HBA-LJP S.B. 1190 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1190 By: Ellis, Rodney Higher Education 4/19/2001 Engrossed BACKGROUND AND PURPOSE Institutions of higher education (institution) play an important role in technology research and development. When that work is transferred into commercial applications, the benefits of academic research and development often become available to all. Under the federal Bayh-Dole Act of 1980, an institution is authorized to engage in technology development and then apply the technology to commercial applications. Under current law, institutions are required to develop intellectual property policies to comply with federal regulations. However, while The University of Texas System is authorized to establish a Center for Technology Development and Transfer at The University of Texas at Austin, there are currently no other institutions with similar authority. Senate Bill 1190 authorizes institutions to establish and administer centers to commercialize technology which they own or in which they own an interest. 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 Senate Bill 1190 amends the Education Code to authorize an institution of higher education (institution), subject to approval of its governing board, to establish centers to manage, transfer, market, or otherwise commercialize technology owned by the institution or in which the institution owns an interest. The bill requires that each center be administered within an institution and authorizes the use of property and services of an institution to achieve the purposes of the center. The bill authorizes a center to serve multiple institutions and authorizes an institution to contract with a center under the control of a governing board other than its own. With approval of its governing board, the bill authorizes an institution, through a center to: _accept and administer funds to aid in the establishment and administration of the center or to aid in the purposes of the center; _solicit and enter into agreements to fund the purposes of the center; _make technology owned or controlled by the institution available to persons for commercial applications through license agreements, assignments, or other forms of transfer; _acquire interests in and ownership of technology; _provide services and technical assistance to persons engaged in the development, manufacture, or marketing of technology in which the institution owns an interest; _acquire insurance and pay premiums on insurance of any kind and in amounts considered necessary and advisable for purposes of the center; _establish and operate corporations and limited liability companies for the development and commercialization of technology and convey interests in such entities; and _engage in other related activities required to achieve the purposes of the center. The bill sets forth provisions regarding the authorization of an institution, according to the policies and procedures approved by the governing board, to operate programs through centers to provide monetary and nonmonetary assistance to persons in commercializing technology owned by the institution or in which the institution has interest. To support the activities of a center, the bill authorizes an institution to enter into agreements establishing compensation for developed technology, enter into business arrangements to fulfill the purposes of the center, solicit, accept, and administer gifts, grants, and donations, use income from the commercialization of technology to fund center activities, and to accept equity interest in certain organizations for services, technical assistance, or for rights to technology. The bill provides that a governing board, an institution, a university system, a center, or any employee or member of those entities does not owe a fiduciary duty to any person claiming an interest in consideration received by a university system or institution in exchange for technology. EFFECTIVE DATE September 1, 2001.