LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 6, 2001
  
  
          TO:  Honorable Dale B. Tillery, Chair, House Committee on
               Pensions & Investments
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3510  by Gutierrez (Relating to the coverage of certain
               adjunct faculty members of certain institutions of higher
               education under the Texas Employees Uniform Group
               Insurance Benefits Act.), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3510, As Introduced:  negative impact of $(18,383,702) 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                         $(8,754,374)  *
          *       2003                          (9,629,328)  *
          *       2004                         (10,592,261)  *
          *       2005                         (11,651,487)  *
          *       2006                         (12,816,636)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year      Probable Savings/(Cost) from      *
         *                      General Revenue Fund          *
         *                              0001                  *
         *      2002                             $(8,754,374) *
         *      2003                              (9,629,328) *
         *      2004                             (10,592,261) *
         *      2005                             (11,651,487) *
         *      2006                             (12,816,636) *
         *****************************************************
  
Fiscal Analysis
  
This bill makes adjunct faculty members at public community and junior
colleges eligible to receive coverage under the Texas Employees Uniform
Group Insurance Benefits Act.  Eligible adjunct faculty are faculty
members who teach six or more semester credit hours per semester or
term, and who have been employed as a faculty member of the same public
community or junior college for the preceding five years.  Based on
current policy, the state would pay for 100% of the cost of
employee-only coverage and 50% of dependent coverage.
  
  
Methodology
  
This bill would impact an estimated 2,417 faculty members.  The per
employee state contribution to the Uniform Group Insurance Program in
fiscal year 2002 is estimated to be $3,622, for a total cost of
$8,754,374.  The state's contribution in fiscal year 2003 is projected
to be $3,984, for a total cost of $9,629,328.  For the following years,
it is assumed that insurance costs will increase 10% each year.
  
  
Local Government Impact
  
To the extent that community and junior colleges are currently providing
some level of health insurance coverage to their adjunct faculty
members, those institutions would realize a savings.
  
  
Source Agencies:   701   Texas Education Agency, 327   Employees
                   Retirement System, 781   Texas Higher Education
                   Coordinating Board
LBB Staff:         JK, RB, SC, JW