| TO: | Honorable Dan Branch, Chair, House Committee on Higher Education |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | SB215 by Birdwell (relating to the continuation and functions of the Texas Higher Education Coordinating Board, including related changes to the status and functions of the Texas Guaranteed Student Loan Corporation.), Committee Report 2nd House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2014 | ($352,867) |
| 2015 | ($312,867) |
| 2016 | ($312,867) |
| 2017 | ($312,867) |
| 2018 | ($312,867) |
| Fiscal Year | Probable Savings/(Cost) from General Revenue Fund 1 |
|---|---|
| 2014 | ($352,867) |
| 2015 | ($312,867) |
| 2016 | ($312,867) |
| 2017 | ($312,867) |
| 2018 | ($312,867) |
| Fiscal Year | Change in Number of State Employees from FY 2013 |
|---|---|
| 2014 | 4.0 |
| 2015 | 4.0 |
| 2016 | 4.0 |
| 2017 | 4.0 |
| 2018 | 4.0 |
The Texas Higher Education Coordinating Board (Coordinating Board) is subject to the Sunset Act and will be abolished on September 1, 2013 unless continued by the Legislature. The bill contains the following provisions.
Requires the Coordinating Board to provide opportunities for public comment at each board meeting.
Requires one-third of the members of the Coordinating Board to have experience in the field of higher education.
Requires the Coordinating Board to adopt rules for its use of advisory committees, ensuring the committees meet standard structure and operating criteria, and report recommendations directly to the board.
Requires the Coordinating Board to strengthen its internal controls for allocating financial aid funding and ensure stakeholder input by adopting allocation methodologies in rule.
Redefines the Coordinating Board's powers and duties in statute to reflect the major functions of a higher education coordinating entity, including repealing outdated subsections of the Education Code and moves other subsections to new sections of law.
Combines long-range planning requirements for higher education in statute.
Updates the Coordinating Board's statute to define its academic program approval authority in one section of law.
Eliminates 19 unfunded programs from statute.
Eliminates certain reporting requirements.
Requires the Coordinating Board to periodically re-evaluate the ongoing need for all existing data requests it imposes on higher education institutions through rule or policy.
Provides for the Coordinating Board to administer pilot projects to identify best practices only in circumstances where other entities cannot or will not administer the programs.
Removes all two-year institutions from participation in the B-On-Time loan program.
Requires the Coordinating Board to engage affected institutions of higher education in the negotiated rulemaking process under Chapter 2008, Government Code under certain conditions, including if the development of a policy, procedure or rule is likely to be controversial or not later than the 15th day after the date notice of a potential policy, procedure, or rule is provied to the affected institutions, in the Texas Register or otherwise, at least one-half of the affected institutions request negotiated rulemaking and agree to share the costs of the process, including those of the facilitator. Under provisions of the bill, the Coordinating Board would determine the sharing of costs. The negotiated rulemaking sections of the bill would expire September 1, 2017.
Requires the Coordinating Board, in consultation with affected stakeholders, to establish a risk-based, agency-wide compliance monitoring function. In developing the risk-based approach, the Coordinating Board would be required to prioritize seven factors relating to an institution of higher education. Two factors include the amount of student financial assistance or grant funds allocated to the institution and whether the data reported by the institution is used for determining funding allocations. Under provisions of the bill, if the Coordinating Board determines through its compliance monitoring that an institution of higher education has included errors in the institution's data reported for formula funding, the Board, for a public junior college, may adjust the appropriations made to the college for a fiscal year as necessary to account for the correced data. If the error is for a general academic teaching institution, a medical and dental unity, or a public technical institute, the Coordinating Board shall calculate a revised appropriation amount and report this information to the Legislative Budget Board and governor for consideration as the basis for budget execution or other appropriate action, and to the comptroller. The Coordinating Board would be required to train compliance monitoring staff to ensure the staff has the ability to monitor both funds compliance and data reporting accuracy.
Requires the Coordinating Board to establish and administer a pilot program at selected postsecondary educational institutions to improve student loan default rates and finacial aid literacy among postsecondary students. The board would select at least one institution from several categories of postsecondary educational institutions to participate in the program. In selecting institutions, the board shall give priority to those that have a student loan default rate of more than 20 percent or a negative trend in the institution's three-year student loan default rate. The board shall adopt rules for the administration of the pilot program and may contract with one or more entities to administer the pilot program. Not later than January 1 of each year, beginning in 2016, the board shall submit a report to the governor, the lieutenant governor and the speaker of the house of representatives regarding the outcomes of the pilot program, as reflected in the federal student loan default rates reported for the participating institutions.
Requires the Board to establish and publish the allocation methodologies and develop procedures to verify the accuracy of the application of those allocation methodologies by board staff for any funds trusteed to the board for allocation to institutions of higher education, including financial aid program funds.
Continues the Texas Higher Education Coordinating Board for 12 years.
The bill would amend various sections of the Education Code as it relates to the the Texas Guaranteed Student Loan Corporation, including converting the corporation from a public nonprofit corporation to a nonprofit corporation under Chapter 22, Business Organization Code. The bill would also transfer duties of the corporation to the Coordinating Board.
The bill would combine the Norman Hackerman Advanced Research Program and the Advanced Technology Program.
Although the bill modifies eligibility requirements for the B-On-Time Program in regards to two year institutions participating in the program, based on information included in the Sunset Commission Report, B-On-Time amounts disbursed to students attending two year institutions was not significant compared to state appropriations for the program. Therefore any impact on general revenue funds tied to this provision is not considered significant to the state.
Under provisions of the bill, there is a mechanism for the Coordinating Board to share costs associated with the negotiated rulemaking process with institutions of higher education. Therefore costs associated with the negotiated rulemaking section of the bill are not considered significant and will be absorbed within current resources. The remaining provisions under the bill would be implemented within existing resources except for the new compliance function.
The Sunset Commission has estimated that the new compliance monitoring function would require the hiring of four additional FTEs. These FTES include the hiring of one Auditor V at a cost for salaries and wages of $69,552, one Auditor IV at a cost of $60,750, one Auditor III at a cost of $53,061 and one Auditor II at a cost of $45,454 per year. Employee benefits associated with these four FTEs is estimated to be $68,050. The Sunset Commission also estimated travel costs associated with conducting audits at institutions would be $16,000 per year which would cover 10 audit trips per year, at a cost of $400 per trip, or $4,000 per auditor. The total cost of of $312,867 per year is reflected in the tables above.
| Source Agencies: | 116 Sunset Advisory Commission, 360 State Office of Administrative Hearings, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration
|
| LBB Staff: | UP, GO, KK, SK
|