LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 27, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1545 by Uher (Relating to the operation, regulation,
and administration of public institutions of higher
education.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1545, As Introduced: negative impact of $(283,966,000) 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 $(283,966,000) *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from General Revenue from New Higher Education Fund *
* Fund-Dedicated, Higher outside Treasury *
* Education Institution *
* 0001 *
* 2002 $(283,966,000) $283,966,000 *
* 2003 0 0 *
* 2004 0 0 *
* 2005 0 0 *
* 2006 0 0 *
***************************************************************************
Fiscal Analysis
The bill would exempt higher education institutions (institutions) from
several State regulations or requirements.
Institutions would be exempted from purchasing regulations, except rules
regarding historically underutilized businesses, and could purchase goods
or services by the method that provides the best value.
Institutions would be exempted from statutes regarding Texas Correctional
Industries and inmate labor.
Institutions would be exempted from regulations regarding leave and
holidays. Leave provisions for employees at institutions could be
amended to allow institutions to combine vacation leave, sick leave and
holidays. Institutions would be required to enter into a memorandum of
understanding with the Teacher Retirement System of Texas, the Employees
Retirement System of Texas, and the Texas Higher Education Coordinating
Board concerning awards of accrued leave or other related issues.
The bill authorizes institutions to grant merit salary increases,
including one-time merit payments.
The bill authorizes institutions to pay employees with multiple
appointments for working more than 40 hours a week in lieu of
compensatory time.
The bill authorizes institutions to employ a person who has retired from
state government.
The bill allows institutions to notify employees by use of electronic
media.
The bill authorizes institutions to pay employees for the accrued balance
of the employee's vacation time, even if the employee is re-employed by
the state within 30 days of separation.
The bill authorizes institutions to reduce employees salary for parking
and would eliminate the provision that these funds be used only for
employee parking facilities. In addition, the bill allows institutions
to reduce employees' salary for club memberships, recreational sport
membership or similar programs.
The bill authorizes institutions to exempt full-time employees from
tuition and fees.
The bill authorizes institutions to prorate refunds and exemptions of
tuition and fees.
Institutions would be exempted from depositing tuition, laboratory and
special course fees in the state treasury.
This bill would simplify reporting requirements for institutions, and it
would eliminate the requirement that certain institutions secure the
opinion of the Attorney General on the conveyance of title of any real
property given to those institutions.
Institutions would be exempted from strategic planning requirements.
This bill authorizes institutions to charge a credit card user a
processing fee.
Methodology
Article 1 of this bill would partially implement recommendation ED-4 from
the Comptroller's report, e-Texas: Smaller, Smarter, Faster Government.
This portion of the bill would simplify and deregulate the procurement
process at institutions of higher education. Although institutions could
save money under the bill's provisions, it is assumed any funds saved
through greater efficiencies would be retained by the institutions for
use elsewhere, resulting in no significant fiscal impact on the State.
The provisions of the bill addressing leave, merit salary increases, and
hiring retirees could have an effect on the budgets of institutions of
higher education, as well as on the State's retirement systems.
Additional information from the institutions is needed to determine the
potential cost for these provisions.
The provision that allows institutions to exempt employees from some or
all of tuition or fees could result in a loss of tuition income or
dedicated general revenue accounts. It is assumed that the general
revenue would be needed to reimburse institutions for the loss of tuition
income. Additional information from the institutions is needed to
determine the potential cost. Institutions could also realize a
reduction in non-appropriated tuition revenue. However, these amounts
would not impact State appropriations.
Simplifying reporting requirements of universities could reduce
administrative costs. It is assumed that any funds saved through greater
efficiencies would be retained by the institutions for use elsewhere,
resulting in no significant fiscal impact on the State.
The provisions of the bill that would allow institutions to retain
control of tuition and fees would have a negative effect on general
revenue. In estimating the potential loss, the Comptroller's Office
assumed that institutions would receive an appropriation in fiscal year
2002 from their existing dedicated general revenue account balances on
hand at the close of fiscal year 2002. There would be a corresponding
gain to the local funds of the institutions.
Allowing institutions of higher education to charge a convenience fee to
students using a credit card to pay for tuition, fees and other charges
would increase revenues to the institutions. However, these fees would
be auxiliary in nature and would not impact State appropriations.
Local Government Impact
General revenue would not be used to offset the loss of tuition and fee
revenue for employees at community colleges, resulting in a potential
revenue reduction for community colleges.
Source Agencies: 781 Texas Higher Education Coordinating Board, 304
Comptroller of Public Accounts
LBB Staff: JK, CT, DB