LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 3, 2001 TO: Honorable Irma Rangel, Chair, House Committee on Higher Education FROM: John Keel, Director, Legislative Budget Board IN RE: HB3027 by Dunnam (Relating to resident tuition for certain nonresident students with a parent residing in the state.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3027, As Introduced: negative impact of $(170,159) 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 $(118,558) * * 2003 (51,601) * * 2004 (312,198) * * 2005 (303,097) * * 2006 (308,013) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) * * Year General Revenue Fund from Estimated Other * * 0001 Educational and General Income * * Account/ GR-Dedicated * * 0770 * * 2002 $(118,558) $(118,558) * * 2003 (51,601) (51,601) * * 2004 (312,198) (9,580) * * 2005 (303,097) 14,652 * * 2006 (308,013) 36,373 * *************************************************************************** Fiscal Analysis The bill exempts certain non-resident students from non-resident tuition if one of the student's parents lives in the state, is a conservator and is not delinquent on child support. The tuition exemptions would become effective the first semester or term after the bill becomes effective. Methodology Based on analysis by the Texas Higher Education Coordinating Board (THECB), it is estimated that 45 university students would qualify for tuition exemptions. Of those one-half or 22 students would be currently enrolled. Of the remaining 23, 11 students would be new students who would not have otherwise attended a public university. The THECB estimates that 214 community college students would be eligible for the tuition exemptions. Of those students, one-half or 108 would be currently enrolled and the remaining 106 would be new students. One-half of the new students or 53 would be new students who would not have otherwise attended a community college. It is assumed that the retention rate for all students is 70%. The estimated loss of non-resident tuition is $130,988 in fiscal year 2002 and $73,353 in fiscal year 2003 for current students who become eligible for exemptions under this provision. This amount would be offset by resident tuition paid by new students who would not have otherwise attended universities is estimated to be $12,430 in fiscal year 2002 and $21,753 in fiscal year 2003. Universities would also realize an increase in non-appropriated tuition revenue. However, these amounts would not impact State appropriations. Since appropriations for formula amounts are based on historical enrollment, additional formula costs for new students would not be incurred until fiscal year 2004. The additional General Revenue formula costs for new students at both universities and community colleges is estimated to be $302,618 in fiscal year 2004 and $317,749 in fiscal year 2005. Local Government Impact Enrollment at community colleges would increase and community colleges would receive additional tuition revenue and formula funding for the increased enrollment. Source Agencies: 781 Texas Higher Education Coordinating Board LBB Staff: JK, CT, PF, DB