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F I S C A L I M P A C T R E P O R T

SPONSOR Garcia

DATE TYPED 03/18/05 HB

SHORT TITLE Second Chance for Some Lottery Scholarships

SB 121

ANALYST Williams

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$325.0 Recurring; esca-

lates over time

Lottery Tuition

Scholarship

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to numerous student financial aid and lottery tuition scholarship bills

SOURCES OF INFORMATION

LFC Files

Commission on Higher Education

New Mexico Lottery Authority

SUMMARY

Synopsis of Bill

Endorsed by the Legislative Education Study Committee.

Senate Bill 121 authorizes lottery tuition scholarship recipients a second chance at eligibility for

those students who grade point average drops below 2.5 and who remain in school for the subse-

quent semester at their own expense and bring their cumulative grade point average up to 2.5

within that semester. This policy would apply to full-time resident students enrolled at both

four-year and two-year, public, post-secondary educational institutions in New Mexico.

FISCAL IMPLICATIONS

Based on analysis of recent data regarding loss of scholarship eligibility due to grade point aver-

age issues, CHE estimates the cost to the lottery tuition scholarship fund at roughly $325.0 thou-

sand in the first year and $2,700.0 thousand by the third year. This analysis assumes these stu-

dents persist at rates the same as those who earned the lottery scholarship in the first semester.

Senate Bill 121 -- Page 2

OTHER SUBSTANTIVE ISSUES

To evaluate impacts of potential changes to the lottery tuition scholarship program, the legisla-

ture may wish to consider requiring an annual review and reporting to the Legislative Finance

Committee, Legislative Education Study Committee, Department of Finance and Administration

and the Office of the Governor by:

1.

New Mexico Lottery Authority on revenue situation and outlook and

2. Commission on Higher Education on:

•

expenditure situation and outlook

•

fund balance situation and outlook

•

policy and fiscal impacts of each change to lottery scholarship program enacted

by the 2004 legislature

AW/lg