Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026	$0
2027	$0
2028	$0
2029	$0
2030	$0
2031	$0
2032	($13,548,000)
2033	($13,548,000)
2034	($13,548,000)
2035	($13,548,000)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Probable Savings/(Cost) from Institutional Funds 8888	Probable Revenue Gain from Est Bd Authorized Tuition Inc 704	Probable Savings/(Cost) from Est Bd Authorized Tuition Inc 704
2026	$0	$0	$0	$0
2027	$0	$0	$0	$0
2028	$0	$0	$0	$0
2029	$0	$0	$0	$0
2030	$0	$0	$0	$0
2031	$0	($2,649,578)	$0	$0
2032	($13,548,000)	($4,348,687)	$105,000	($105,000)
2033	($13,548,000)	($5,503,209)	$202,500	($202,500)
2034	($13,548,000)	($6,604,217)	$300,000	($300,000)
2035	($13,548,000)	($6,604,217)	$300,000	($300,000)

Fiscal Year	Probable Revenue Gain from Est Oth Educ & Gen Inco 770	Probable (Cost) from Est Oth Educ & Gen Inco 770
2026	$0	$0
2027	$0	$0
2028	$0	$0
2029	$0	$0
2030	$0	$0
2031	$0	$0
2032	$168,000	($168,000)
2033	$324,000	($324,000)
2034	$480,000	($480,000)
2035	$480,000	($480,000)

Fiscal Year	Change in Number of State Employees from FY 2025
2026	0.0
2027	0.0
2028	0.0
2029	0.0
2030	0.0
2031	5.5
2032	15.0
2033	23.0
2034	31.0
2035	31.0

The bill would authorize the establishment of a public law school in the Rio Grande Valley. The bill would require the governing board of a university system that intends to establish a school of law to notify the Higher Education Coordinating Board and require the Board to prepare a feasibility study to determine actions the university system must take to obtain accreditation of the law school. The bill would prohibit state funds from being appropriated for such a law school for a state fiscal biennium ending on or before August 31, 2031.

For purposes of this fiscal note, it is assumed the law school would be established at The University of Texas Rio Grande Valley within The University of Texas System (System) and that general revenue costs associated with the law school would begin in fiscal year 2032. The System indicates that Institutional Funds, which are not appropriated in the General Appropriations Act and not a cost to the State, would be used to support faculty and other costs associated with the law school and General Revenue would be used for debt service costs associated with construction of the law school building.

The System indicates that it would need to hire 5.5 FTEs in fiscal year 2031, including a dean, support staff, and faculty members, for an estimated cost of $1,107,578 for salaries and benefits. There would also be approximately $1,542,000 for operating expenses, including one-time costs associated with obtaining accreditation from the American Bar Association and costs associated with the library collection. In fiscal year 2032, they would anticipate increasing to 15.0 FTEs for an estimated cost of $2,696,841 in salaries and benefits, $651,846 for operating expenses, and $1.0 million associated with the library collection. There would be increases in faculty and administrative staff in the future years reaching 31 FTEs in fiscal year 2035 as the school grows in enrollment. All of these costs would be funded with Institutional Funds.

The University of Texas System estimates that the new law school building would cost $155.4 million. It is assumed that bonds for the law school building would be issued on September 1, 2031, at a 6.0 percent interest rate with a 20-year level debt service amortization. The amount of debt service payments would be $13.5 million per year, beginning in fiscal year 2032.

While Institutional Funds and General Revenue funding would be the primary source of financing for the law school, board authorized tuition (Fund 704) and statutory tuition (Fund 770) will also be used to support the operation of the law school. In fiscal year 2032, it is estimated 70 students would enroll in the first class of the law school. These students would generate approximately $105,000 in board authorized tuition and $168,000 in statutory tuition. The revenue from board authorized tuition and statutory tuition would increase as an additional 65 students are added per year. While formula funding is not estimated as part of this analysis, the law school could receive formula funding beginning in fiscal year 2034 based on expected enrollment starting in Fall 2032.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 28, 2025

TO:	Honorable Terry M. Wilson, Chair, House Committee on Higher Education

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2088 by Martinez (Relating to the establishment of a public law school in the Rio Grande Valley.), As Introduced