LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 1, 1997 TO: Honorable Bill Ratliff, Chair IN RE: House Bill No. 621, As Engrossed Committee on Finance By: Jackson Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB621 ( relating to the establishment of the Texas Chiropractic College as a public institution of higher education) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB621-As Engrossed No fiscal implication to the State is anticipated. 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 authorize the transfer of the Texas Chiropractic College to a public university system, if the Coordinating Board determines a compelling need or state interest. Both the Texas Chiropractic College and the university system must agree to the transfer. Fiscal Analysis If the Coordinating Board recommends the transfer of the Texas Chiropractic College to a university system and both the university system and the Texas Chiropractic College agrees, all land, building, facilities, improvements, equipment, supplies or property would be transferred to the university system. Also any contract or written obligations, and any funds dedicated to or held for the use and benefit of the Texas Chiropractic College would be transferred to the university system for the use of the college. The bill would classify employees of the Texas Chiropractic College on the date of the transfer as new employees of the university system for purposes of employee benefits. However, employees could maintain their year of service for the purpose of accruing annual leave. The bill would also require the tuition rate charged by the Texas Chiropractic College on January 1, 1997, to remain in effect following the transfer. Methodology It is assumed that the college would not be formula funded and that their total budget as a state institution would be the same as their current total budget, except for additional costs for state employee benefits and the tuition set aside for Texas Public Education Grants. It is assumed that enrollment would remain stable. Enrollment for spring 1996 was 538 students. Current tuition and fees are $13,200 per academic year. Therefore, the institution would generate approximately $7,100,000 in tuition and fees. It is assumed that clinic revenues and interest income would remain at the fiscal year 1996 amounts of $533,000 and $175,000, respectively. Total revenue is estimated to be $7,808,000. The fiscal year 1996 expenditures were $6.6 million. It is estimated that an additional $710,000 would be used for Texas Public Education Grants. Staff benefit costs are estimated to increase $115,000. Therefore, total expenditures are estimated to be $7,425,000. Since the college's revenue would exceed the expenditures, no fiscal impact to the state is anticipated. In addition, the state currently funds the study of chiropractic at Texas Chiropractic College through Texas Equalization Grants. In fiscal year 1996, the college received 422 awards for a total of $473,140. Texas Chiropractic College students would no longer be able eligible for these grants and these funds would become available for additional students at other private institutions. 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 LBB Staff: JK ,RR ,LP ,DB