LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 17, 1997
         
         
      TO: Honorable Irma Rangel, Chair            IN RE:  House Bill No. 589
          Committee on Higher Education                              By: Rangel
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB589 ( Relating 
to the indemnification of certain employees of certain institutions 
of higher education for admissions activities.) this office 
has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB589-As Introduced
         
Implementing the provisions of the bill would result in a net 
impact of $0 to General Revenue Related Funds through the biennium 
ending August 31, 1999.
         
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 indemnify certain employees of 
certain institutions of higher education for actual damages, 
court costs and attorney's fees for conduct involving their 
decision on admission of an individual to a general academic 
teaching institution or to a medical or dental unit. The state 
would be liable only if the employee acted in the course and 
scope of the employee's job, in good faith, and in accordance 
with a written policy of the institution or unit.  

The legislation 
would also create a General Revenue Dedicated "indemnity account" 
under the Education Code for payment of such amounts.  The account 
would be created by assessing a $1 fee from every enrolled student. 
 This account would have no impact on appropriations to institutions 
of higher education.

This legislation would take effect September 
1, 1997 and apply only to actions filed with a court on or after 
that date.

Fiscal Analysis

Indemnification for this type 
of liability is already available under Tex. Civ. Pract. & Rem. 
Code, Section 104.002 but is limited to $100,000 per person 
and $300,000 per occurrence by Section 104.003.   The new section 
does not contain dollar amount limitations on state liability. 
 It cannot be determined whether a court would apply the dollar 
amount limitations currently in Section 104.003 to the indemnification 
which would be provided by this bill.

Methodology

The 
proposed $1 fee is multiplied by the estimated enrollment to 
calculate the gain to the indemnity account.  The estimated 
gain to the indemnity account is $811,000 in 1998, increasing 
to $840,000 in 2002.

Funds in the account would be used to 
pay claims under this bill.  In the event that claims exceed 
the balances of the account, the claims would be payable out 
of the appropriation in the General Appropriations Act for judgments 
and settlements of Chapter 104 claims.  The Comptroller of Public 
Accounts would reimburse the General Revenue Fund from the institution's 
funds for such amounts paid out of the General Revenue Fund.

         
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   781   Higher Education Coordinating Board
                                         302   Office of the Attorney General
                                         304   Comptroller of Public Accounts
                                         720   University of Texas System Administration
                                         758   Texas State University System
                      LBB Staff:   JK ,LP ,LD ,KVO