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

SPONSOR Madalena

ORIGINAL DATE

LAST UPDATED

01/26/06

HB 96

SHORT TITLE Tribal College Scholarship Act

SB

ANALYST Williams

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$2,200.0

$2,200.0

Recurring

Tribal Scholarship

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to various bills on state funds for scholarships at tribal colleges

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

Earmarks General

Fund Revenue essen-

tially reducing amount

available for legisla-

tive appropriation by

$2.1 million

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Higher Education Department (HED)

Public Education Department (PED)

Office of Indian Affairs (OIA)

House Bill 96 – Page

2

SUMMARY

Synopsis of Bill

The bill creates a new mechanism to provide for state student financial aid at tribal colleges in

New Mexico. It also defines conditions of eligibility for tribal college scholarships based on

residency, degree sought, enrollment, financial need, satisfactory academic progress. There is a

criminal misdemeanor provision in the act for knowingly submitting false information punish-

able by a fine not more than $1000.00 and/or restitution.

The bill earmarks general fund revenue to the extent that 5 percent of tribal gaming revenues

dedicated to the general fund would be transferred each August 1 to the tribal scholarship fund.

This calculation would be based on prior fiscal year actual receipts. This new, non-reverting

fund would receive continuing appropriations.

FISCAL IMPLICATIONS

The bill earmarks general fund revenue to the extent that 5 percent of tribal gaming revenues

dedicated to the general fund would be transferred each August 1 to the tribal college scholarship

fund. This calculation would be based on prior fiscal year actual receipts. Based on the Decem-

ber 2005 consensus revenue estimates, the reduction in general fund revenue available to the leg-

islature for appropriation would be $2.1 million.

This bill earmarks general fund revenues, essentially setting precedent for earmarks beyond

those currently existing for public schools.

This bill creates a new non-reverting fund, the tribal college scholarship fund, and provides for

continuing appropriations. Specifically, The LFC has concerns with including continuing appro-

priation language in the statutory provisions for newly created funds, as earmarking reduces the

ability of the legislature to establish spending priorities.

The bill also establishes a 5 percent set aside for HED administrative costs. This amount would

be just over $100,00 annually and would increase over time.

SIGNIFICANT ISSUES

HED and PED note:

•

“The tribal colleges in New Mexico are chartered by the Navajo Nation, Bureau of

Indian Affairs and Congress and are in a unique funding situation. They do not re-

ceive funding from state government due to their status as trust territories, and tribal

governments cannot levy property taxes. This is in accord with treaty obligations and

trust responsibility between sovereign Indian tribes or nations and the U.S. govern-

ment. Most funding comes from the Tribally Controlled College and University As-

sistance Act of 1978 (TCCUAA), which is administered by the Bureau of Indian Af-

fairs. Funds, primarily from Title I, are allocated to colleges based on the number of

Indian students from federally recognized tribes that are enrolled. The lack of state ju-

risdiction over tribes, including tribal colleges, creates a challenge in how HED will

House Bill 96 – Page

3

prepare guidelines and administer the lottery tuition scholarship fund to tribal col-

leges that are chartered either by the tribe, Bureau of Indian Affairs or Congress.

These issues of nation-to-nation jurisdictions will need to be worked out.

•

The unique charter status of tribal colleges creates a challenge in how the Tribal Col-

lege Scholarship funds will be allocated, administered and adhered to in regards to

performance accountability.

•

HED as a state entity has no jurisdiction over tribes and tribal colleges. These chal-

lenges will have to be addressed.”

ADMINISTRATIVE IMPLICATIONS

See fiscal issues.

OTHER SUBSTANTIVE ISSUES

The Department of Indian Affairs notes: A tribal college as defined by HB 96 includes a tribally,

federally or congressionally chartered post-secondary educational institution located in New

Mexico that is accredited by the north central association of colleges and school. Tribal colleges

in New Mexico are: Dine College, Southwest Indian Polytechnic Institute (SIPI), Institute of

American Indian Arts (IAIA) and the Crownpoint Institute of Technology (CIT). Accreditation

status of Crownpoint Institute of Technology is not clear at the present time.

Department of Indian Affairs notes tribal Colleges were created in response to the higher

education needs of American Indians, and generally serve geographically isolated populations

that have no other means of accessing education beyond the high school level. Tribal colleges

have become increasingly important for educational opportunities for American Indian students,

an importance achieved in a relatively brief period of time. Tribal Colleges are unique

institutions that combine personal attention with cultural relevance, in such a way as to

encourage American Indians - especially those living on reservations - to overcome the barriers

they face to higher education. (American Indian Higher Education Consortium,

www.aihec.org

)

The bill would address areas important to Tribal communities:

1.

Provide scholarship assistance to Native American students enrolled in tribal colleges es-

pecially those with financial needs with satisfactory academic performance;

2.

Increase the enrollment of Native American students at Tribal colleges

3.

Allow affordable access for Native American students seeking degrees in tribal colleges

(for Indian communities: parents, extended relatives, clan relatives, brothers, sisters)

Standards of quality in American Indian Education will be defined and determined by the Higher

Education Department at the state concerning tribal college scholarship eligibility and compli-

ance as stated in HB 96.

AW/nt