LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION

April 5, 2011

TO:	Honorable Judith Zaffirini, Chair, Senate Committee on Higher Education
FROM:	John S O'Brien, Director, Legislative Budget Board
IN RE:	SB1729 by Zaffirini (Relating to the Texas Science, Technology, Engineering, and Mathematics (T-STEM) Challenge Scholarship program.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB1729, As Introduced: a negative impact of ($2,800,000) through the biennium ending August 31, 2013.

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
2012	$0
2013	($2,800,000)
2014	($2,800,000)
2015	($2,800,000)
2016	($2,800,000)

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1
2012	$0
2013	($2,800,000)
2014	($2,800,000)
2015	($2,800,000)
2016	($2,800,000)

Fiscal Analysis

The bill creates the Texas Science, Technology, Engineering, and Mathematics Challenge Scholarship Program. The program would be administed by the Higher Education Coordinating Board. The bill establishes eligibility requirements for students and institutions. Under provisions of the bill, certain public and private two year institutions would enter into partnerships with businesses and industry to identify local employment needs in STEM fields and provide part-time employment for students enrolled in a STEM program. Under provisions of the bill , subject to available funding, the Higher Education Coordinating Board would award scholarships up to $100 million each biennium, with 50 percent of the amount awarded from state appropriations and 50 percent of the amount awarded from private matching funds.

Methodology

Although the bill specifies up to $50 million in state appropriations in each biennium could be used to support the program, the following information and assumptions were used to calculate an estimate of the cost associated with the program. The Higher Education Coordinating Board provided information that in fall 2010, there were 77 2-year college campuses that reported students with STEM majors. The STEM programs included academic and technical/technical preparation. There were 14,000 students enrolled in technical/technical preparation courses at 60 campuses and 17,000 students enrolled in the academic programs. For purposes of this fiscal note only the technical prepration students were considered. It is further assumed that when other requirements in the bill are taken into account, 2% percent of these students would receive a scholarship. For purposes of this fiscal note it is assumed the scholarship amount would be $2,000 which is comparable to the TEXAS Grant amount at a community college. This would result in a total cost of $5.6 million per year. Under provisions of the bill, businesses would provide a 50% match resulting in a state cost of $2.8 million per year. It is also assumed that a year would be needed to set up arrangements with businesses regarding the program, therefore costs associated with the new program would begin in fiscal year 2013.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

781 Higher Education Coordinating Board

LBB Staff:

JOB, KK, RT, GO