HBA-DMH, CCH H.B. 1839 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1839
By: Junell
Appropriations
4/8/2001
Introduced



BACKGROUND AND PURPOSE 

The economic future of Texas depends on the state's ability to remain at
the forefront of scientific and technological innovation.  Texas is
favorably located and has the infrastructure needed to facilitate growth in
the high-tech industry.  Texas is positioned to meet the technological
challenges of the next century. Currently, Texas ranks second in the nation
in the total number of high-tech jobs and first in the number of new jobs
created since 1990.  There are 772,000 high-tech employees in Texas,
approximately 11 percent of the state's workforce.   

Texas companies will be able to lead in national and world markets only if
there is continuing development of the research base.  Universities can
comprise a major part of the research base.  Through university research,
new technologies are developed and commercialized which can create a
considerable economic advantage for the state.  Investments in research and
development can have a considerable rate of return. House Bill 1839 creates
the Texas excellence fund to support and maintain educational and general
activities, including research and student services, that promote increased
research capacity and develop institutional excellence. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1839 amends the Education Code to provide that the Texas
excellence fund (fund) is a fund outside the state treasury in the custody
of the comptroller of public accounts (comptroller).  The bill requires the
comptroller to administer and invest the fund and to deposit all interest,
dividends, and other income earned from investing the fund to the credit of
the fund.  The bill authorizes the comptroller to accept gifts or grants
from any public or private source for the fund.  The bill authorizes the
legislature to appropriate or provide for the transfer of any available
money to the credit of the fund.  The bill authorizes an institution to use
money appropriated from the fund only for the support and maintenance of
educational and general activities, including research and student
services, that promote increased research capacity and develop
institutional excellence. 

The bill specifies the manner in which the legislature, in each state
fiscal year, is authorized to appropriate all or part of the money in the
fund to eligible comprehensive research universities (research
universities) and other eligible general academic teaching institutions
(teaching institutions).  

The bill modifies the method by which the comptroller is required to
deposit the first $50 million that comes to the state at the beginning of
each state fiscal year and that is not dedicated by other law to provide
that an amount equal to the income earned from investment of the higher
education fund in the preceding state fiscal year as certified by the
comptroller must be deposited to the credit of the fund and the remaining
amount must be deposited to the credit of the higher education fund.  The
deposit that is required to be made to the higher education fund expires on
September 1 after the date the comptroller certifies that the  value of the
higher education fund is $2 billion.  In each fiscal year that begins on or
after that date, the bill requires the comptroller to deposit to the credit
of the fund from the first money that comes to the state at the beginning
of that fiscal year an amount equal to the income earned from investment of
the higher education fund in the preceding state fiscal year as certified
by the comptroller, not to exceed $50 million. 

The bill requires the comptroller, in consultation with the presiding
officers of the governing boards of the research universities and teaching
institutions, to invest the fund in a manner that maximizes the fund's
profits.  

EFFECTIVE DATE

September 1, 2001.