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