LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 27, 2001 TO: Honorable Irma Rangel, Chair, House Committee on Higher Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB2766 by Delisi (Relating to repayment of certain law school education loans.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2766, As Introduced: negative impact of $(3,676,322) 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 $(1,860,411) * * 2003 (1,815,911) * * 2004 (1,101,911) * * 2005 (1,107,911) * * 2006 (1,114,911) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Revenue Revenue Savings/ Number of * * (Cost) from Gain/(Loss) Gain/(Loss) (Cost) from State * * General from from New New General Employees * * Revenue General General Revenue from FY 2001 * * Fund for Revenue Revenue Dedicated * * Administra- Fund Dedicated for Loan * * tive Cost 0001 Repayments * * and Pilot * * Project * * 0001 * * 2002 $(818,411) $1,042,000 1.5 * * $(1,042,000) $(1,042,000) * * 2003 (766,911) (1,049,000) 1,049,000 (1,049,000) 1.5 * * 2004 (46,911) (1,055,000) 1,055,000 (1,055,000) 1.5 * * 2005 (46,911) (1,061,000) 1,061,000 (1,061,000) 1.5 * * 2006 (46,911) (1,068,000) 1,068,000 (1,068,000) 1.5 * *********************************************************************** Technology Impact Programming would be required for: systems to process applications and vouchers; for a system to track participants and make loan payments; for an accounting system; for a system to monitor education loan debt and holders of education loan notes; for a system to track lawyers employed by state agencies; for an imaging system; and for a telecommunications system. Fiscal Analysis The bill creates an education loan repayment program to be administered by the Higher Education Coordinating Board (THECB) to provide repayment of education loans incurred during undergraduate and professional education for lawyers, who practice law for any Texas state agency. Lawyers would be eligible to receive loan repayment for up to five years. In addition, the bill would create a dedicated account in the General Revenue Fund - Lawyer Student Loan Repayments - and require 10 percent of the Attorney Occupation Tax to be deposited to the credit of this account for the sole purpose of repayment of student loans of lawyers. Methodology According to the Office of the Attorney General, there are currently 120 attorneys in their office who would qualify for student loan repayment assistance grants in a pilot program. If grants of $6,000 per year were provided for 120 attorneys the annual cost of the pilot project would be $720,000. The THECB estimates that administrative costs for the program would be $98,411 in fiscal year 2002 and $46,911 annually each year thereafter. The Comptroller's Office estimates that the amounts to be transferred from the undedicated portion of General Revenue to the dedicated portion would be $1,042,000 in fiscal year 2002, $1,049,000 in fiscal year 2003, $1,055,000 in fiscal year 2004, $1,061,000 in fiscal year 2005, and $1,068,000 in fiscal year 2006. The full amount of the fund is assumed to be distributed for loan repayments each year. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 200 Supreme Court, 304 Comptroller of Public Accounts, 781 Texas Higher Education Coordinating Board, 302 Office of the Attorney General LBB Staff: JK, CT, DB, KC