LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 7, 1997
         
         
      TO: Honorable Irma Rangel, Chair            IN RE:  House Bill No. 621, Committee Report 1st House, Substituted
          Committee on Higher Education                              By: Jackson
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB621 ( Relating 
to the transfer of the Texas Chiropractic College to the Texas 
A&M University System.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB621-Committee Report 1st House, Substituted   FN Revision 1
         
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.
         
 
Methodolgy
 
  The fiscal year 1996 expenditures were $6.6 million. 

 
 It is assumed that $710,000 of the tuition would be set aside 
for Texas Public Education Grants.  It is also assumed that 
staff benefit costs would increase approximately $665,000 a 
year.
The probable fiscal implications of implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 

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 ,LP ,DB