AN ACT

 1-1     relating to the establishment of the Texas New Horizons Scholarship

 1-2     Trust Fund to exempt worthy high school graduates from tuition and

 1-3     fees at public institutions of higher education.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter D, Chapter 54, Education Code, is

 1-6     amended by adding Section 54.216 to read as follows:

 1-7           Sec. 54.216.  TEXAS NEW HORIZONS SCHOLARSHIPS.  (a)  The

 1-8     Texas Higher Education Coordinating Board shall issue scholarships,

 1-9     in a number to be determined by the coordinating board after

1-10     reviewing the total amount of money available to the Texas New

1-11     Horizons Scholarship Trust Fund, to qualified students.  A

1-12     scholarship may be used by the recipient to attend an eligible

1-13     public institution of higher education.  The purpose of the

1-14     scholarship is to pay for the recipient's tuition and required

1-15     fees.

1-16           (b)  The coordinating board shall adopt rules as necessary

1-17     for the administration of this section, including rules relating to

1-18     the establishment of the scholarships, the criteria for awarding a

1-19     scholarship, the determination of eligibility, and the total

1-20     scholarship amount that an eligible student may receive.

1-21           (c)  To be eligible for a scholarship under this section, a

1-22     person must:

1-23                 (1)  be a Texas resident, as defined by coordinating

 2-1     board rules;

 2-2                 (2)  be enrolled as an undergraduate student at an

 2-3     eligible institution for at least one-half of a full course load;

 2-4                 (3)  meet minimum academic standards;

 2-5                 (4)  establish financial need;

 2-6                 (5)  satisfy one or more of the eligibility

 2-7     requirements listed in Subsection (d); and

 2-8                 (6)  comply with any other requirements adopted by the

 2-9     coordinating board under this section.

2-10           (d)  In addition to the requirements of Subsection (c),

2-11     eligibility for a scholarship shall be based on the following

2-12     factors:

2-13                 (1)  the socioeconomic background of the student,

2-14     including the percentage by which the student's family is above or

2-15     below any recognized measure of poverty, the student's household

2-16     income, and the educational level of the student's parents;

2-17                 (2)  whether the student would be the first generation

2-18     of the student's family to attend or graduate from an institution

2-19     of higher education;

2-20                 (3)  whether the wealth per student of the school

2-21     district the student attended was below the average wealth per

2-22     student of school districts as determined in Chapter 41;

2-23                 (4)  whether the student has demonstrated

2-24     responsibility in the student's work in school, with the student's

2-25     family, and within the student's community, including whether the

 3-1     student has been employed while in high school or whether the

 3-2     student has performed substantial child-care duties or has helped

 3-3     to raise children;

 3-4                 (5)  whether the student is a resident of an urban area

 3-5     or a rural area or a resident of a central city or a suburban area

 3-6     in the state;

 3-7                 (6)  the student's performance on standardized tests;

 3-8     and

 3-9                 (7)  the student's performance on standardized tests in

3-10     comparison with that of other students from similar socioeconomic

3-11     backgrounds.

3-12           (e)  A person is not eligible to receive a scholarship under

3-13     this section if the person:

3-14                 (1)  has been granted a baccalaureate degree; or

3-15                 (2)  has received an athletic scholarship.

3-16           (f)  To be eligible to participate in the scholarship

3-17     program, an eligible institution must match any state funds with

3-18     the institution's local funds or institutional funds.

3-19           (g)  Before the date applications for scholarships are first

3-20     considered under this section, the coordinating board shall

3-21     distribute to each eligible institution the eligibility criteria

3-22     and a description of the weight given to each factor and the role

3-23     each factor plays in the decision to award scholarships.

3-24           (h)  The coordinating board shall award the scholarships from

3-25     the amount available in the Texas New Horizons Scholarship Trust

 4-1     Fund.  The trust fund is established outside the treasury but is

 4-2     held in trust by the comptroller.  Money in the trust fund may be

 4-3     spent without appropriation and only to fund the program.  Interest

 4-4     and income from the assets of the trust fund shall be credited to

 4-5     and deposited in the trust fund.  In each state fiscal year the

 4-6     coordinating board may spend from the trust fund to cover the costs

 4-7     of administering this section an amount not to exceed 2.5 percent

 4-8     of the total amount of money deposited into the trust fund in that

 4-9     fiscal year, excluding matching funds transferred to the trust fund

4-10     under Subsection (f).

4-11           (i)  Each eligible institution shall transfer local funds

4-12     provided by the institution under Subsection (f) to the Texas New

4-13     Horizons Scholarship Trust Fund.  The coordinating board shall use

4-14     the funds transferred by an institution to provide scholarships to

4-15     students attending that institution.

4-16           (j)  The coordinating board may accept gifts and grants from

4-17     any public or private source for the purposes of this subchapter

4-18     and may deposit a gift or grant to the credit of the trust fund.

4-19           (k)  The legislature may appropriate money to the trust fund.

4-20           SECTION 2.  (a)  Except as provided by Subsection (b) of this

4-21     section, this Act takes effect September 1, 1997.

4-22           (b)  The Texas Higher Education Coordinating Board shall

4-23     adopt the rules for awarding scholarships under Section 54.216,

4-24     Education Code, as added by this Act, not later than December 1,

4-25     1997.

 5-1           SECTION 3.  The importance of this legislation and the

 5-2     crowded condition of the calendars in both houses create an

 5-3     emergency and an imperative public necessity that the

 5-4     constitutional rule requiring bills to be read on three several

 5-5     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 576 passed the Senate on

         April 16, 1997, by a viva-voce vote; and that the Senate concurred

         in House amendments on May 30, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 576 passed the House, with

         amendments, on May 28, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor