LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 20, 2001 TO: Honorable Irma Rangel, Chair, House Committee on Higher Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB1403 by Noriega (Relating to the eligibility of certain persons to qualify as residents of this state for purposes of higher education tuition.), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1403, Committee Report 1st House, Substituted: positive impact * * of $0 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $0 * * 2003 0 * * 2004 (17,441,491) * * 2005 (20,866,124) * * 2006 (22,151,243) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *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 $882,620 * * 2003 0 1,506,857 * * 2004 (17,441,491) 1,963,456 * * 2005 (20,866,124) 2,305,683 * * 2006 (22,151,243) 2,370,983 * *************************************************************************** Fiscal Analysis The bill define students who graduate from Texas high schools while living in the state with their parent, guardian or conservator as Texas residents for tuition and fee purposes, regardless of the citizenship or immigration status of the student. The student must reside in the state for at least one year between the first day the person attended a public or private high school in the state and the date the person graduated from such a high school or received the equivalent of a high school diploma. The bill permits a resident alien with an unexpired visa or an alien who has petitioned for lawful status under federal immigration law to be a Texas resident for tuition and fee purposes. Finally, the bill would exempt Mexican citizens from non-resident tuition and fee rates in any general academic teaching institution, public junior college or Texas State Technical College System component (institutions) located in a county within 100 miles of the border or in a county having a population of 100,000 or more. The current statute authorizes Mexican students to pay in-state tuition and fees at certain schools near the border, when financial need of the student is established. Methodology This fiscal note assumes that the provision which requires that the waivers would only apply to students who register as entering students on or after the 2001 fall semester applies to all three provisions. Based on analysis prepared by the Texas Higher Education Coordinating Board (THECB), extending residency status to students who graduate from Texas high schools while living in the state with their parents would increase the number of students attending public institutions by 2,392 in fiscal year 2002. It is assumed that 70% of these students would attend community colleges and that 30% would attend universities. It is also assumed that the retention rates for these students would be 70%. Resident tuition paid by new students who would not have otherwise attended universities is estimated to be $811,340 in fiscal year 2002 and $1,378,600 in fiscal year 2003. Universities would also realize an increase in non-appropriated tuition revenue. However, these amounts would not impact State appropriations. Since appropriations for formula amounts are based on historical enrollment, additional formula costs for new students would not be incurred until fiscal year 2004. The additional General Revenue formula costs for new students at both universities and community colleges is estimated to be $14,462,676 in fiscal year 2004 and $16,730,478 in fiscal year 2005. Based on analysis by THECB, the provision of the bill that allows certain aliens to qualify for residency for tuition and fee purposes would not have a significant fiscal impact to the state, because this provision is closely related to the new policy changes already in effect. Based on THECB analysis, extending foreign student tuition waivers for Mexican Nationals to all institutions would increase the number of students attending public institutions by 412 in fiscal year 2002 . Resident tuition paid by new students who would not have otherwise attended universities is estimated to be $71,280 in fiscal year 2002 and $128,257 in fiscal year 2003. Universities would also realize a reduction in non-appropriated tuition revenue. However, these amounts would not impact State appropriations. Since appropriations for formula amounts are based on historical enrollment, additional formula costs for new students would not be incurred until for fiscal year 2004. The additional General Revenue formula costs for new students at both universities and community colleges is estimated to be $2,978,815 in fiscal year 2004 and $4,135,646 in fiscal year 2005. Local Government Impact Community colleges would also receive additional tuition revenue from new students attending the institutions who would not otherwise have attended. Source Agencies: LBB Staff: JK, CT, PF, DB