LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 8, 1997 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 2809 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 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-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(10,178,895) 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 board of regents of the Texas A&M University System, the University of North Texas and Texas Tech University to establish and maintain a school for the teaching and training of podiatry students, podiatry technicians and other technicians in the practice of podiatry. Methodolgy This analysis assumes that one school of podiatry would be established and that it would enroll 50 new 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 $19.7 million for the period from 1999 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 1999. 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 1998. In 1999, 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 2002, 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 Revenue Change in Number Gain/(Loss) from of State General Revenue Employees from Fund FY 1997 0001 1998 ($9,000,000) 0.0 1998 (1,178,895) 12.0 2000 (3,231,130) 44.0 2001 (5,347,222) 92.0 2002 (6,770,276) 114.0 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 ($9,000,000) 1999 (1,178,895) 2000 (3,231,130) 2001 (5,347,222) 2002 (6,770,276) 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: 710 Texas A&M University System 739 Texas Tech University Health Sciences Center 733 Texas Tech University 781 Higher Education Coordinating Board LBB Staff: JK ,LP ,CF