1-1 By: Junell, Cuellar (Senate Sponsor - Ratliff) H.B. No. 1945
1-2 (In the Senate - Received from the House April 23, 1999;
1-3 April 26, 1999, read first time and referred to Committee on
1-4 Finance; May 7, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 8, Nays 0; May 7, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1945 By: Ratliff
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the creation of permanent funds for certain public
1-11 health purposes conducted by institutions of higher education.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subtitle B, Title 3, Education Code, is amended
1-14 by adding Chapter 63 to read as follows:
1-15 CHAPTER 63. PERMANENT FUNDS FOR HEALTH-RELATED INSTITUTIONS
1-16 OF HIGHER EDUCATION
1-17 SUBCHAPTER A. PERMANENT HEALTH FUND FOR HIGHER EDUCATION
1-18 Sec. 63.001. PERMANENT HEALTH FUND FOR HIGHER EDUCATION.
1-19 (a) The permanent health fund for higher education is a special
1-20 fund in the treasury outside the general revenue fund.
1-21 (b) The fund is composed of:
1-22 (1) money transferred to the fund at the direction of
1-23 the legislature;
1-24 (2) gifts and grants contributed to the fund; and
1-25 (3) the returns received from investment of money in
1-26 the fund.
1-27 Sec. 63.002. ADMINISTRATION AND USE OF FUND. (a) The board
1-28 of regents of The University of Texas System shall administer the
1-29 fund. The board may manage and invest the fund in the same manner
1-30 as the board manages and invests other permanent endowments. In
1-31 administering the fund, the board shall invest any funds in a
1-32 manner that preserves the purchasing power of the fund's assets and
1-33 the fund's annual distributions. The board shall determine the
1-34 amount available for distribution from the fund in a manner
1-35 consistent with the board's procedures for making distributions to
1-36 other endowment beneficiaries. The amount available for
1-37 distribution shall be determined by the investment and distribution
1-38 policy for the fund's assets adopted by the board. Expenses of
1-39 managing the fund's assets shall be paid from the fund.
1-40 (b) Except as provided by Subsections (c), (d), and (f),
1-41 money in the fund may not be used for any purpose.
1-42 (c) The amount available for distribution from the fund may
1-43 be appropriated only for programs that benefit medical research,
1-44 health education, or treatment programs at the following
1-45 health-related institutions of higher education:
1-46 (1) The University of Texas Health Science Center at
1-47 San Antonio;
1-48 (2) The University of Texas M. D. Anderson Cancer
1-49 Center;
1-50 (3) The University of Texas Southwestern Medical
1-51 Center at Dallas;
1-52 (4) The University of Texas Medical Branch at
1-53 Galveston;
1-54 (5) The University of Texas Health Science Center at
1-55 Houston;
1-56 (6) The University of Texas Health Science Center at
1-57 Tyler;
1-58 (7) The Texas A&M University Health Science Center;
1-59 (8) the University of North Texas Health Science
1-60 Center at Fort Worth;
1-61 (9) the Texas Tech University Health Sciences Center;
1-62 and
1-63 (10) Baylor College of Medicine, if a contract between
1-64 Baylor College of Medicine and the Texas Higher Education
2-1 Coordinating Board is in effect under Section 61.092.
2-2 (d) The governing board of a health-related institution of
2-3 higher education entitled to receive money under this subchapter
2-4 may solicit and accept gifts and grants to the fund. A gift or
2-5 grant to the fund shall be appropriated and distributed and may be
2-6 used in the same manner as an amount appropriated under Section
2-7 63.003, subject to any limitation or requirement placed on the gift
2-8 or grant by the donor or granting entity.
2-9 (e) Sections 403.095 and 404.071, Government Code, do not
2-10 apply to the fund. Section 404.094(d), Government Code, applies to
2-11 the fund.
2-12 (f) An institution of higher education that has accepted a
2-13 gift under Subchapter I, Chapter 51, that was conditioned on the
2-14 receipt by the institution of state matching funds from the eminent
2-15 scholars fund shall use money the institution receives under this
2-16 subchapter to provide the state matching funds, treating that
2-17 amount as if it were a distribution to the institution from the
2-18 eminent scholars fund for purposes of Subchapter I, Chapter 51.
2-19 Sec. 63.003. ALLOCATION OF DISTRIBUTION. (a) The
2-20 legislature shall appropriate the amount available for distribution
2-21 from the fund to the health-related institutions of higher
2-22 education listed in Section 63.002(c). The amount appropriated
2-23 shall be distributed as follows:
2-24 (1) 60 percent shall be distributed in equal amounts
2-25 to each institution; and
2-26 (2) the remaining amount shall be distributed in equal
2-27 amounts for each of the following categories, with each institution
2-28 receiving a share in each category proportionate to the amount that
2-29 the institution spent in that category in the preceding fiscal
2-30 biennium as determined by the institution's annual financial
2-31 report, compared to the total spending of every institution listed
2-32 in Section 63.002(c) in that category in the preceding biennium:
2-33 (A) instructional expenditures;
2-34 (B) research expenditures; and
2-35 (C) unsponsored charity care.
2-36 (b) The amount appropriated under Subsection (a) shall be
2-37 distributed quarterly by the comptroller to each health-related
2-38 institution of higher education.
2-39 (c) The Legislative Budget Board shall make any necessary
2-40 determination of each institution's portion of an amount
2-41 appropriated under Subsection (a)(2) and shall provide that
2-42 information to the legislature and the comptroller.
2-43 (d) For the purposes of this section, Baylor College of
2-44 Medicine may receive funds under Subsection (a)(2) only if the
2-45 institution provides the comptroller with an independently audited
2-46 schedule of information that substantially complies with the
2-47 reporting requirements issued by the comptroller for other eligible
2-48 institutions under Subsection (a)(2). Information under this
2-49 subsection must be supplied not later than the time other eligible
2-50 institutions are required to submit similar information.
2-51 (Sections 63.004-63.100 reserved for expansion
2-52 SUBCHAPTER B. PERMANENT FUNDS FOR HEALTH-RELATED INSTITUTIONS
2-53 Sec. 63.101. CREATION OF FUNDS. (a) A separate permanent
2-54 endowment fund is established for the benefit of each of the
2-55 following institutions of higher education:
2-56 (1) The University of Texas Health Science Center at
2-57 San Antonio;
2-58 (2) The University of Texas M. D. Anderson Cancer
2-59 Center;
2-60 (3) The University of Texas Southwestern Medical
2-61 Center at Dallas;
2-62 (4) The University of Texas Medical Branch at
2-63 Galveston;
2-64 (5) The University of Texas Health Science Center at
2-65 Houston;
2-66 (6) The University of Texas Health Science Center at
2-67 Tyler;
2-68 (7) The University of Texas at El Paso;
2-69 (8) The Texas A&M University Health Science Center;
3-1 (9) the University of North Texas Health Science
3-2 Center at Fort Worth;
3-3 (10) the components of the Texas Tech University
3-4 Health Sciences Center located in El Paso;
3-5 (11) the components of the Texas Tech University
3-6 Health Sciences Center at locations other than El Paso;
3-7 (12) the regional academic health center established
3-8 under Section 74.611; and
3-9 (13) Baylor College of Medicine, if a contract between
3-10 Baylor College of Medicine and the Texas Higher Education
3-11 Coordinating Board is in effect under Section 61.092.
3-12 (b) Each separate permanent endowment fund is a special fund
3-13 in the treasury outside the general revenue fund.
3-14 (c) Each separate permanent endowment fund is composed of:
3-15 (1) money transferred to the fund at the direction of
3-16 the legislature;
3-17 (2) gifts and grants contributed to the fund; and
3-18 (3) the returns received from investment of money in
3-19 the fund.
3-20 Sec. 63.102. ADMINISTRATION AND USE OF FUNDS. (a) The
3-21 governing board of an institution or component for which a fund is
3-22 established under this subchapter may administer the fund of that
3-23 institution. If a governing board elects not to administer the
3-24 fund, the comptroller shall administer the fund. The administrator
3-25 of a fund established under this subchapter shall invest the fund
3-26 in a manner intended to preserve the purchasing power of the fund's
3-27 assets and the fund's annual distributions. Annual distributions
3-28 for any fund shall be determined by the investment and distribution
3-29 policy adopted by the administrator of the fund for the fund's
3-30 assets. Expenses of managing the assets of a fund shall be paid
3-31 from the fund. If a governing board administers a fund, the
3-32 governing board may manage and invest the fund in the same manner
3-33 as the board manages and invests other permanent endowments, and
3-34 the board shall make distributions from the fund in a manner
3-35 consistent with the board's procedures for making distributions to
3-36 other endowment beneficiaries. If the comptroller administers a
3-37 fund, the comptroller may acquire, exchange, sell, supervise,
3-38 manage, or retain, through procedures and subject to restrictions
3-39 the comptroller considers appropriate, any kind of investment of
3-40 the fund's assets that prudent investors, exercising reasonable
3-41 care, skill, and caution, would acquire or retain in light of the
3-42 purposes, terms, distribution requirements, and other circumstances
3-43 of the fund then prevailing, taking into consideration the
3-44 investment of all the assets of the fund rather than a single
3-45 investment.
3-46 (b) Except as provided by Subsections (c), (d), and (f),
3-47 money in a fund established under this subchapter may not be used
3-48 for any purpose.
3-49 (c) The amount available for distribution from each fund may
3-50 be appropriated only for research and other programs that are
3-51 conducted by the institution or components for which the fund is
3-52 established and that benefit the public health. The comptroller or
3-53 the governing board shall report to the legislature the amount of
3-54 funds that are eligible for appropriation. An amount appropriated
3-55 from the fund established for The University of Texas Health
3-56 Science Center at San Antonio may be used to establish, maintain,
3-57 and operate a children's cancer center. An amount appropriated
3-58 from the funds established for the components of the Texas Tech
3-59 University Health Sciences Center located in El Paso and for The
3-60 University of Texas at El Paso may be used for the establishment
3-61 and operation of an institute of public health in El Paso. An
3-62 amount appropriated from the fund established for the components of
3-63 the Texas Tech University Health Sciences Center at locations other
3-64 than El Paso may be used for research and other programs that
3-65 benefit the public health in areas outside El Paso. An amount
3-66 appropriated from the fund established for The Texas A&M University
3-67 Health Science Center may be used for the establishment and
3-68 operation of the Coastal Bend Health Education Center in Corpus
3-69 Christi.
4-1 (d) The comptroller or the governing board of an institution
4-2 or component may solicit and accept gifts and grants to the
4-3 institution's or component's fund. A gift or grant to the fund may
4-4 be expended and used in the same manner as an amount distributed
4-5 from the fund under Subsection (c), subject to any limitation or
4-6 requirement placed on the gift or grant by the donor or granting
4-7 entity.
4-8 (e) Sections 403.095 and 404.071, Government Code, do not
4-9 apply to a fund established under this subchapter. Section
4-10 404.094(d), Government Code, applies to the fund.
4-11 (f) An institution of higher education that has accepted a
4-12 gift under Subchapter I, Chapter 51, that was conditioned on the
4-13 receipt by the institution of state matching funds from the eminent
4-14 scholars fund shall use money the institution receives under this
4-15 subchapter to provide the state matching funds, treating that
4-16 amount as if it were a distribution to the institution from the
4-17 eminent scholars fund for purposes of Subchapter I, Chapter 51.
4-18 SECTION 2. Section 61.092, Education Code, is amended to
4-19 read as follows:
4-20 Sec. 61.092. CONTRACTS WITH BAYLOR COLLEGE OF MEDICINE.
4-21 (a) The board may contract with Baylor College of Medicine for the
4-22 administration, direction, and performance of all services and the
4-23 provision, maintenance, operation, and repair of all buildings,
4-24 facilities, structures, equipment, and materials necessary or
4-25 proper to the education, training, preparation, or instruction of
4-26 bona fide Texas resident undergraduate medical students.
4-27 (b) Funds received by Baylor College of Medicine under
4-28 Subchapter A or B, Chapter 63, may be used only to support programs
4-29 that benefit medical research, health education, or treatment
4-30 programs at the institution.
4-31 (c) If Baylor College of Medicine elects to administer the
4-32 fund established for the institution under Subchapter B, Chapter
4-33 63, Baylor College of Medicine and the board must enter into a
4-34 contract that requires Baylor College of Medicine to administer the
4-35 fund in the same manner and subject to the same regulations,
4-36 including disclosure requirements, as would apply to the
4-37 comptroller if the comptroller were administering a fund under
4-38 Subchapter B, Chapter 63.
4-39 (d) This [However, nothing in this] subchapter may not be
4-40 construed to empower the board to limit, alter, modify, or in any
4-41 other manner change or approve, or negotiate for changes in or
4-42 approval of, the administration, direction, and performance of
4-43 these services or the provision, maintenance, operation, and repair
4-44 of buildings, facilities, structures, equipment, or materials.
4-45 SECTION 3. (a) On the effective date of this Act, the
4-46 comptroller shall transfer from the general revenue fund to the
4-47 permanent health fund for higher education established by
4-48 Subchapter A, Chapter 63, Education Code, as added by this Act, the
4-49 amount appropriated in the General Appropriations Act for the
4-50 permanent health fund for higher education.
4-51 (b) On the effective date of this Act, the comptroller shall
4-52 transfer from the general revenue fund to the separate permanent
4-53 endowment trust fund established by Subchapter B, Chapter 63,
4-54 Education Code, as added by this Act, for each of the following
4-55 institutions of higher education or components of an institution of
4-56 higher education the following amounts:
4-57 (1) The University of Texas Health Science Center at
4-58 San Antonio - $150 million;
4-59 (2) The University of Texas M. D. Anderson Cancer
4-60 Center - $150 million;
4-61 (3) The University of Texas Southwestern Medical
4-62 Center at Dallas - $50 million;
4-63 (4) The University of Texas Medical Branch at
4-64 Galveston - $25 million;
4-65 (5) The University of Texas Health Science Center at
4-66 Houston - $25 million;
4-67 (6) The University of Texas Health Science Center at
4-68 Tyler - $25 million;
4-69 (7) The University of Texas at El Paso - $25 million;
5-1 (8) The Texas A&M University Health Science
5-2 Center - $25 million;
5-3 (9) the University of North Texas Health Science
5-4 Center at Fort Worth - $25 million;
5-5 (10) the components of the Texas Tech University
5-6 Health Sciences Center located in El Paso - $25 million;
5-7 (11) the components of the Texas Tech University
5-8 Health Sciences Center at locations other than El Paso - $25
5-9 million;
5-10 (12) the regional academic health center established
5-11 under Section 74.611, Education Code - $5 million; and
5-12 (13) Baylor College of Medicine - $25 million.
5-13 (c) In addition to the permissible appropriations and uses
5-14 of the funds transferred to the permanent funds for health-related
5-15 institutions established under Chapter 63, Education Code, as added
5-16 by this Act, the funds may also be appropriated by the legislature
5-17 to pay any amount of money that the federal government determines
5-18 that the state should repay to the federal government or that the
5-19 federal government should recoup from the state in the event of
5-20 national legislation regarding the subject matter of the case
5-21 styled The State of Texas v. The American Tobacco Co., et al., No.
5-22 5-96CV-91, in the United States District Court, Eastern District of
5-23 Texas.
5-24 SECTION 4. The importance of this legislation and the
5-25 crowded condition of the calendars in both houses create an
5-26 emergency and an imperative public necessity that the
5-27 constitutional rule requiring bills to be read on three several
5-28 days in each house be suspended, and this rule is hereby suspended,
5-29 and that this Act take effect and be in force from and after its
5-30 passage, and it is so enacted.
5-31 * * * * *