LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 11, 1999 TO: Honorable Irma Rangel, Chair, House Committee on Higher Education FROM: John Keel, Director, Legislative Budget Board IN RE: SB1288 by Zaffirini (Relating to the establishment and operation of a campus extension of The University of Texas Health Science Center at San Antonio), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1288, As Engrossed: negative impact of $(16,000,000) through * * the biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(8,000,000) * * 2001 (8,000,000) * * 2002 (8,000,000) * * 2003 (8,000,000) * * 2004 (8,000,000) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Change in Number of State * * Year General Revenue Fund Employees from FY 1999 * * 0001 * * 2000 $(8,000,000) 14.0 * * 2001 (8,000,000) 60.0 * * 2002 (8,000,000) 85.0 * * 2003 (8,000,000) 85.0 * * 2004 (8,000,000) 85.0 * *************************************************************************** Technology Impact The extension center may require an audio-visual connection to the main campus in San Antonio. Fiscal Analysis The bill would establish a campus extension (extension) of the University of Texas Health Science Center at San Antonio (University) in the city of Laredo. The bill authorizes the extension under two conditions: public or private entities would offer sufficient land in Laredo to construct the extension, and would fund the construction of the extension's administration building. The University of Texas System board of regents (Board) shall report to the Texas Higher Education Coordinating Board (THECB) if the conditions have been satisfied by December 1, 1999. The University would manage the extension and would pay for the extension's operating costs from the University's operating funds, or from other available funds of any public or private entity. The extension would be used to provide undergraduate and graduate medical and dental education and other levels of health education in collaboration with Texas A&M International University or any component institutions of the Texas A&M University System or The University of Texas System. The physical facilities used for teaching and research may be provided by a public or private entity. A facility may be constructed, maintained or operated with state money appropriated for that purpose. A teaching hospital may also be provided by a public or private entity and constructed, or maintained with state funds. THECB will prepare an impact statement for the Board by January 1. 2000. Methodology This analysis assumes the conditions of establishing the extension have been met by public and private entities in Laredo. The University has assumed that construction of teaching and research facilities would be $12 million, $8 million from general revenue and $4 million from gifts. It has estimated construction costs of $7 million in 2000 and $1 million in 2001. The University has estimated $686,000 for 14 new employees in 2000 and $3 million for 60 new employees in 2001. Operating costs include travel, employee benefits and program support resources and services and are estimated to be $314,000 in 2000 and $4 million in 2001. The University has estimated that personnel and operating costs would continue to increase through 2004 and new FTEs would cap at 85 in 2002 for the five-year period. Costs associated with the construction and operation of a teaching hospital were not included in the University's estimate. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 781 Higher Education Coordinating Board, 720 The University of Texas System Administration LBB Staff: JK, CT