LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 16, 1997 TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 961 Committee on Finance By: Ratliff Senate 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 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. 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. 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. For the 1998-99 biennium, 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. 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 ,RR ,LD