LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 7, 1997 TO: Honorable Irma Rangel, Chair IN RE: Senate Bill No. 1907, As Engrossed Committee on Higher Education By: Bivins House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1907 ( Relating to tuition and fees charged by public institutions of higher education, including the redesignation of certain fees as tuition.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1907-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 amend the Education Code to allow the governing boards of institutions to set tuition rates within specified ranges. The bill would exclude tuition above the minimum level from educational and general funds and would require that it is not accounted for in determining an institution's general revenue appropriation. The bill would redesignate the general use fee as tuition. The bill would increase the tuition at a law school from $75 per semester credit hour to $100 per semester credit hour. The bill would allow governing boards to set graduate tuition rates equal to the minimum undergraduate rate but no more than 1.5 times the maximum undergraduate rate. The bill would allow the governing board of universities to set undergraduate resident tuition for the 1997-98 academic year between $34 and $68 per semester credit hour; between $36 and $72 per semester credit hour for the 1998-99 academic year; between $38 and $76 per semester credit hour for the 1999-2000 academic year; and between $40 and $80 per semester credit hour for the 2000-2001 academic year. The bill would authorize a governing board to waive fees under certain circumstances including for students enrolled only in distance learning courses and for students that cannot reasonably be expected to use the services, provided that waiver of the fees will still enable the institution to provide the service or facility and meet any debt obligations. The bill would authorize governing boards to fix and collect rentals, rates, and charges from students and other for use of facilities. This revenue could be used towards paying bonds. The bill would modify the range for Texas Public Education Grants set aside to not less than nine percent to not more than 15 percent of resident tuition. The change to tuition would take effect for the 1997 fall semester. Methodolgy Because the bill would maintain the current minimum charges for tuition and would designate any amounts over the minimum as institutional funds that are not to be accounted for in the appropriations process, there would be no impact on general revenue funding to institutions. Because the bill reclassifies the general use fee as tuition but does not authorize an increase in the total tuition that an institution could charge as compared to the amount that an institution could previously have charged for tuition and fees, there would be no impact on the amount of institutional funds for institutions of higher education. The bill would increase the amount of tuition charged at a law school by $25 per semester credit hour. The semester credit hours during the base period for law totaled 109,465. The increase in Other Educational and General Income (Other E&G) amounts are shown in the table below. This increase in Other E&G would result in a redistribution of general revenue from the law schools under the all funds methodology. The institutions with law schools are UT Austin, University of Houston, Texas Southern University, and Texas Tech University. It is assumed that the fee waivers for distance learning courses and for students that cannot use the facility or services would not have a significant fiscal impact on the institutions. 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 Gain/(Loss) from Other Educational and General Income/ GR-Dedicated 8022 1998 $2,736,625 1998 2,736,625 2000 2,736,625 2001 2,736,625 2002 2,736,625 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 0 2000 0 2001 0 2002 0 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 ,LD