LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION Revision 1 March 22, 2011 TO: Honorable Dan Branch, Chair, House Committee on Higher Education FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1000 by Branch (Relating to the distribution of money appropriated from the national research university fund and to one or more audits of the information necessary to establish eligibility for that distribution.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1000, As Introduced: a negative impact of ($365,592) through the biennium ending August 31, 2013.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
Revision 1
March 22, 2011
Revision 1
Revision 1
TO: Honorable Dan Branch, Chair, House Committee on Higher Education FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1000 by Branch (Relating to the distribution of money appropriated from the national research university fund and to one or more audits of the information necessary to establish eligibility for that distribution.), As Introduced
TO: Honorable Dan Branch, Chair, House Committee on Higher Education
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB1000 by Branch (Relating to the distribution of money appropriated from the national research university fund and to one or more audits of the information necessary to establish eligibility for that distribution.), As Introduced
Honorable Dan Branch, Chair, House Committee on Higher Education
Honorable Dan Branch, Chair, House Committee on Higher Education
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB1000 by Branch (Relating to the distribution of money appropriated from the national research university fund and to one or more audits of the information necessary to establish eligibility for that distribution.), As Introduced
HB1000 by Branch (Relating to the distribution of money appropriated from the national research university fund and to one or more audits of the information necessary to establish eligibility for that distribution.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1000, As Introduced: a negative impact of ($365,592) through the biennium ending August 31, 2013.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1000, As Introduced: a negative impact of ($365,592) through the biennium ending August 31, 2013.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 ($243,728) 2013 ($121,864) 2014 $0 2015 $0 2016 $0
2012 ($243,728)
2013 ($121,864)
2014 $0
2015 $0
2016 $0
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($243,728) 1.5 2013 ($121,864) 0.8 2014 $0 2015 $0 2016 $0
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($243,728) 1.5 2013 ($121,864) 0.8 2014 $0 2015 $0 2016 $0
2012 ($243,728) 1.5
2013 ($121,864) 0.8
2014 $0
2015 $0
2016 $0
Fiscal Analysis
The bill would amend Chapter 62 of the Education Code by specifying a new upper limit on annual distributions from the National Research University Fund (Fund 0214) and defining a new allocation formula methodology for those distributions. Currently, the Texas Constitution authorizes the Legislature to appropriate up to 7 percent of the average net market value of the investment assets of the fund, provided the 10-year purchasing power of the fund corpus is preserved. The bill would stipulate that the total amount appropriated from the fund for any state fiscal year could not exceed an amount equal to 4.5 percent of the average net market value of the investment assets of the fund for the 12 consecutive state fiscal quarters ending with the last quarter of the preceding state fiscal year, as determined by the Comptroller's Office.Appropriations from Fund 0214 to eligible institutions, under current law, are based on a formula adopted by the Legislature. The bill would stipulate a new distribution formula based on how many institutions had established eligibility for distributions from Fund 0214.The bill would stipulate that information submitted to the Higher Education Coordinating Board by institutions of higher education for purposes of establishing eligibility for appropriations from Fund 0214 would be subject to a mandatory audit by the State Auditor's Office.
The bill would amend Chapter 62 of the Education Code by specifying a new upper limit on annual distributions from the National Research University Fund (Fund 0214) and defining a new allocation formula methodology for those distributions.
Currently, the Texas Constitution authorizes the Legislature to appropriate up to 7 percent of the average net market value of the investment assets of the fund, provided the 10-year purchasing power of the fund corpus is preserved. The bill would stipulate that the total amount appropriated from the fund for any state fiscal year could not exceed an amount equal to 4.5 percent of the average net market value of the investment assets of the fund for the 12 consecutive state fiscal quarters ending with the last quarter of the preceding state fiscal year, as determined by the Comptroller's Office.Appropriations from Fund 0214 to eligible institutions, under current law, are based on a formula adopted by the Legislature. The bill would stipulate a new distribution formula based on how many institutions had established eligibility for distributions from Fund 0214.The bill would stipulate that information submitted to the Higher Education Coordinating Board by institutions of higher education for purposes of establishing eligibility for appropriations from Fund 0214 would be subject to a mandatory audit by the State Auditor's Office.
Methodology
The State Auditor's Office (SAO) assumes three audits of eligibility criteria submitted by institutions would be mandated by Subsection (c) of the bill. In Fiscal Year 2012 the SAO would audit the eligibility criteria submitted by Texas Tech University and the University of Houston. In Fiscal Year 2013 the SAO would audit a third potentially eligible institution's submitted data. The bill requires the SAO conduct additional audits for each new institution petitioning to be eligible to receive National Research University Fund (NRUF) proceeds. The SAO estimates the cost of auditing the eligibility data submitted by institutions seeking to particpate in NRUF allocations to be $121,864. The bill also authorizes the Higher Educaiton Coordinating Board to request subsequent audits by the SAO after an eligible institution begins receiving NRUF allocations. The SAO estimates the cost of a subsequent audit to be $121,864 for such subsequent audits. The SAO audit cost assumes a billing rate of $92 per hour, plus travel expenses.
The State Auditor's Office (SAO) assumes three audits of eligibility criteria submitted by institutions would be mandated by Subsection (c) of the bill. In Fiscal Year 2012 the SAO would audit the eligibility criteria submitted by Texas Tech University and the University of Houston. In Fiscal Year 2013 the SAO would audit a third potentially eligible institution's submitted data.
The bill requires the SAO conduct additional audits for each new institution petitioning to be eligible to receive National Research University Fund (NRUF) proceeds. The SAO estimates the cost of auditing the eligibility data submitted by institutions seeking to particpate in NRUF allocations to be $121,864.
The bill also authorizes the Higher Educaiton Coordinating Board to request subsequent audits by the SAO after an eligible institution begins receiving NRUF allocations. The SAO estimates the cost of a subsequent audit to be $121,864 for such subsequent audits.
The SAO audit cost assumes a billing rate of $92 per hour, plus travel expenses.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 781 Higher Education Coordinating Board, 308 State Auditor's Office
304 Comptroller of Public Accounts, 781 Higher Education Coordinating Board, 308 State Auditor's Office
LBB Staff: JOB, KK, JAW, RT
JOB, KK, JAW, RT