LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 8, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1839 by Junell (Relating to research and excellence
funding at certain institutions of higher education.), As
Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1839, As Engrossed: negative impact of $(33,774,000) 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. *
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General Revenue-Related Funds, Five-Year Net Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(15,337,000) *
* 2003 (18,437,000) *
* 2004 (22,438,000) *
* 2005 (26,820,000) *
* 2006 (31,618,000) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Savings/(Cost) *
* Gain/(Loss) Gain/(Loss) Gain/(Loss) from General *
* from New Higher from Permanent from New Revenue Fund *
* Education Fund Higher University 0001 *
* outside Education Fund Research Fund *
* Treasury - 0346 *
* Texas *
* Excellence Fund *
* 2002 $15,337,000 $(16,794,000) $15,337,000 $(15,337,000) *
* 2003 18,437,000 (21,784,000) 18,437,000 (18,437,000) *
* 2004 22,438,000 (28,235,000) 22,438,000 (22,438,000) *
* 2005 26,820,000 (35,715,000) 26,820,000 (26,820,000) *
* 2006 31,618,000 (44,361,000) 31,618,000 (31,618,000) *
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Fiscal Analysis
The bill would amend Chapter 62 of the Education Code to create two new
funds, the Texas Excellence Fund and University Research Fund. The Texas
Excellence Fund (TEF) and University Research Fund (URF) would promote
research and provide excellence funds for certain comprehensive research
universities as defined by the bill.
The bill creates the TEF outside the state Treasury in the custody of the
Comptroller who would be responsible for administering and investing the
fund. A portion of the annual $50 million deposit from general revenue
to the Permanent Higher Education Fund (PHEF) will instead be deposited
into the TEF. That portion is in an amount equal to the percentage of
total return on investment assets of the permanent tobacco fund times the
total return of the PHEF. The remaining amount is deposited to the
Permanent Higher Education Fund.
The bill would also create the URF outside the state Treasury in the
custody of the Comptroller. In each fiscal year the bill would require
the Legislature to appropriate or provide an amount into the URF equal
to the amount deposited in the Texas Excellence Fund in that fiscal
year.
Methodology
The estimate is based on the Comptroller's projections which assume a
return of 4.5% for the Texas Excellence Fund consistent with the
anticipated return on the Permanent Fund for Tobacco Education and
Enforcement as provided by the bill. The cost to General Revenue to
provide the same level of funding for the University Research Fund and
the gain to the URF would be equal to the amount deposited to the credit
of the TEF. However, losses to the Permanent Higher Education Fund
would be greater than the gains to the TEF due to lost investment
revenues that would not be earned each year on the cumulative amounts of
deposits made to the TEF instead of the Permanent Higher Education Fund.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, SD, DC