38 per SCH for the 1999-2000 academic year; (4) $40 per SCH for the 2000-2001 academic year and each academic year thereafter. (c) States that amounts collected by an institution of higher education (institution) are institutional funds as defined by Section 51.009 and requires these to be accounted for as designated funds. Prohibits these funds from being accounted for in a general appropriations act in such a way as to reduce the general revenue appropriation to a particular institution. (d) Authorizes a board to waive all or part of the tuition charged to a student under this section if the payment would cause an undue economic hardship on the student. (e) States that Section 56.033 requiring certain percentage amounts of tuition to be set aside for grants and scholarships does not apply to tuition collected under this section. (f) Authorizes a board to continue to charge as tuition the amount that it charged as the building use fee at the institution in the 1996-97 academic year without a public hearing, but may not increase tuition above that amount without holding a public hearing. SECTION 1.02. Amends Subsection (i), Section 54.051, Education Code, to read as follows: (i) Sets tuition for a resident student at a law school at $80 per SCH, rather than $75 per SCH. States that tuition for a nonresident student registered at a law school is the same as the amount charged to a nonresident graduate student under Sections 54.008 and 54.051(d) of this code, rather than placing a cap of $200 per SCH. SECTION 1.03. Amends Subchapter D, Chapter 54, Education Code, by adding Section 54.214, to read as follows: Sec. 54.214. DISTANCE LEARNING OR OFF-CAMPUS COURSES. Authorizes a board to waive certain fees if the board determines that: (1) a student is enrolled only in distance learning courses or other off-campus courses; (2) the student cannot reasonably be expected to use the activities, services, or facilities on which the fee is based; and (3) the waiver will not materially impair the ability of the institution either to service any debt on which the fee is based or to offer or operate the particular activity, service, or facility supported by the fee. SECTION 1.04. Amends Section 55.01, by amending Subdivision (3) and adding Subdivision (4) as follows: (3) Redefines "revenue funds" to include grants and other funds from any public or private source. (4) Defines "bonds." SECTION 1.05. Amends Section 55.16, Education Code, to read as follows: Sec. 55.16. BOARD RESPONSIBILITY. (a) Requires that any charges constituting revenue funds be levied and collected when and to the extent required by the resolution authorizing the issuance of the bonds in any amount required to provide revenue funds sufficient for the payment of the principal of and interest on the bonds, regardless of any other provision or limitation provided by this title. Makes conforming changes throughout the section to change references from fees to read "revenue funds." Defines revenue funds to be any necessary fees, tuition, rentals, rates, or other charges. Deletes provisions relating to the student use fee. (b) States that a board is not required to charge students enrolled in different degree programs at the institution the same rentals, rates, charges, and fees under this section. Deletes provisions relating to building use fee (rentals, rates, charges, or fee). SECTION 1.06. Repeals Subsection (d), Section 55.17, Education Code. ARTICLE 2. CONFORMING AMENDMENTS. SECTION 2.01. Amends Section 55.24, Education Code, to read as follows: Sec. 55.24. PLEDGES UNDER PREVIOUS LAWS TO REMAIN IN EFFECT. (a) States that the repeal of a law by the enactment of Title 3 of this code should not affect any pledge or covenant with respect to bonds or notes, or any bonds issued to refund the same, where the revenues, or other incomes of a board have been pledge to the payment of principal of and interest on any bonds or notes issued and delivered by any other law. Requires that all pledges and covenants remain in force in accordance with the terms and provisions thereof. (b) States that the repeal or amendment of any provision of this title should not affect any pledge or covenant with respect to such bonds, notes, or obligations or any bonds or notes issued to refund the same, where all or any part of the revenue funds of any board have been pledge to payment of the principal of and interest on any bonds or notes or any other obligation issued or entered into and delivered pursuant to any provision of this title or any other law. Requires that all pledges and covenants remain in effect accordance with the terms and provisions thereof. (c) Requires that outstanding obligations secured by various liens on the tuition or a portion of the tuition charged and collected at certain institutions shall be set aside to satisfy obligations of each board. Also provides for tuition constituting the educational and general funds shall never be less than the amount charged for the 1996-1997 academic year. SECTION 2.02. Amends Chapter 55, Education Code, by adding Section 55.25 to read as follows: Sec. 55.25. APPLICABILITY OF OTHER LAW; CONFLICTS. Provides that Articles 717q, 717k-2, 717k-6, and 717 k-8, V.T.C.S., apply to all bonds issued pursuant to this chapter; provided, however, that in the event of any conflict between those laws and this chapter, the provisions of this chapter prevail. ARTICLE 3. VALIDATION, SAVINGS, AND TRANSITIONAL PROVISION; EFFECTIVE DATE; EMERGENCY SECTION 3.01.(a) States that all revenue bonds approved by the attorney general and registered by the comptroller, or authorized by proceedings approved by the attorney general from this date forward, which were issued, sold, and delivered or entered into by any board, and which are payable from or secured by a pledge of any assets or resources of the board, are valid in all respects, along with all proceedings authorizing the issuance thereof. Makes valid those bonds and proceedings and binding obligations in accordance with their terms and conditions for all purposes, as though they had been issued and authorized originally. (b) States that nothing in this Act limits or impairs any pledge or covenant made by a board with respect to any bond or note issued before the effective date of this Act. (c) States that the provisions of Subsection (b), Section 55.24, Education Code, as added by Section 2.01 of this Act, regarding the effect of an amendment or a repeal on a pledge or covenant made by a board apply to any amendment or repeal made by this Act. SECTION 3.02. (a) Effective date: August 1, 1997, if this Act may take effect on this date under Section 39, Article III, Texas Constitution. Otherwise, this Act takes effect September 1, 1997. (b) States that the changes in law made by this Act apply beginning with tuition and fees charged for the 1997 fall semester. SECTION 3.03. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substantial differences between the substitute and the original are that the substitute has the same intent and purpose but achieves it through much simpler terms. The substitute deletes various SECTIONS in the original measure that amended every current tuition law, adds a new SECTION 1.01 that achieve the same purpose as SECTIONS 1.01-1.06 in the original measure, and removes SECTIONS 2.01 and 2.02 of the original measure that were not necessary to achieve the intent of the bill. C.S.S.B. 1907 deletes SECTION 1.01 which amended Sec. 54.004. RETENTION AND USE OF FUNDS. C.S.S.B. 1907 deletes SECTION 1.02, subsections (a), (e), (f) and (i) and moves subsection (g) and (h) to SECTION 1.01, subsections (d) and (f) respectively of the substitute. C.S.S.B. 1907 deletes SECTION 1.03 and moves SECTION 1.04 to SECTION 1.02 and adds language stating that nonresident tuition at law schools is equal to any other nonresident graduate student. C.S.S.B. 1907 achieves the same intent in SECTION 1.01 as SECTION 1.05 of the original measure and deletes SECTION 1.06 and 1.07. C.S.S.B. 1907 moves SECTION 1.07, Sec. 54.215 relating to distance learning and off-campus courses to SECTION 1.03, Sec. 54.214 of the substitute. C.S.S.B. 1907 also defines "revenue funds" and "bonds" as provided in SECTION 1.08 of the original measure, however instead of adding the word "money" it adds "grants" and instead of adding "from any source" it adds "from any public or private source." C.S.S.B. 1907 deletes additional language from Sec.55.16 (current law) relating to the governing boards' authorization and moves it from SECTION 1.09 to SECTION 1.05. C.S.S.B. 1907 deletes SECTION 1.10 relating to funds set aside for Texas Public Educational Grants and instead states in SECTION 1.01, Sec.54.0513 (e) that the redesignated tuition does not apply to the funds set aside for Sec. 56.033. C.S.S.B. 1907 deletes SECTION 2.01 and 2.02 of Article 2 and reorders sections accordingly. Section 3.01 (d) of Article 3 is deleted by the C.S.S.B. 1907.