LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 12, 1997
         
         
      TO: Honorable Irma Rangel, Chair            IN RE:  Senate Bill No. 961, As Engrossed
          Committee on Higher Education                              By: Ratliff
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB961 ( Relating 
to state formula funding to an institution of higher education 
and tuition costs for certain resident doctoral students.) this 
office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB961-As Engrossed
         
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.
         
 
Fiscal Analysis
 
The bill would allow formula funding for doctoral students for 
only the first 100 semester credit hours instead of the current 
131 semester credit hours and would allow the Coordinating Board 
to provide certain exceptions.  The governing board of an institution 
of higher education would be allowed to charge a resident doctoral 
student nonresident tuition for semester credit hours in excess 
of 100.  The change in the formulas would take effect for the 
formulas for FY2000.
 
Methodolgy
 
Based on the effective dates in the bill, there would be no 
fiscal impact for the 1998-99 biennium.

Lowering the cap 
on doctoral hours from 131 semester credit hours to 100 semester 
credit hours would reduce the Texas Higher Education Coordinating 
Board's formula recommendations by $25 million.  It is estimated 
that the formulas are funded at approximately 88 percent.  Seventy-four 
percent of the 88 percent is funded from general revenue.  Based 
on that level of funding the formulas, the estimated savings 
to the General Revenue Fund beginning in FY2000 is $8.14 million. 
 These amounts are shown in the tables below.  To the extent, 
that institutions charged the higher nonresident tuition for 
hours above the 100 semester credit hour cap, other educational 
and general income would increase but based on provisions in 
the bill this increase would not offset general revenue.
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         8,140,000                                                                        
       2001         8,140,000                                                                        
       2002         8,140,000                                                                        
 
 
         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            8,140,000
               2001            8,140,000
               2002            8,140,000
 
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
                                         
                      LBB Staff:   JK ,LP ,LD