LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 1, 1997
TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 2456
Committee on Higher Education By: Swinford
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2456 ( Relating
to state funding for and tuition charged to certain undergraduate
students who accumulate excessive credit hours and to the number
of credit hours required in a degree program.) this office has
detemined the following:
Biennial Net Impact to General Revenue Funds by HB2456-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 amend the Education Code to require
the Texas Higher Education Coordinating Board (THECB) to exclude,
for formula funding purposes, the semester credit hours of resident
undergraduate students that had already earned 170 hours. The
bill would authorize certain exemptions. The bill would only
apply to a funding formula established under Section 61.059
of the Education Code after September 1, 1997.
The bill would
allow the institutions to charge an increased tuition, without
exceeding the out-of-state tuition rate, for students who had
earned 170 or more credit hours. The tuition increase for
excessive undergraduate hours would be effective with tuition
charged for the 1999 Fall semester.
The bill would limit
the credit hour requirements for bachelor degree programs to
120 but would allow THECB to grant permission to institutions
to increase the credit hour requirements for programs based
on certain criteria. Limiting the credit hour requirements
would not affect undergraduate degree programs in existence
on January 1, 1997 until September 1, 2002.
The bill would
require THECB to maintain an up-to-date inventory of prerequisites
for programs offered at each higher education institution other
than junior colleges.
Fiscal Analysis
The bill would partially implement Texas Performance Review
(TPR) recommendation ED11 in Disturbing the Peace: The Challenge
of Change in Texas Government. Eliminating formula funding
for undergraduate credit hours in excess of 170 hours would
result in general revenue funds for the state.
Methodolgy
The Texas Performance Review sampled 10 percent of the semester
credit hours in excess of 170 taken by undergraduate seniors
during one year to estimate the semester credit hours in excess
of 170 taken by all undergraduates. These hours were adjusted
to reflect the exemptions provided by the bill. Then, current
funding formulas based on semester credit hours were identified.
The rates for liberal arts, the most conservative formula rates,
were applied to the total excessive hours, and total savings
from all funds from eliminating formula funding for excessive
credit hours were calculated. This amount was adjusted to reflect
only the general revenue portion of the savings, or $4.64 million
in savings each year as indicated in the table below.
Using
estimates provided by the Coordinating Board, savings associated
with this bill could range up to $15.6 million each 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:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from General
Revenue Fund
0001
1998 $0
1998 0
2000 4,640,000
2001 4,640,000
2002 4,640,000
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 4,640,000
2001 4,640,000
2002 4,640,000
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
304 Comptroller of Public Accounts
LBB Staff: JK ,LP ,LD