BILL ANALYSIS C.S.H.B. 2313 By: Stiles 4-4-95 Committee Report (Substituted) BACKGROUND The Lamar University System was created by the Legislature in 1983 and is comprised today of the System Office and five components: Lamar University at Beaumont, Lamar University at Port Arthur, Lamar University at Orange, the Lamar Institute of Technology, and the John Gray Institute. The System's two-year colleges are unique with respect to their funding: by virtue of inclusion in the Lamar System, the Port Arthur and Orange campuses are the only lower-level, two-year colleges in the State to receive Higher Education Assistance Funds and which are not supported by a local ad valorem property tax. The Lamar University System features traditional academic programs, combined with technical and vocational training. The University has a national reputation for excellence in engineering, business, environmental research, speech and hearing, and health sciences. In March of 1993, the State Auditor's Office released a management control audit of the Lamar University System that was critical in several areas. The audit cited several examples of weak management controls: inadequate cash management, inadequate management information, weak financial and automation controls, inadequate budgetary controls, ineffective monitoring of management and financial activities, lack of attention to prior recommendations for improvement, and limited effectiveness of internal audit. The audit stated that the "Board of Regents of the Lamar University System has not provided adequate direction and oversight . . . " The Legislature appropriated nearly one million dollars for the biennium to provide financial accounting and student information systems. In December of 1994, the State Auditor reported that the Lamar board of regents had made progress in fulfilling its fiduciary and oversight roles. The Texas State University System was established in 1911 and has evolved into a varied and widely respected entity serving more than 43,000 students. It is comprised of Angelo State University in San Angelo, Southwest Texas State University in San Marcos, Sul Ross State University at Alpine including campuses in Del Rio and Eagle Pass, and Sam Houston State University in Huntsville. It has a board of regents composed of nine members and a system office headed by a Chancellor appointed by the board. The Texas State University System is designed to offer administrative support to its component universities to enable them to concentrate on the unique educational mission each component offers. PURPOSE This bill would abolish the Lamar University System and board of regents and transfer the Lamar University components to the Texas State University System. RULEMAKING AUTHORITY It is the committee's opinion that this bill does expressly grant additional rulemaking authority to the board of regents, Texas State University System in Section 8 (Section 96.704 (c), Education Code) of the bill. SECTION BY SECTION ANALYSIS SECTION 1. ABOLITION OF THE BOARD AND SYSTEM. Abolishes the Lamar University System and its board of regents. SECTION 2. TRANSFER OF INSTITUTION. Transfers the governance, operation, management, and control of the Lamar University components and its educational centers and the rights, title and interest in the property of the components from the Lamar board to the board of the Texas State University System (TSUS). SECTION 3. POWERS AND DUTIES. Requires the board of the TSUS to govern, operate, manage and control the Lamar University components and its educational centers and the property pursuant to powers, duties and responsibilities that are or may be conferred by law upon the board of the TSUS. SECTION 4. APPROPRIATIONS. Transfers appropriations made by the legislature for the Lamar University components and its educational centers under governance of the Lamar board to the board of the TSUS; requires funds held for the use and benefit of Lamar University and its components to be used for the benefit of those institutions notwithstanding the change of governance. SECTION 5. CONTRACTS AND WRITTEN OBLIGATIONS. Provides for the validation of contracts and obligations entered into by the Lamar board; provides that the TSUS is substituted for the Lamar board in the contracts and obligations. SECTION 6. EFFECT OF TRANSFER. Provides that the transfer of governance does not affect credit hours earned before the effective date or the employment status of the faculty and staff and does not limit the authority of the board of TSUS. SECTION 7. Amends Chapter 95 A, Education Code, by amending Sections 95.02 and 95.05 to read as follows: Sec. 95.02. BOARD MEMBERS: APPOINTMENTS, QUALIFICATION, TERMS. The number of board members on the TSUS Board is increased from nine to twelve members and staggered terms are created for the additional board members. Sec. 95.05. QUORUM. Requires that a majority of the board constitutes a quorum. SECTION 8. Amends Chapter 96, Education Code, by adding Subchapter E to read as follows: SUBCHAPTER E. LAMAR UNIVERSITY AND RELATED INSTITUTIONS. Sec. 96.701. LAMAR UNIVERSITY. Establishes that the university is under the management and control of the board of regents, TSUS. Sec. 96.702. SPINDLETOP MEMORIAL MUSEUM. The board may create the Spindletop Memorial Museum at Lamar University. Sec. 96.703. LAMAR UNIVERSITY INSTITUTE OF TECHNOLOGY. Requires the board to maintain an educational center of Lamar University as a separate degree-granting institute to be known as Lamer University Institute of Technology. Sec. 96.704. EDUCATION CENTERS AT PORT ARTHUR AND ORANGE. (a) Requires the board to establish and maintain coeducational lower-division institution of higher education as separate degree-granting institutions. (b) Authorizes the board to acquire, construct, or otherwise provide for physical facilities for use by LU at Port Arthur and LU at Orange and accept and administer grants or gifts of money or property tendered for the use and benefit of the school. (c) Authorizes the board with approval of the Texas Higher Education Coordinating Board to prescribe courses leading to customary degrees and make rules and regulations for the campuses at Orange and Port Arthur so each school is a first-class institution. (d) Clarifies that nothing in this section limits the powers of the board. (e) Authorizes the board to expend funds allocated to Lamar University under the Constitutional provisions of the higher education assistance fund for the Port Arthur and Orange campuses as separate degree-granting institutions. Sec. 96.705. APPLICATION OF OTHER LAW. (a) All other provisions of law applicable to institutions of the TSU apply to Lamar University and its educational centers. Sec. 96.706. HAZARDOUS WASTE RESEARCH CENTER. Established at Lamar University at Beaumont and is under the authority of the board of regents of the TSUS. The center shall carry out a program that will consist of research, evaluation, testing, development, and demonstration of alternative or innovative technologies. Sec. 96.707. TEXAS ACADEMY OF LEADERSHIP IN THE HUMANITIES. Established as a two-year program at Lamar University-Beaumont for secondary school students. The Academy is under the management and control of the board of regents of TSUS. SECTION 9. Amends Chapter 54 E, Education Code, Section 54.523 to read as follows: Sec. 54.523. STUDENT CENTER FEES; TEXAS STATE UNIVERSITY SYSTEM. Authorizes TSUS to charge each student enrolled in a university or educational center a student fee not to exceed $70 per semester or $35 per six-week summer term. This fee increase will be approved by a majority vote of the students of the institution voting in an election. SECTION 10. Amends Chapter 62 B, Education Code, Section 62.021 to read as follows: Sec. 62.021. ALLOCATIONS. The amount allocated to Lamar University and its educational centers is considered part of the amount allocated to TSUS. SECTION 11. Amends Section 12.1105(e), Parks and Wildlife Code, to read as follows: Sec. 12.1105. Authorizes the Parks and Wildlife Department when requested by TSUS to engage in teaching and research related to marine science and oceanography. SECTION 12. The following provisions of the Education Code are repealed: (1) Section 54.517 and Chapter 108. SECTION 13. INITIAL APPOINTMENTS. The governor shall make the appointments to the new positions added by this Act. SECTION 14. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill does not include "educational centers" in Section 2 - 6. The substitute clarifies Sections 2 - 6 by inserting the words "educational centers." The substitute adds language in Section 6 (page 3, line 14 - 18) to clarify that the authority of the board of regents of the Texas State University System is not limited. In Section 8, the original bill contained the current fee language from Lamar statute. The substitute adds language to clarify that Lamar University is to be managed by Texas State University System board. It adds "separate degree-granting" language for Lamar Port Arthur, Orange, and the Institute of Technology. It adds language defining the Institute's purpose. It grandfathers in existing fees previously approved by the students. It recreates Hazardous Waste Research Center under the new sections without substantive language changes from the current statute. It recreates the Texas Academy of Leadership in the Humanities under new sections without substantive language changes from the current statute. In Section 9, the original bill renumbers sections and makes nonsubstantive changes to current statute regarding Hazardous Waste Research Center. The substitute amends the Texas State University statute to reflect the grandfathering of existing fees and current fee authority to the Texas State University System. In Section 10, the original bill renumbers sections and makes nonsubstantive language changes to current statute regarding the Texas Academy of Leadership in the Humanities. In the substitute, there is language to transfer current HEAF funding allocations for Lamar University to the TSUS board, which currently receives the allocation for the universities in the system. In Section 12, the repealer clause is revised to reflect the difference in the substitute. In Section 14, the original bill has an effective date of September 1, 1995. The substitute includes an emergency clause to take immediate effect or 90 days after passage. SUMMARY OF COMMITTEE ACTION H.B. 2313 was considered by the committee in a public hearing on March 21, 1995. The committee considered a complete substitute for the bill. The chair recognized Representative Al Price to explain the bill. The chair recognized Representative Mark Stiles to explain the complete substitute. The following persons testified in favor of the bill: Ms. Wilhelmina Delco; Dr. Donna Birdwell-Pheasant; Dr. Larry Allen; Dr. Ronald Fritze; Dr. Mary Alice Baker; Dr. Bruce Drury; Mr. Michael St. Clair; Mr. Lonnie Arrington; Ms. Nancy Beaulieu; Mr. Joshua W. Allen, Sr.; Dr. Alan B. Coleman; Mr. Mike Ireland; Mr. George Talbert; Mr. James W. Shuffield; Mr. James M. Stokes; and Dr. Bill Franklin. The chair recognized Representative Ron Lewis who spoke against the bill. The chair recognized Representative Zeb Zbranek who spoke against the bill. The following persons testified against the bill: Mr. William S. Leonard; Mr. Mark Steinhagen; Mr. Carroll W. Conn, Jr.; Mr. Victor J. Rogers; Mr. Kent Adams; Mr. Michael Ramsey; Mr. Gilbert Adams; Mr. Lanny Haynes; Rev. Joe D. Saffle; Judge Carl Thibodeaux; Mr. Arthur J. Guidry; Mr. Dan Cochran; Mr. Jeb Reed; Mr. Bob Shinn; Rev. Raymond Scott; Ms. Karen Priest; Mr. Marcus T. Williams; Mr. Steven M. Hale; Mr. Bryan Hollis; Mr. Bill Worsham; Ms. Janet R. Hamilton; Mr. Harry Corbett; Mr. Terry Stuebing; Ms. Alice Cater; Ms. Kathe Gardner; Ms. Robin A. Roberts; Mr. Walter Glenn; Ms. Happy Hardin Sargent; Ms. Alice M. Branson; Ms. Jo Ann Foster; Judge Don Burgess; Mr. Fernando R. Ramirez; and Ms. Barbara D. Batty. The following person testified neutrally on the bill and submitted a written report: Mr. Lamar Urbanovsky. The chair recognized Representative Al Price to close. The chair recognized Representative Mark Stiles to close. The bill and the proposed committee substitute were left as pending business. The proposed committee substitute for H.B. 2313 was considered by the committee in a public hearing on March 28, 1995. The following persons testified neutrally on the bill: Mr. Lamar Urbanovsky; and Dr. Don Brown. The substitute was adopted without objection by a non-record vote. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed, by a record vote of 8 ayes, 0 nays, 0 pnv, 1 absent.