LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 30, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3469 by McClendon (Relating to establishing a medical
school at Prairie View A&M University.), Committee Report
1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3469, Committee Report 1st House, Substituted: negative impact *
* of $(500,000) 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 $(500,000) *
* 2003 0 *
* 2004 (1,495,000) *
* 2005 (9,849,299) *
* 2006 (12,091,799) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $(500,000) *
* 2003 0 *
* 2004 (1,495,000) *
* 2005 (9,849,299) *
* 2006 (12,091,799) *
*****************************************************
Technology Impact
Creation of a new medical school will require a significant investment in
technology, both for instructional and administrative purposes.
Fiscal Analysis
The bill establishes a medical school at Prairie View A&M University. The
Texas A&M University System Board of Regents (TAMU Board) may prescribe
courses leading to degrees customarily offered by medical schools and
adopt rules on the school's operation and enrollment. The TAMU Board may
provide training and teaching of medical students, medical technicians
and other technicians in the practice of medicine.
In the operation of the school, the TAMU Board may enter into affiliation
or coordinating agreements with other entities or institutions, and may
accept grants or gifts from public or private entities.
The TAMU Board shall develop a plan for establishing the school, take
necessary steps to establish it not later than January 1, 2007, and
begin admitting students not later than the fall semester of 2008.
Methodology
Based on analysis by the Texas Higher Education Coordinating Board
(THECB), it is assumed:
1) Implementation will be made with moderate costs and maximum use of
existing resources and in-kind contributions from clinical partners;
2) The medical school would offer no new health-related degree programs
other than the doctor of medicine degree in its first ten years of
operation;
(3) The medical technology degree program that is currently offered at
Prairie View A&M University would continue to be supported by funding
formulas for general academic institutions; and
(4) The medical school would require the construction of two new
buildings -- a medical library and a medical education building --located
on or adjacent to the Prairie View A&M University campus with land
purchased by the University and financed by tuition revenue bonds.
THECB estimates that the construction of 21,050 square foot library
building would cost $4.6 million and a 281,300 square foot medical
education building would cost $70.3 million. Facility space requirements
are based on existing medical facilities at Texas A&M University System
Health Science Center and other medical schools. Combined debt service
for the two buildings of $6,485,549 would be based on an assumed bond
rate of 6 percent per year, beginning in fiscal year 2005, for 20 years.
Both buildings would be completed and ready for occupancy in March 2008.
All other estimates of the number of full-time employees and of the costs
of personnel, equipment, instruction and other operating expenses are
based on the program development, timeline and expenditure histories of
the medical school at Texas A&M University System Health Science Center
and other medical schools in Texas.
THECB estimated that the TAMU Board would initially receive $500,000 in
2002 (with unexpended budget authority in 2003) to complete the
developmental plan. Start-up funds would increase as new personnel are
hired, the buildings are completed and equipped, library materials are
purchased, and each class of 65 students is admitted, beginning in fall
2008. The THECB estimates that the new school would require $1,495,000
in special item funding for 2004 and $3,363,750 in special item funding
(excluding debt service) for 2005.
Based on this timeline, the school would be eligible to start receiving
instruction and operations and infrastructure formula funding in 2010.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 715 Prairie View A&M University, 781 Texas Higher
Education Coordinating Board
LBB Staff: JK, CT, DB, HM