LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 1, 2025 TO: Honorable Terry M. Wilson, Chair, House Committee on Higher Education FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2110 by VanDeaver (relating to public higher education.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB2110, Committee Report 1st House, Substituted: a positive impact of $13,465,906 through the biennium ending August 31, 2027. 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 toGeneral Revenue Related Funds2026$6,213,0822027$7,252,8242028$9,196,6282029$11,038,8882030$12,783,076All Funds, Five-Year Impact: Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 20252026$6,213,08219.02027$7,252,82414.52028$9,196,62813.02029$11,038,88813.02030$12,783,07613.0 Fiscal AnalysisThe bill would expand student eligibility for the Financial Aid for Swift Transfer (FAST) program from only students who were educationally disadvantaged at any time during the four school years preceding enrollment in a dual credit course to include students who were educationally disadvantaged in the school year in which the student enrolls in the dual credit course. The bill would clarify for purposes of eligibility that a student be enrolled in a grade level from 9 through 12, rather than high school, in a school district or charter school. The bill would require the Texas Education Agency (TEA) to make data related to the FAST program available to school districts and charter schools.The bill would exempt the Texas Higher Education Coordinating Board (THECB) from certain rulemaking procedures to adopt rules necessary to align the community college funding formulas with appropriations or other legislative action, authorize community colleges to receive formula funding for student transfers to private or independent four-year institutions of higher education, establish a methodology to determine a credential of value whose award to a student would earn community college formula funding, and require TEA, THECB, and the Texas Workforce Commission (TWC) to coordinate workforce development grant programs.The bill would require TWC to add additional fields to unemployment tax forms that employers must complete and have the data processed, stored, and checked for data quality as defined by the bill. Additionally, the bill would require TWC to project enhanced labor market projections based on industry and occupation that would be accessible to THECB.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 1, 2025
TO: Honorable Terry M. Wilson, Chair, House Committee on Higher Education FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2110 by VanDeaver (relating to public higher education.), Committee Report 1st House, Substituted
TO: Honorable Terry M. Wilson, Chair, House Committee on Higher Education
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB2110 by VanDeaver (relating to public higher education.), Committee Report 1st House, Substituted
Honorable Terry M. Wilson, Chair, House Committee on Higher Education
Honorable Terry M. Wilson, Chair, House Committee on Higher Education
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB2110 by VanDeaver (relating to public higher education.), Committee Report 1st House, Substituted
HB2110 by VanDeaver (relating to public higher education.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB2110, Committee Report 1st House, Substituted: a positive impact of $13,465,906 through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2110, Committee Report 1st House, Substituted: a positive impact of $13,465,906 through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
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:
2026 $6,213,082
2027 $7,252,824
2028 $9,196,628
2029 $11,038,888
2030 $12,783,076
All Funds, Five-Year Impact:
2026 $6,213,082 19.0
2027 $7,252,824 14.5
2028 $9,196,628 13.0
2029 $11,038,888 13.0
2030 $12,783,076 13.0
Fiscal Analysis
The bill would expand student eligibility for the Financial Aid for Swift Transfer (FAST) program from only students who were educationally disadvantaged at any time during the four school years preceding enrollment in a dual credit course to include students who were educationally disadvantaged in the school year in which the student enrolls in the dual credit course. The bill would clarify for purposes of eligibility that a student be enrolled in a grade level from 9 through 12, rather than high school, in a school district or charter school. The bill would require the Texas Education Agency (TEA) to make data related to the FAST program available to school districts and charter schools.The bill would exempt the Texas Higher Education Coordinating Board (THECB) from certain rulemaking procedures to adopt rules necessary to align the community college funding formulas with appropriations or other legislative action, authorize community colleges to receive formula funding for student transfers to private or independent four-year institutions of higher education, establish a methodology to determine a credential of value whose award to a student would earn community college formula funding, and require TEA, THECB, and the Texas Workforce Commission (TWC) to coordinate workforce development grant programs.The bill would require TWC to add additional fields to unemployment tax forms that employers must complete and have the data processed, stored, and checked for data quality as defined by the bill. Additionally, the bill would require TWC to project enhanced labor market projections based on industry and occupation that would be accessible to THECB.
The bill would exempt the Texas Higher Education Coordinating Board (THECB) from certain rulemaking procedures to adopt rules necessary to align the community college funding formulas with appropriations or other legislative action, authorize community colleges to receive formula funding for student transfers to private or independent four-year institutions of higher education, establish a methodology to determine a credential of value whose award to a student would earn community college formula funding, and require TEA, THECB, and the Texas Workforce Commission (TWC) to coordinate workforce development grant programs.
The bill would require TWC to add additional fields to unemployment tax forms that employers must complete and have the data processed, stored, and checked for data quality as defined by the bill. Additionally, the bill would require TWC to project enhanced labor market projections based on industry and occupation that would be accessible to THECB.
Methodology
The estimated costs related to the changes to student eligibility for the FAST program cannot be determined due to a lack of data on the number of students to whom these provisions of the bill would apply. THECB estimated the number of student transfers to private or independent four-year institutions of higher education that would receive community college formula funding by using a forecast model based on historical actual certified data from 2018 to 2024 and assuming the fiscal year 2025 funding weights and rates remain constant through fiscal year 2030. The forecasted weighted transfer outcomes are estimated to be 3,815 in fiscal year 2026 and 3,829 in fiscal year 2027 followed by an expected downward trend through fiscal year 2030. The total number of such weighted student transfer outcomes multiplied by the fiscal year 2025 transfer outcome funding rate of $3,500 would result in an estimated cost of $13,353,181 in fiscal year 2026 and $13,400,882 in fiscal year 2027.THECB would adopt rules to implement the bill's provisions defining a credential of value. For purposes of this analysis, THECB assumes rules, among others, establishing the statewide self-sustaining wage threshold equaling $30,000 and decreasing the time period within which an associate degree must lead to a positive return on investment from ten years to five years. To determine credentials that would no longer be eligible for funding, THECB matched credential data from fiscal year 2008 through fiscal year 2023 with nominal wage records collected by the TWC Unemployment Insurance program. Comparing the results of that determination to credentials awarded in fiscal year 2024, THECB found that 6,347 associate degrees awarded would no longer be eligible for funding. Assuming that estimate and the fiscal year 2025 funding rate of $3,500 remain constant through fiscal year 2030, THECB estimates $22,214,500 in associated savings each year from fiscal year 2026 through fiscal year 2030. Based on information provided by TWC, this estimate assumes the agency would require 19.0 additional full time equivalents (FTE) positions in fiscal year 2026, 14.5 FTEs in fiscal year 2027 and 13.0 FTEs in fiscal years 2028 through 2030 to implement the provisions of the bill, as follows:Two Program Specialist IV ($66,255 per year with estimated benefits of $18,830) that would only be needed in fiscal year 2026 to modify forms and procedures for enhanced wage reporting. Eight Account Examiner IV ($61,136 per year with estimated benefits of $17,659) positions would only be needed in fiscal years 2026 before reducing the examiners to five in fiscal year 2027 and maintaining only two examiners in fiscal years 2028 through 2030 to assist employers in preparing new enhanced wage reporting. A Manager IV ($91,836 per year with estimated benefits of $26,100) would be needed to store data and ensure the data is correctly coded by industry and occupation according to current federal standards. Two Research Specialist II ($58,288 per year with estimated benefits of $16,565) would be needed to develop an automated program to code submissions data from employers and supervise employees. Two Research and Statistics Technician II ($46,139 per year with estimated benefits of $13,113) would be needed for manual coding of submitted data. A Database Administrator IV ($113,278 per year with estimated benefits of $32,194) would be needed process data received from the Unemployment Insurance (UI) Tax System and to ensure the data remains in compliance with applicable state and federal laws. Three Economist III ($80,421 per year with estimated benefits of $22,856) would be needed to provide an industry projection for workforce development areas and produce occupational projections. An additional 0.5 Programmer V ($62,303 per year with estimated benefits of $17,706) would be needed starting in fiscal year 2027 to support and maintain the UI Tax system to collect information from employers. Starting in fiscal year 2028 a full 1.0 Programmer V ($124, 606 per year with estimated benefits of $35,413), 0.5 System Analyst IV ($40,211 per year with estimated benefits of $11,428) and 0.5 System Analyst V ($45,918 per year with estimated benefits of $13,050) to continue supporting and maintaining the UI Tax System.Other associated costs reported by TWC include $496,989 in fiscal year 2026, $240,362 in fiscal year 2027 and $216,523 in fiscal year 2028 for rent, utilities, consumables, payroll contributions, indirect personnel costs and other operating expenses. The total annual costs for TWC are $2,648,237 in fiscal year 2026, $1,560,794 in fiscal year 2027 and $1,488,186 in each fiscal year from 2028 through 2030 in General Revenue Funds.
Based on information provided by TWC, this estimate assumes the agency would require 19.0 additional full time equivalents (FTE) positions in fiscal year 2026, 14.5 FTEs in fiscal year 2027 and 13.0 FTEs in fiscal years 2028 through 2030 to implement the provisions of the bill, as follows:Two Program Specialist IV ($66,255 per year with estimated benefits of $18,830) that would only be needed in fiscal year 2026 to modify forms and procedures for enhanced wage reporting. Eight Account Examiner IV ($61,136 per year with estimated benefits of $17,659) positions would only be needed in fiscal years 2026 before reducing the examiners to five in fiscal year 2027 and maintaining only two examiners in fiscal years 2028 through 2030 to assist employers in preparing new enhanced wage reporting. A Manager IV ($91,836 per year with estimated benefits of $26,100) would be needed to store data and ensure the data is correctly coded by industry and occupation according to current federal standards. Two Research Specialist II ($58,288 per year with estimated benefits of $16,565) would be needed to develop an automated program to code submissions data from employers and supervise employees. Two Research and Statistics Technician II ($46,139 per year with estimated benefits of $13,113) would be needed for manual coding of submitted data. A Database Administrator IV ($113,278 per year with estimated benefits of $32,194) would be needed process data received from the Unemployment Insurance (UI) Tax System and to ensure the data remains in compliance with applicable state and federal laws. Three Economist III ($80,421 per year with estimated benefits of $22,856) would be needed to provide an industry projection for workforce development areas and produce occupational projections. An additional 0.5 Programmer V ($62,303 per year with estimated benefits of $17,706) would be needed starting in fiscal year 2027 to support and maintain the UI Tax system to collect information from employers. Starting in fiscal year 2028 a full 1.0 Programmer V ($124, 606 per year with estimated benefits of $35,413), 0.5 System Analyst IV ($40,211 per year with estimated benefits of $11,428) and 0.5 System Analyst V ($45,918 per year with estimated benefits of $13,050) to continue supporting and maintaining the UI Tax System.Other associated costs reported by TWC include $496,989 in fiscal year 2026, $240,362 in fiscal year 2027 and $216,523 in fiscal year 2028 for rent, utilities, consumables, payroll contributions, indirect personnel costs and other operating expenses. The total annual costs for TWC are $2,648,237 in fiscal year 2026, $1,560,794 in fiscal year 2027 and $1,488,186 in each fiscal year from 2028 through 2030 in General Revenue Funds.
Technology
TWC anticipates information technology expenditures of $501,270 in fiscal year 2026 due to additional elements that will be needed to add to the UI Tax System as required by the bill.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 320 Texas Workforce Commission, 701 Texas Education Agency, 710 Texas A&M University System Administrative and General Offices, 717 Texas Southern University, 719 Texas State Technical College System Administration, 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, 966 Howard College, 978 San Jacinto College
320 Texas Workforce Commission, 701 Texas Education Agency, 710 Texas A&M University System Administrative and General Offices, 717 Texas Southern University, 719 Texas State Technical College System Administration, 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, 966 Howard College, 978 San Jacinto College
LBB Staff: b > td > JMc, FV, LBO, AO, NV
JMc, FV, LBO, AO, NV