1-1 By: Junell, et al. (Senate Sponsor - Ellis) H.B. No. 1839
1-2 (In the Senate - Received from the House May 4, 2001;
1-3 May 7, 2001, read first time and referred to Committee on Finance;
1-4 May 10, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; May 10, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1839 By: Ellis
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to research and excellence funding at certain institutions
1-11 of higher education.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Chapter 62, Education Code, is amended by adding
1-14 Subchapter C to read as follows:
1-15 SUBCHAPTER C. TEXAS EXCELLENCE FUND
1-16 Sec. 62.051. PURPOSE. The Texas excellence fund is
1-17 established to provide funding to promote increased research
1-18 capacity and to develop institutional excellence at eligible
1-19 general academic teaching institutions in order to ensure that
1-20 Texas and its workforce remain at the forefront of scientific and
1-21 technological innovation.
1-22 Sec. 62.052. DEFINITIONS. In this subchapter:
1-23 (1) "Eligible comprehensive research university" means
1-24 an eligible general academic teaching institution that in each of
1-25 the two most recent state fiscal years, as verified by the
1-26 coordinating board:
1-27 (A) offered a full range of baccalaureate
1-28 programs and a wide variety of graduate programs;
1-29 (B) awarded 45 or more doctor of philosophy
1-30 degrees in the fields of science, agricultural science,
1-31 engineering, and clinical and experimental psychology; and
1-32 (C) expended at least $15 million in restricted
1-33 research funds and related indirect costs as reported in the
1-34 institution's annual financial report for the applicable year.
1-35 (2) "Eligible general academic teaching institution"
1-36 means a general academic teaching institution, as defined by
1-37 Section 61.003, that is eligible to participate in the funding
1-38 provided by Section 17, Article VII, Texas Constitution.
1-39 Sec. 62.053. ADMINISTRATION. (a) The Texas excellence fund
1-40 is a fund outside the state treasury in the custody of the
1-41 comptroller.
1-42 (b) The comptroller shall administer and invest the fund.
1-43 Sec. 62.054. FUNDING. (a) The legislature may appropriate
1-44 or provide for the transfer of any available money to the credit of
1-45 the Texas excellence fund.
1-46 (b) The comptroller shall deposit all interest, dividends,
1-47 and other income earned from investment of the Texas excellence
1-48 fund to the credit of the fund.
1-49 (c) The comptroller may accept gifts or grants from any
1-50 public or private source for the Texas excellence fund.
1-51 (d) An institution may use money appropriated from the Texas
1-52 excellence fund only for the support and maintenance of educational
1-53 and general activities, including research and student services,
1-54 that promote increased research capacity and develop institutional
1-55 excellence at the institution.
1-56 Sec. 62.055. APPROPRIATION AND ALLOCATION OF FUND TO
1-57 ELIGIBLE INSTITUTIONS. (a) In each state fiscal year, the
1-58 legislature may appropriate all or part of the money in the Texas
1-59 excellence fund to eligible comprehensive research universities and
1-60 other eligible general academic teaching institutions as follows:
1-61 (1) 80 percent of the amount appropriated from the
1-62 fund must be appropriated to the eligible comprehensive research
1-63 universities and be allocated among those institutions in
1-64 accordance with an equitable allocation formula based on the amount
2-1 of restricted research funds expended by each institution as
2-2 reported in each institution's annual financial report; and
2-3 (2) the remaining amount appropriated from the fund
2-4 must be appropriated to the eligible general academic teaching
2-5 institutions, other than the eligible comprehensive research
2-6 universities, and be allocated among those institutions in
2-7 accordance with an equitable allocation formula based on the amount
2-8 of restricted research funds expended by each institution as
2-9 reported in each institution's annual financial report.
2-10 (b) Subsection (a) does not apply to the allocation of money
2-11 appropriated from the Texas excellence fund for the state fiscal
2-12 biennium ending August 31, 2003. For each fiscal year in the state
2-13 fiscal biennium ending August 31, 2003, the money appropriated from
2-14 the fund is allocated among the eligible general academic teaching
2-15 institutions, including eligible comprehensive research
2-16 universities, as provided by the General Appropriations Act. This
2-17 subsection expires January 1, 2004.
2-18 SECTION 2. Section 62.025, Education Code, is amended by
2-19 amending Subsections (a) and (c) and adding Subsection (d) to read
2-20 as follows:
2-21 (a) Not later than November 1 of each state fiscal year, the
2-22 comptroller shall deposit the first $50 million that comes to the
2-23 state at the beginning of each state fiscal year and that is not
2-24 dedicated by other law as follows:
2-25 (1) except as provided by Subsection (d), an amount
2-26 equal to the income earned from investment of the higher education
2-27 fund in the preceding state fiscal year as certified by the
2-28 comptroller must be deposited to the credit of the Texas excellence
2-29 fund established under Subchapter C; and
2-30 (2) the remaining amount must be deposited to the
2-31 credit of the higher education fund.
2-32 (c) The deposit required by this section to the higher
2-33 education fund expires on September 1 after the date the
2-34 comptroller certifies that the value of the higher education fund
2-35 is $2 billion. In each state fiscal year that begins on or after
2-36 that date, the comptroller shall deposit to the credit of the Texas
2-37 excellence fund established under Subchapter C from the first money
2-38 that comes to the state at the beginning of that fiscal year an
2-39 amount equal to the income earned from investment of the higher
2-40 education fund in the preceding state fiscal year as certified by
2-41 the comptroller, not to exceed $50 million.
2-42 (d) In any state fiscal year for which the legislature has
2-43 made an appropriation specifically for the purposes of the Texas
2-44 excellence fund in an amount equal to or greater than the income
2-45 earned from investment of the higher education fund in the
2-46 preceding state fiscal year as certified by the comptroller, the
2-47 deposit to the Texas excellence fund under Subsection (a)(1) or
2-48 Subsection (c) may not be made.
2-49 SECTION 3. Subsections (b) and (d), Section 62.026,
2-50 Education Code, are amended to read as follows:
2-51 (b) The fund consists of the amount [$50 million] deposited
2-52 in the fund each state fiscal year under Section 62.025 [of this
2-53 code] and interest, dividends, and other income earned from the
2-54 investment of the fund.
2-55 (d) The comptroller shall administer and invest the fund.
2-56 In investing the fund, the comptroller has the same investment
2-57 authority as that provided under Sections 11a and 11b, Article VII,
2-58 Texas Constitution, or other law to the board of regents of The
2-59 University of Texas System with respect to the investment of the
2-60 permanent university fund. The investment authority granted to the
2-61 comptroller under this subsection is in addition to that provided
2-62 by Section 404.024, Government Code, or other law. The
2-63 comptroller, in consultation with the presiding officers of the
2-64 governing boards of the institutions eligible to benefit from the
2-65 income from the investment of the fund under Section 17, Article
2-66 VII, Texas Constitution, shall invest the fund in a manner that
2-67 maximizes the amount of income earned and gains realized from the
2-68 investment of the fund.
2-69 SECTION 4. Chapter 62, Education Code, is amended by adding
3-1 Subchapter D to read as follows:
3-2 SUBCHAPTER D. EXCELLENCE FUNDING FOR CERTAIN
3-3 PERMANENT UNIVERSITY FUND INSTITUTIONS
3-4 Sec. 62.071. DEFINITIONS. In this subchapter:
3-5 (1) "Comprehensive research university" means a
3-6 general academic teaching institution that in each of the two most
3-7 recent state fiscal years, as verified by the coordinating board:
3-8 (A) offered a full range of baccalaureate
3-9 programs and a wide variety of graduate programs;
3-10 (B) awarded 45 or more doctor of philosophy
3-11 degrees in the fields of science, agricultural science,
3-12 engineering, and clinical and experimental psychology; and
3-13 (C) expended at least $15 million in restricted
3-14 research funds and related indirect costs as reported in the
3-15 institution's annual financial report for the applicable year.
3-16 (2) "Eligible institution" means a general academic
3-17 teaching institution that is a component institution of The
3-18 University of Texas System or The Texas A&M University System,
3-19 other than The University of Texas at Austin or Texas A&M
3-20 University, eligible to participate in the funding provided by
3-21 Section 18, Article VII, Texas Constitution.
3-22 (3) "General academic teaching institution" has the
3-23 meaning assigned by Section 61.003.
3-24 Sec. 62.072. FUNDING. (a) In each state fiscal biennium,
3-25 $8,550,000 in general revenue shall be distributed to eligible
3-26 institutions in accordance with this section.
3-27 (b) For the state fiscal biennium ending August 31, 2003,
3-28 the total amount to be distributed under this section shall be
3-29 apportioned between The University of Texas System and The Texas
3-30 A&M University System based on the total amount of capital equity
3-31 funds included in the "capital equity and excellence funding"
3-32 appropriated to the eligible institutions in each system by Chapter
3-33 1589, Acts of the 76th Legislature, Regular Session, 1999 (the
3-34 General Appropriations Act), for the state fiscal biennium ending
3-35 August 31, 2001. The total amount to be distributed under this
3-36 section in each subsequent state fiscal biennium shall be
3-37 apportioned between The University of Texas System and The Texas
3-38 A&M University System based on the amount apportioned between the
3-39 systems under this subsection in the preceding state fiscal
3-40 biennium.
3-41 (c) The amount apportioned to each system under Subsection
3-42 (b) shall be allocated among the eligible institutions in that
3-43 system in accordance with an equitable allocation formula based on
3-44 the amount of restricted research funds expended by each
3-45 institution as reported in each institution's annual financial
3-46 report. In making the allocations under this subsection, the
3-47 legislature may consider that an eligible institution is or has
3-48 become a comprehensive research university and may increase the
3-49 allocation to that institution accordingly.
3-50 (d) Money received by an institution under this section may
3-51 be used only for the support and maintenance of educational and
3-52 general activities, including research and student services, that
3-53 promote increased research capacity and develop institutional
3-54 excellence at the institution.
3-55 SECTION 5. (a) For the state fiscal biennium ending August
3-56 31, 2003, $61,456,155 shall be allocated to general academic
3-57 teaching institutions, other than The University of Texas at Austin
3-58 and Texas A&M University, according to the same equitable formula
3-59 used to allocate funds under Section 62.021, Education Code. Money
3-60 received by an institution under this subsection may be used only
3-61 to promote research capacity or develop and maintain centers of
3-62 excellence at the institution. For subsequent state fiscal
3-63 biennia, $70,006,155 shall be allocated to general academic
3-64 institutions under this subsection.
3-65 (b) For the state fiscal biennium ending August 31, 2003,
3-66 $8,550,000 in general revenue shall be apportioned between The
3-67 University of Texas System and The Texas A&M University System
3-68 based on the total amount of capital equity funds included in the
3-69 "capital equity and excellence funding" appropriated to the
4-1 eligible institutions in each system by Chapter 1589, Acts of the
4-2 76th Legislature, Regular Session, 1999 (the General Appropriations
4-3 Act), for the state fiscal biennium ending August 31, 2001. The
4-4 amount of transitional assistance apportioned to each system under
4-5 this subsection shall be allocated among the eligible institutions
4-6 in that system according to the same equitable formula used to
4-7 allocate funds under Section 62.021, Education Code. This
4-8 subsection expires August 31, 2003.
4-9 SECTION 6. For the state fiscal biennium ending August 31,
4-10 2003, funds appropriated under Section 62.072, Education Code, as
4-11 added by this Act, and under Subsections (a) and (b), Section 5 of
4-12 this Act, are to be allocated from existing funds included in the
4-13 "capital equity and excellence funding" appropriated to eligible
4-14 institutions in Senate Bill No. 1, 77th Legislature, Regular
4-15 Session, 2001, as introduced.
4-16 SECTION 7. This Act takes effect September 1, 2001.
4-17 * * * * *