Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
if they are used for other purposes.
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F I S C A L I M P A C T R E P O R T
SPONSOR Taylor
ORIGINAL DATE
LAST UPDATED
02/09/06
02/15/06 HB 81/aHFl#1 and HFl#2
SHORT TITLE Increase Lottery Scholarship Eligibility
SB
ANALYST Williams
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
Minimal
Recurring
Lottery Tuition Fund -
--- military depend-
ents of NM residents
$80.0-$840.0
* See Text
Recurring (with esca-
lation over time)
Lottery Tuition
Scholarship Fund ---
tribal colleges
Indeterminate at this time
Recurring
Lottery Tuition Fund -
-- children of NM
resident military ser-
vice people killed in
action
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to various bills regarding student financial and lottery tuition scholarship program
SOURCES OF INFORMATION
LFC Files
Responses Received From
Public Education Department (PED)
Higher Education Department (HED)
New Mexico Lottery Authority (NMLA)
SUMMARY
Synopsis of HFl#1 Amendment
The amendment expands eligibility for lottery tuition scholarships to tribal colleges located in
New Mexico, and expands eligibility for lottery tuition scholarships to high school students at-
tending a Bureau of Indian Affairs (BIA) school in New Mexico.
pg_0002
House Bill 81/aHFl#1 and HFl#2 – Page
2
Synopsis of HFl#2 Amendment
The amendment expands eligibility for lottery tuition scholarships to children of New Mexico
residents killed in action during service with military or the New Mexico national guard and who
complete an accredited high school curriculum (or complete a GED) and immediately attend a
qualifying New Mexico institution.
Synopsis of Original Bill
House Bill 81 extends eligibility for lottery tuition scholarships to include qualifying students
who are dependents of New Mexico residents stationed outside of New Mexico due to service in
the United States armed forces. These students may qualify by completing a high school curricu-
lum at any high school or receiving a graduate equivalent diploma and immediately attending a
qualifying New Mexico educational institution. The bill limits the authorization to eligible New
Mexico residents paying New Mexico personal income taxes.
FISCAL IMPLICATIONS
Eligibility to include qualifying students for dependents of New Mexico residents stationed
outside of New Mexico due to service in the United States armed forces
The projected fiscal impact is expected to be minimal.
Eligibility Expansion to Tribal Colleges and BIA High Schools
Tribal institutions are not currently required to provide student data to HED. Various scenarios
were analyzed over the last few years and are summarized below. The costs below are for one
full year, and would escalate as additional cohorts are added. Note there is anecdotal evidence
that many students at tribal colleges would not meet the current eligibility requirements of the
lottery tuition scholarship, noted in substantive issues below. In its 2006 FIR, HED estimates the
cost at $50.4 thousand in the first year, with a cost in five years of about $80.0 thousand.
However, tribal college officials have provided data on their estimates of eligible students in
various venues, which would reflect significantly larger fiscal costs. Additional issues for con-
sideration include that SIPI does not currently charge tuition; it is unclear whether this institution
should be added to the potential cost.
Previous Years Data
Based on data provided to the Commission on Higher Education in 2003 by Dine, IAIA, SIPI
and CIT regarding potential eligibility and annual tuition, the following awards were estimated:
Dine College $40.8
IAIA $45.6
SIPI No tuition *
CIT $3.0
Total $89.4
However, at a 2003 legislative hearing, tribal college representatives testified the bill would have
a potential fiscal impact of approximately $350.0 thousand. An analysis of similar legislation
from the 2002 session (HB 252) reflected potential fiscal impact of $837.0 thousand based on a
pg_0003
House Bill 81/aHFl#1 and HFl#2 – Page
3
CHE analysis of financial aid data, including student enrollment and annual tuition.
2005 Data
In testimony presented to the 2005 interim Lottery Oversight Subcommittee
,
tribal colleges indi-
cated the following numbers of students would be eligible for lottery tuition scholarships. Cur-
rent annual rates of tuition as noted on tribal college websites are also shown. This methodology
would result in a first year cost to the lottery tuition scholarship fund of at least $460.0 thousand.
No. of Eligible Students Annual Tuition
Crownpoint Institute of Technology 65 not available
Dine College 173 $720
Institute of American Indian Arts 120 $2400
Southwestern Indian Polytechnic Institute no tuition charged *
Notes:
* SWIPI does not charge tuition. Books and room and board are also provided free of charge to
members of federally recognized Indian tribes.
The expansion of lottery tuition scholarship eligibility to BIA schools is assumed to have no fis-
cal impact based on current eligibility criteria as noted below in Substantive Issues.
Children of New Mexico Residents Killed in Action
The projected fiscal impact is indeterminate at this time, but is not expected to be very large,
since these parents are already New Mexico residents.
SIGNIFICANT ISSUES
Latest available revenue and expenditure comparison for the lottery tuition fund is attached.
Currently, all qualified students enrolled in a two- or four-year public post-secondary institution
may receive a Lottery Success Scholarship. Other public and private non-profit institutions such
as the College of Santa Fe, St. John’s College, and College of the Southwest and tribal colleges
are not eligible to receive lottery funds.
High school students graduating from a school in New Mexico operated by the Bureau of Indian
Affairs and out-of-state members of the Navajo tribe, who reside on the Navajo reservation, as
certified by the Navajo Department of Higher Education, are eligible for lottery tuition scholar-
ships if they attend a public, post-secondary institution.
Executive branch fiscal impact reports note: “The four tribal colleges in New Mexico offer As-
sociate's and Bachelor's degrees in a variety of academic disciplines and offer certificate and as-
sociates degrees. The majority of the students who attend tribal colleges are non-traditional, fe-
male, American Indian, and first generation college students….American Indian students con-
tinue to have the lowest representation in higher education and make up less then 1% of college
enrollment... Tribal colleges are located on or near tribal reservations, American Indian students
who enroll in tribal colleges are most likely to graduate due to the support of family, extended
family, and a college student population that reflects their culture and identity. Statistics indicate
that more than 50% of those students who transfer from tribal colleges into four-year public
postsecondary institutions graduate….“
pg_0004
House Bill 81/aHFl#1 and HFl#2 – Page
4
PERFORMANCE IMPLICATIONS
In related legislation, PED notes the bill has the potential to support implementation of the Indian
Education Act and supports the Governor’s Pre K-20 initiative.
ADMINISTRATIVE IMPLICATIONS
Tribal institution financial aid officers would be required to certify high school graduation
dates/location and train in lottery draw down procedures.
Further, data reporting by tribal institutions would be needed.
TECHNICAL ISSUES
The legislature may want to consider clarifying the number of semesters of eligibility for a lot-
tery tuition scholarship, including attendance at both a two-year and a four-year institution.
OTHER SUBSTANTIVE ISSUES
The bill may be in conflict with Article 12, Section 3 of the New Mexico Constitution which
specifies “The schools, colleges, universities and other educational institutions provided for by
this constitution shall forever remain under the exclusive control of the state, and no part of the
proceeds arising from the sale or disposal of any lands granted to the state by congress, or any
other funds appropriated, levied or collected for educational purposes, shall be used for the sup-
port of any sectarian, denominational or private school, college or university.” Further, there
may be considerations of the anti-donation clause in Article 9, Section 14 of the New Mexico
Constitution.
In related legislation, HED and PED note: “The tribal colleges in New Mexico are chartered by
the Navajo Nation, Bureau of Indian Affairs, and Congress in a unique funding situation. They
do not receive funding from state governments due to their status as trust territories, and tribal
governments cannot levy property taxes. This is in accord with treaty obligations and trust re-
sponsibility between sovereign Indian tribes or nations and the U. S. government. Most funding
comes from the Tribally Controlled College and University Assistance Act of 1978 (TCCUAA)
which is administered by the Bureau of Indian Affairs. Funds, primarily from Title I, are allo-
cated to colleges based on the number of Indian students from federally recognized tribes that are
enrolled. The lack of state jurisdiction over tribes including tribal college creates a challenge in
how the NMHED will prepare guidelines and administer the lottery tuition scholarship to tribal
colleges who are chartered either by the tribe, Bureau of Indian Affairs or Congress. These issues
of nation to nation jurisdictions will need to be addressed.”
Qualifications for the Lottery Success Scholarship are:
•
New Mexico residency;
•
Graduation from a New Mexico public, accredited private, parochial, BIA or home high
school, or completion of a New Mexico Graduate Equivalent Diploma (GED);
•
Full-time (12 credit hours) enrollment at an eligible New Mexico public college or uni-
versity in the first regular semester immediately following high school graduation; and
•
Maintenance of a minimum 2.5 grade point average.
The tribal institutions would be required to provide student data, which is not currently reported
to HED.
pg_0005
House Bill 81/aHFl#1 and HFl#2 – Page
5
The legislature may wish to address the potential for cooperative agreements to set tuition schol-
arship awards at amounts equal to the percentage awarded at state four-year or two-year educa-
tional institutions, limited to the highest tuition rate charged by either a four-year research, four-
year regional or two-year institution, as appropriate. Such language would effectively cap lottery
tuition fund claims in the event of tuition escalation at the tribal institutions.
New Mexico Lottery Authority notes it may not be able to generate incremental revenues to fund
significant expansions of scholarship eligibility.
POSSIBLE QUESTIONS
1.
Is the bill in conflict with Article 12, Section 3 of the New Mexico Constitution regarding
state control of institutions or with Article IX, Section 14, the anti-donation clause.
2.
What data reporting requirements would be needed for enactment of this bill.
3.
How could potential future increases in tuition rates or imposition of tuition be addressed
given the lack of state jurisdiction.
AW/mt