LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 12, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB51 by Chavez (Relating to tuition and fee exemptions
for the children of certain professional instructional
employees enrolled at a public institution of higher
education.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB51, As Introduced: negative impact of $(27,028,204) through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (27,028,204) *
* 2004 (11,760,710) *
* 2005 (12,734,970) *
* 2006 (13,375,198) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year General Revenue Fund from Estimated Other *
* 0001 Educational and General Income *
* Account/ GR-Dedicated *
* 0770 *
* 2002 $0 $0 *
* 2003 (27,028,204) (27,028,204) *
* 2004 (11,760,710) (11,760,710) *
* 2005 (12,734,970) (12,734,970) *
* 2006 (13,375,198) (13,375,198) *
***************************************************************************
Fiscal Analysis
The bill provides an exemption from undergraduate tuition, or tuition and
fees at public higher education institutions for children of
professional instructional employees in public schools. The exemption
for tuition would be applicable to children of instructional employees
with 10 years of service and those whose parents with 15 years of service
would receive an exemption from both tuition and fees.
The bill also allows higher education institutions to adopt a policy
providing students, who became eligible to receive an exemption from
tuition or tuition and fees to receive a refund for the amount of tuition
or tuition and fees paid during the preceding three years.
The bill would take effect beginning with the fall semester in 2002
(fiscal year 2003).
Methodology
The Texas Higher Education Coordinating Board (THECB) estimates that
6,233 students would be eligible for tuition exemptions only. Of this
number, 55%, or 3,428, are assumed to attend universities; the remaining
45%, or 2,805, would attend community colleges. THECB estimated that
12,653 students would be eligible for both tuition and fee exemptions.
Again, 55%, or 6,959, are assumed to attend universities and 45%, or
5,964, would attend community colleges.
THECB estimated that the tuition exemptions would reduce university
tuition revenues $10.8 million beginning in fiscal year 2003, increasing
by 8% a each year to $13.4 million in fiscal year 2006. An equivalent
amount of general revenue funds would be needed to reimburse universities
for the loss of this revenue.
In addition to tuition and fee exemptions, it is assumed that all
students who become eligible for the refund of tuition and fees would
request the refund in fiscal year 2003. Based on analysis prepared for
similar legislation introduced in previous sessions, it is estimated
that refunds to university students would equal 150% of tuition and fee
exemptions for fiscal year 2003 or $16.2 million.
Universities would also realize a reduction in non-appropriated tuition
revenue. However, these amounts would not impact state appropriations.
Local Government Impact
General revenue would not be used to offset the loss of tuition and fee
revenue at community colleges, resulting in a revenue reduction of $6.8
million in fiscal year 2003, increasing to $8 million in fiscal year
2006. It is assumed that all students who become eligible for the
refund of tuition and fees would request the refund in fiscal year 2003.
It is estimated that refunds to community college students would equal
50% of tuition and fee exemptions for fiscal year 2003, or $3.4 million
Source Agencies: 781 Texas Higher Education Coordinating Board, 701
Texas Education Agency, 304 Comptroller of Public
Accounts
LBB Staff: JK, CT, PF, DB