LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 26, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2323 by Gallego (Relating to repayment assistance for
certain law school loans of persons providing legal
services to the indigent.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2323, As Introduced: negative impact of $(1,425,780) 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:
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* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(752,890) *
* 2003 (672,890) *
* 2004 (672,890) *
* 2005 (672,890) *
* 2006 (672,890) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Change in Number of *
* Year Savings/(Cost) from Savings/(Cost) from State Employees from *
* General Revenue Fund General Revenue Fund FY 2001 *
* for Loan Repayments for Administrative *
* 0001 Costs *
* 0001 *
* 2002 $(560,000) $(192,890) 2.0 *
* 2003 (560,000) (112,890) 2.0 *
* 2004 (560,000) (112,890) 2.0 *
* 2005 (560,000) (112,890) 2.0 *
* 2006 (560,000) (112,890) 2.0 *
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Technology Impact
Programming would be required for processing applications and vouchers,
an accounting system, a system for monitoring education loan debt and
holders of education loan notes, a system for tracking of attorneys
working for non-profit organizations serving indigents, an imaging
system, and a telecommunications system.
Fiscal Analysis
This bill creates a loan repayment program for lawyers practicing law at
non-profit organizations providing legal assistance to indigents in both
criminal and civil matters. Loan repayment assistance would not exceed
50 percent of an attorney's outstanding law school debt and attorneys
would not receive payments for more than 10 years.
Methodology
According to information from the State Bar of Texas, 349 attorneys work
for non-profit organizations providing legal services to the indigent.
Nationwide, attorneys have an average education loan debt of $80,000.
The Texas Higher Education Coordinating Board (THECB) assumes 80 percent,
or 279 of these attorneys have an average education loan debt of
$80,000. The bill would provide repayment for 50 percent of this amount,
or $40,000. It is assumed that half of these attorneys, approximately
140, will be retained by non-profit organizations providing legal
services to the indigent. Based on this methodology, the payment made to
each of these 140 attorneys would be $4,000 per year for a total cost of
$560,000 per year in loan repayments over a ten-year period. Further,
it is assumed that attrition, recruitment, and retention of lawyers
working in non-profit organizations will keep the number of attorneys
participating in the program at 140.
The THECB also estimates that administrative costs for the program would
be $192,890 in the first year which includes $50,000 for programming
services, $30,000 for equipment, $75,816 in salaries for two part-time
and one full-time employee and $37,074 for other administrative
expenses. Annual administrative expenses in the next five years would
be $112,890
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 781 Texas Higher Education Coordinating Board
LBB Staff: JK, CT, DB, KC