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: HB2356 by Tillery (Relating to the deposit of a portion
of royalties received by institutions of higher education
from intellectual property to the credit of the general
revenue fund.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2356, As Introduced: positive impact of $2,232,183 through the *
* biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $1,014,629 *
* 2003 1,217,554 *
* 2004 1,461,065 *
* 2005 1,753,278 *
* 2006 2,103,934 *
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All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund *
* 0001 *
* 2002 $1,014,629 *
* 2003 1,217,554 *
* 2004 1,461,065 *
* 2005 1,753,278 *
* 2006 2,103,934 *
*****************************************************
Fiscal Analysis
This bill requires institutions of higher education to transfer 25
percent of net royalties received each fiscal year from the sale,
licensing, or use of intellectual property derived or created from the
efforts of the faculty, research fellows, or others to the credit of the
general revenue fund.
Private institutions of higher education as well as public institutions
of higher education would be required to contribute a portion of their
net royalties from intellectual property to the general revenue funds.
If the institution does not comply, the students at that college or
university may not receive any type of student grants.
Methodology
The Texas Higher Education Coordinating Board (THECB) reports the
following gross royalty income for Texas Public Universities and
Health-Related Institutions by fiscal year:
1997 - $13,876,120
1998 - $17,027,668
1999 - $20,696,725
2000 - $28,184,125
The average growth for the fiscal years 1997 to 2000 was 26.2 percent.
We assumed that a 20 percent growth rate continued through the fiscal
year 2006, which would result in the following gross royalty income
amounts:
2001 - $33,820,950
2002 - $40,585,140
2003 - $48,702,168
2004 - $58,442,602
2005 - $70,131,122
2006 - $84,157,347
It is assumed that net income is ten percent of gross income. Therefore
the following would be the estimated income that would be returned to
General Revenue:
2002 - $1,014,629
2003 - $1,217,554
2004 - $1,461,065
2005 - $1,753,278
2006 - $2,103,934
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 781 Texas Higher Education Coordinating Board, 783
University of Houston System Administration
LBB Staff: JK, CT, DB, HM