LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session Revision 1 March 20, 2001 TO: Honorable Irma Rangel, Chair, House Committee on Higher Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB2276 by Giddings (Relating to tuition rebate incentives for persons who complete certain degree and certificate programs without excessive credit hours.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2276, As Introduced: 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. * ************************************************************************** This note is revised based on corrected data provided by the Texas Higher Education Coordinating Board. General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $0 * * 2003 0 * * 2004 95,164 * * 2005 0 * * 2006 60,110 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year General Revenue Fund General Revenue Fund * * 0001 0001 * * 2002 $0 $0 * * 2003 0 0 * * 2004 (1,131,500) 1,226,664 * * 2005 0 0 * * 2006 (1,292,500) 1,352,610 * *************************************************************************** Fiscal Analysis The bill extends the state's current tuition rebate program to students efficiently completing a 60-hour degree at community colleges. If a community college student efficiently completes a degree or certificate requiring at least 60 hours' college work in no more than three hours beyond the basic requirements of the degree or certificate, he/she will receive a $500 tuition rebate. The bill provides for general revenue reimbursement of rebates paid from local funds during the subsequent appropriation. Under this provision, there would be no impact to general revenue until appropriations are made for fiscal year 2004. Methodology In fiscal year 2000, roughly 41,000 associates degrees and certificates were awarded by Texas community and technical colleges. Certificates accounted for 16,000 of the degrees awarded. Because the certificates require fewer than 60 hours for completion, such recipients would not qualify for the rebate. Of the remaining 25,000 associate degree recipients, all of their programs require at least 60 hours. The Texas Higher Education Coordinating Board (THECB) estimates that five percent of these students would qualify for rebates and this number would increase by five percent per year. This estimation results in the following projections of rebates granted and paid by local institutions. Fiscal Year Rebates Local Cost 2002 1,250 $625,000 2003 1,313 $656,500 2004 1,378 $689,000 2005 1,447 $723,500 2006 1,519 $759,500 The cost of rebates would be offset by reductions in the number of courses taken by students desiring to qualify for the rebates. THECB estimates the related savings of $1,226,664 in formula funding for fiscal year 2004 and $1,352,610 in formula funding for fiscal year 2006. Since the bill reimburses local institutions from appropriations at the beginning of the biennium, the net costs to general revenue would be $1,131,500 in fiscal year 2004 and $1,292,500 in fiscal year 2006. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 781 Texas Higher Education Coordinating Board LBB Staff: JK, CT, PF, DB