By:  Ogden, Shapleigh                                  S.B. No. 537

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to contracts with and compensation of administrators of

 1-2     public institutions of higher education.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subchapter Z, Chapter 51, Education Code, is

 1-5     amended by adding Section 51.945 to read as follows:

 1-6           Sec. 51.945.  RESTRICTIONS ON CONTRACTS WITH ADMINISTRATORS.

 1-7     (a)  The governing board of an institution of higher education may

 1-8     enter into an employment contract with an administrator that is to

 1-9     be paid in whole or in part from appropriated funds only if, before

1-10     the date the contract is executed, the governing board determines

1-11     that the contract is in the best interest of the institution.

1-12           (b)  A contract entered into by a governing board under this

1-13     section may not:

1-14                 (1)  provide for employment for more than three years;

1-15                 (2)  allow for severance or other payments on the

1-16     termination of the contract to exceed an amount equal to the

1-17     discounted net present cash value of the contract on termination at

1-18     a market interest rate agreed upon in the contract;

1-19                 (3)  allow for development leave, unless the leave is

1-20     granted under the same terms and conditions as apply to faculty

1-21     members of the institution under Section 51.105, Subchapter C; or

1-22                 (4)  award tenure in any way that varies from the

1-23     institution's general policy on the award of tenure.

 2-1           (c)  An institution of higher education may not pay a salary

 2-2     to a person who is reassigned from an administrative position to a

 2-3     faculty or other position at the institution that exceeds the

 2-4     salary of other persons with similar qualifications performing

 2-5     similar duties.

 2-6           (d)  An institution of higher education must require an

 2-7     administrator who receives development leave to:

 2-8                 (1)  return to work at the institution for an amount of

 2-9     time equal to the amount of time the administrator received

2-10     development leave; or

2-11                 (2)  pay the institution for all the costs of the

2-12     development leave, including the amount of the administrator's

2-13     salary, if any, paid during the leave.

2-14           (e)  A record that pertains to a contract between an

2-15     institution and an administrator, including terms relating to an

2-16     amount of money the institution has paid or agreed to pay or the

2-17     extension of any monetary or other consideration to an

2-18     administrator in connection with the settlement, compromise, or

2-19     other resolution of any difference between the institution or

2-20     governing body and a current or former administrator is public

2-21     information and may not be withheld from public disclosure.

2-22           (f)  In this section:

2-23                 (1)  "Administrator" means a person that has

2-24     significant administrative duties relating to the operation of the

2-25     institution, including the operation of a department, college,

 3-1     program, or other subdivision of the institution.

 3-2                 (2)  "Governing board" and "institution of higher

 3-3     education" have the meanings assigned by Section 61.003.

 3-4                 (3)  "Contract" includes a letter of agreement or

 3-5     letter of understanding.

 3-6           (g)  Notwithstanding Subsection (b)(3), the governing board

 3-7     of an institution may grant development leave at the faculty

 3-8     member's full regular salary for one year to a faculty member who

 3-9     has held an administrative position at the institution for more

3-10     than five years.

3-11           SECTION 2.  (a) This Act takes effect September 1, 1997.

3-12           (b)  The change in law made by this Act applies only to a

3-13     contract entered into on or after the effective date of this Act.

3-14           SECTION 3.  The importance of this legislation and the

3-15     crowded condition of the calendars in both houses create an

3-16     emergency and an imperative public necessity that the

3-17     constitutional rule requiring bills to be read on three several

3-18     days in each house be suspended, and this rule is hereby suspended.