MMA C.S.H.B. 2055 75(R)BILL ANALYSIS HIGHER EDUCATION C.S.H.B. 2055 By: Maxey 4-4-97 Committee Report (Substituted) BACKGROUND In 1995, the 74th Legislature passed H.B. 1214 creating the Texas Tomorrow Fund (TTF), a prepaid tuition program. The bill that created TTF contains a provision for a prepaid tuition scholarship program that allows private benefactors to fund scholarships while taking advantage of the savings available under TTF. This program could be strengthened by allowing public contributions to the program, including public funds to be used as "challenge" grants to the private sector. The program also will be more attractive to potential contributors if they can participate in the award process. PURPOSE C.S.H.B. 2055 would allow private donations to the Prepaid Higher Education Scholarships for Needy Students, under certain guidelines, and would make a provision for matching grants. Authorizes Texas Prepaid Higher Education Tuition Board or the board of a direct-support organization established by the board to award scholarships to students who meet economic or academic requirements established by either entity. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 54.633(a)-(e), Education Code, as follows: (a) Adds language that gives authority to a board of directors of a direct-support organization, as established by Subsection (e), in addition to the Texas Prepaid Higher Education Tuition Board to award scholarships to a student who meets the following: (1) either economic or academic requirements of the Texas Prepaid Higher Education Tuition Board, or the established board of a direct-support organization; and (2) specific criteria of the scholarship, if applicable. (b) States the terms under which a scholarship may be terminated. Makes conforming changes to (1) and (2) and adds Subdivision (3) which allows the Prepaid Higher Education Tuition Board to terminate scholarships if a recipient violates a condition placed on the scholarship. (c) Requires the board to do the following: (1) establish guidelines for receiving money from the private sector, including guidelines for accepting contributions subject to an agreement with the contributor that the funds be used for a scholarship awarded for a specific use or purpose or subject to conditions placed on the award of the scholarship, including the satisfaction of academic, economic, or other requirements; (2) establish guidelines for awarding scholarships, including awarding scholarships for a specific use or purpose; (3) exempt scholarships awarded for a specific use or purpose or subject to special conditions from a requirement regarding equitable geographic representation in the awarding of scholarships. (d) States that scholarships under this subsection may be funded by the private sector, and public funds, if appropriated for that purpose, including matching grants and any combination thereof. (e) Allows the board to establish a direct-support organization under the Texas Non-Profit Corporation Act to: (1) handle the financial activity of the program; (2) purchase and award scholarships; and (3) establish economic and academic eligibility requirements consistent with board rules. SECTION 2. (a) Effective date: September 1, 1997. (b) Requires the Prepaid Higher Education Tuition Board to adopt guidelines for receiving money from the private sector and for awarding scholarships for a specific purpose or use not later than January 1, 1998. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE H.B. 2055 amended Subsection (a) and did not eliminate the requirement that scholarship recipients meet both economic and academic requirements adopted by the board, whereas C.S.H.B. 2055 allows students to meet either of the criteria. C.S.H.B. 2055 allows for the establishment of a direct-support organization with the authority to handle the program's financial activities, award scholarships or establish academic or economic criteria for awarding scholarships, as long as they are consistent with board rules. This provision was not contained in H.B. 2055.