LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 28, 1997 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 2809, Committee Report 1st House, Substituted Committee on Higher Education By: Edwards House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2809 ( Relating to the authority of certain institutions of higher education to establish and maintain podiatry schools.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2809-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net negative impact of $(9,000,000) 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. Fiscal Analysis The bill would authorize the Texas Higher Education Coordinating Board to determine the need and interest for a Podiatry School by August 31, 1998. If the Coordinating Board determines that a need and interest exist, it would select a governing board of a university system to establish and maintain a school for the teaching and training of podiatry students, podiatry technicians and other technicians in the practice of podiatry by September 1, 1998. Methodolgy This analysis assumes that the cost of the needs assessment would be absorbed by the Coordinating Board. It also assumes that a school of podiatry would be established and that it would enroll 50 new Doctor of Podiatry students per year until it reached a maximum enrollment of 200 students. A Doctor of Podiatry degree requires four years of training: two years of basic medical sciences and two years of clinical work. Total operating costs are expected to be $11.7 million for the period from 2000 through 2002. It is assumed that the tuition and fees would be similar to the tuition charged for the Doctor of Optometry program at $7,500 per year. A portion of that income would be set aside for Texas Public Education Grants and the remainder would be used to offset the operating costs of the institution. The first students would enroll at the beginning of fiscal 2000. In addition to operating costs, the Texas Higher Education Coordinating Board estimates that the new school would require $9 million in renovation, construction and equipment expenditures before students could be admitted. Based on these assumptions, $9 million is estimated for capital expenditures in fiscal year 1999. In 2000, first-year operating costs are estimated to have a net impact on general revenue of $1.17 million. Operating costs would increase in each successive year as new students matriculate through the school until 2003, when the school would reach enrollment capacity. 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 Change in Number Savings/(Cost) of State from General Employees from Revenue Fund FY 1997 0001 1998 $0 0.0 1998 (9,000,000) 0.0 2000 (1,178,895) 12.0 2001 (3,231,130) 44.0 2002 (5,347,222) 92.0 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 (9,000,000) 2000 (1,178,895) 2001 (3,231,130) 2002 (5,347,222) 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: LBB Staff: JK ,LP ,CF