LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 20, 2001
  
  
          TO:  Honorable Irma Rangel, Chair, House Committee on Higher
               Education
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1403  by Noriega (Relating to the eligibility of
               certain persons to qualify as residents of this state for
               purposes of higher education tuition.), Committee Report
               1st House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB1403, Committee Report 1st House, Substituted:  positive impact     *
*  of $0 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                                   $0  *
          *       2003                                    0  *
          *       2004                         (17,441,491)  *
          *       2005                         (20,866,124)  *
          *       2006                         (22,151,243)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***************************************************************************
*Fiscal    Probable Savings/(Cost) from    Probable Revenue Gain/(Loss)   *
* Year         General Revenue Fund            from Estimated Other       *
*                      0001               Educational and General Income  *
*                                             Account/ GR-Dedicated       *
*                                                      0770               *
*  2002                                $0                        $882,620 *
*  2003                                 0                       1,506,857 *
*  2004                      (17,441,491)                       1,963,456 *
*  2005                      (20,866,124)                       2,305,683 *
*  2006                      (22,151,243)                       2,370,983 *
***************************************************************************
  
Fiscal Analysis
  
The bill define students who graduate from Texas high schools while
living in the state with their parent, guardian or conservator as Texas
residents for tuition and fee purposes, regardless of the citizenship or
immigration status of the student. The student must reside in the state
for at least one year between the first day the person attended a public
or private high school in the state and the date the person graduated
from such a high school or received the equivalent of a high school
diploma.

The bill permits a resident alien with an unexpired visa or an alien who
has petitioned for lawful status under federal immigration law to be a
Texas resident for tuition and fee purposes.

Finally, the bill would exempt Mexican citizens from non-resident tuition
and fee rates in any general academic teaching institution, public
junior college or Texas State Technical College System component
(institutions) located in a county within 100 miles of the border or in
a county having a population of 100,000 or more.  The current statute
authorizes Mexican students to pay in-state tuition and fees at certain
schools near the border, when financial need of the student is
established.
  
  
Methodology
  
This fiscal note assumes that the provision which requires that the
waivers would only apply to students who register as entering students on
or after the 2001 fall semester applies to all three provisions.

Based on analysis prepared by the Texas Higher Education Coordinating
Board (THECB), extending residency status to students who graduate from
Texas high schools while living in the state with their parents would
increase the number of students attending public institutions by 2,392
in fiscal year 2002.  It is assumed that 70% of these students would
attend community colleges and that 30% would attend universities.  It is
also assumed that the retention rates for these students would be 70%.
Resident tuition paid by new students who would not have otherwise
attended universities is estimated to be $811,340 in fiscal year 2002 and
$1,378,600 in fiscal year 2003.  Universities would also realize an
increase in non-appropriated tuition revenue.  However, these amounts
would not impact State appropriations.  Since appropriations for formula
amounts are based on historical enrollment, additional formula costs for
new students would not be incurred until fiscal year 2004.  The
additional General Revenue formula costs for new students at both
universities and community colleges is estimated to be $14,462,676 in
fiscal year 2004 and $16,730,478 in fiscal year 2005.

Based on analysis by THECB, the provision of the bill that allows certain
aliens to qualify for residency for tuition and fee purposes would not
have a significant fiscal impact to the state, because this provision is
closely related to the new policy changes already in effect.

Based on THECB analysis, extending foreign student  tuition waivers for
Mexican Nationals to all institutions would increase the number of
students attending public institutions by 412  in fiscal year 2002 .
Resident tuition paid by new students who would not have otherwise
attended universities is estimated to be $71,280 in fiscal year 2002 and
$128,257 in fiscal year 2003.  Universities would also realize a
reduction in non-appropriated tuition revenue.  However, these amounts
would not impact State appropriations.  Since appropriations for formula
amounts are based on historical enrollment, additional formula costs for
new students would not be incurred until for fiscal year 2004.  The
additional General Revenue formula costs for new students at both
universities and community colleges is estimated to be $2,978,815 in
fiscal year 2004 and $4,135,646 in fiscal year 2005.
  
  
Local Government Impact
  
Community colleges would also receive additional tuition revenue from new
students attending the institutions who would not otherwise have
attended.
  
  
Source Agencies:   
LBB Staff:         JK, CT, PF, DB