LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 7, 2001 TO: Honorable Teel Bivins, Chair, Senate Committee on Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB2766 by Delisi (Relating to repayment assistance for certain education loans owed by certain state attorneys.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2766, As Engrossed: negative impact of $(1,546,000) 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 $(798,000) * * 2003 (748,000) * * 2004 (748,000) * * 2005 (748,000) * * 2006 (748,000) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Revenue Savings/ Revenue Savings/ Number of * * Gain/(Loss) (Cost) from Gain/(Loss) (Cost) from State * * from General from New New General Employees * * Estimated Revenue General Revenue from FY 2001 * * Other Fund Revenue Dedicated * * Educational 0001 Dedicated for Loan * * and General for Loan Repayment * * Income Repayment Program * * Account/ Program * * GR- * * Dedicated * * 0770 * * 2002 $(84,856) $(798,000) $798,000 $(798,000) 0.5 * * 2003 (84,856) (748,000) 748,000 (748,000) 0.5 * * 2004 (84,856) (748,000) 748,000 (748,000) 0.5 * * 2005 (84,856) (748,000) 748,000 (748,000) 0.5 * * 2006 (84,856) (748,000) 748,000 (748,000) 0.5 * *********************************************************************** Fiscal Analysis This bill would amend the Education Code and the Tax Code to establish a program, administered by the Texas Higher Education Coordinating Board, to assist certain attorneys in repayment of student loans. An attorney would be eligible for a maximum of five years assistance if the attorney: made an application to the board, was currently employed as an attorney by the Office of the Attorney General, and had at least one year employment as such. The assistance, which would be provided in the form of grants, could be used to repay qualified loans undertaken for an accredited undergraduate and law school education. This bill would redirect 1 percent of the tuition revenue charged to resident students, enrolled in state school of law, to the program. The redirected tuition revenue would be transferred to the Comptroller for deposit in the State Treasury and dedicated to the program. This bill would take effect September 1, 2001. Agency rules would be adopted no later than December 1, 2001. Methodology Based on analysis by the Office of the Attorney General, 120 attorneys at the Office of the Attorney General would be eligible for repayment grants. Assuming that grants of $6,000 per year were offered for each attorney, the cost of repayment grants would be $720,000 each year. It is assumed that grants would be made to new attorneys as current attorneys draw down the maximum amount. The Texas Higher Education Coordinating Board estimates administrative costs for the program of $78,000 for fiscal year 2002 and $28,000 each year thereafter. Based on the Texas Higher Education Coordinating Board Fiscal Activities Report, the total law school tuition for 2001 was $11,314,135. It is estimated that 75% of total law school tuition or $8,485,601 is paid by resident students. One percent or $84,856 would be transferred to the new general revenue dedicated amount. Since this tuition is currently included in formula appropriations for general academics, it is assumed that general revenue would be provided for the reduction in tuition revenue. It is also assumed that the remaining costs would be provided from general revenue funds and these amounts would be transferred to the new general revenue dedicated account. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 781 Texas Higher Education Coordinating Board LBB Staff: JK, CT, PF, DB