By George H.B. No. 2636 77R7609 T A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to technology development and transfer by institutions of 1-3 higher education. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 3, Subtitle H, Education Code is amended by 1-6 the addition of Chapter 153, as follows: 1-7 CHAPTER 153. CENTERS FOR TECHNOLOGY DEVELOPMENT AND TRANSFER 1-8 Sec. 153.001. DEFINITIONS. In this chapter: 1-9 (a) "Center" means an office, department, or other 1-10 organizational unit established under this chapter. 1-11 (b) "Governing board" has the meaning assigned to this term 1-12 by Section 61.003 of this code. 1-13 (c) "Institution of higher education" has the meaning 1-14 assigned by Section 61.003 of this code. 1-15 (d) "Organization" has the meaning assigned by Section 1.201 1-16 of the Business and Commerce Code. 1-17 (e) "Person" has the meaning assigned by Section 1.201 of 1-18 the Business and Commerce Code. 1-19 (f) "Technology" means the application of scientific 1-20 knowledge for practical purposes and includes, but is not limited 1-21 to, inventions, discoveries, trade secrets, copyrighted materials, 1-22 tools, machines, materials, processes to do work, processes to 1-23 produce goods, processes to perform services, processes to carry 1-24 out other useful activities, trademarks and computer software. 2-1 Sec. 153.002. FINDINGS. 2-2 The legislature finds: 2-3 (a) That it is essential to the continued economic growth 2-4 and diversification of this state that technology development and 2-5 transfer be promoted and expanded; 2-6 (b) That the students, scientists, researchers, faculty and 2-7 staff of the institutions of higher education of this state have 2-8 developed and, in all likelihood, will continue to develop 2-9 technology that will contribute to the continued growth and 2-10 diversification of this state's economy; and 2-11 (c) That the electorate of this state authorized the 2-12 legislature to allow for the programs created by this chapter by 2-13 adopting Article III, section 52-a of the Constitution of the State 2-14 of Texas. 2-15 Sec. 153.003. CREATION OF CENTERS. (a) An institution of 2-16 higher education, subject to approval by its Each governing board 2-17 is authorized to establish centers to manage, transfer, market or 2-18 otherwise commercialize technology owned by itan institution of 2-19 higher education, or in which itan institution owns an interest. 2-20 The centers shall be under the management and control of the 2-21 governing board. 2-22 (b) Each center shall be administered within an institution 2-23 of higher education. 2-24 (c) Centers may provide services to multiple institutions of 2-25 higher education. An institution of higher education may contract 2-26 with a center under the control of a governing board other than its 2-27 own. Centers established under this chapter may be authorized by 3-1 the governing boards to enter into contracts with other centers 3-2 established hereunder. 3-3 Sec. 153.004. OPERATION OF CENTERS. An institution of higher 3-4 education, through a center established pursuant to this chapter, 3-5 may: 3-6 (a) accept and administer funds, including but not limited 3-7 to state appropriations, gifts, grants, contracts and donations to 3-8 aid in the establishment, maintenance, and operation of the center 3-9 or to aid in the discovery, development, protection or 3-10 commercialization of technology; 3-11 (b) solicit and enter into agreements to fund the discovery, 3-12 development, protection and commercialization of technology. 3-13 Property and services of institutions of higher education may be 3-14 utilized to achieve the purposes of this chapter; 3-15 (c) make technology owned or controlled by itan institution 3-16 of higher education available to persons for commercial 3-17 applications through license agreements, assignments, or other 3-18 forms of transfer; 3-19 (d) acquire interests in and ownership of technology; 3-20 (e) provide business, scientific and engineering services 3-21 and technical assistance to persons engaged in the development, 3-22 manufacture or marketing of technology in which itan institution of 3-23 higher education owns an interest; 3-24 (f) acquire insurance and pay premiums on insurance of any 3-25 kind and in amounts deemed necessary and advisable to accomplish 3-26 purposes of this chapter; 3-27 (g) establish and operate corporations, profit or 4-1 not-for-profit, and limited liability companies for the development 4-2 and commercialization of technology, and convey equity interests in 4-3 such entities; 4-4 (h) engage in such other related activities as required to 4-5 achieve the purposes of this chapter. 4-6 Sec. 153.005. Programs. (a) An institution of higher 4-7 education, through a Each center, may operate programs to provide 4-8 assistance to persons in commercializing technology owned by it an 4-9 institution of higher education, or in which itan institution of 4-10 higher education has an interest. Assistance may include providing 4-11 monetary support or non-monetary support, including but not limited 4-12 to, the use of premises, computers, computer software, 4-13 telecommunications terminal equipment, office equipment and 4-14 supplies, machinery, custodial services, utilities, or other 4-15 services that are customarily treated as overhead expenses by 4-16 institutions of higher education. 4-17 (b) The governing board shall adopt policies and procedures 4-18 to be used by an institution of higher education the center to 4-19 assess the qualifications of persons participating in a center's 4-20 programs, including objective criteria for admission and 4-21 measurement of progress, and standards for continuance or 4-22 termination of participation shall be approved by its governing 4-23 board. 4-24 Sec. 153.006. Support of Centers. In order to carry out the 4-25 purposes of this chapter, and to support the activities of centers 4-26 described herein, an institution of higher education each center 4-27 may: 5-1 (a) enter into agreements establishing royalties, fees and 5-2 other consideration for technology developed in whole or part by 5-3 institutions of higher education; 5-4 (b) accept equity interests in organizations that license, 5-5 manage, or otherwise administer rights to technology belonging to 5-6 it or under itsthe control of an institution of higher education in 5-7 exchange for such rights, in whole or in part; 5-8 (c) accept equity interests in organizations that licenses 5-9 or otherwise havehas rights in itsan institution of higher 5-10 education's technology as consideration for ita center providing 5-11 monetary, business, scientific or engineering services or technical 5-12 assistance. 5-13 (d) use income from the commercialization of technology to 5-14 fund the activities of the center; 5-15 (e) enter into other business arrangements as may be 5-16 appropriate for achieving the purposes of this chapter. 5-17 Sec. 153.007. No Fiduciary Duty. Except as otherwise 5-18 provided by law, neither a governing board, an institution of 5-19 higher education, a university system, a center or any employee or 5-20 member thereof owes a fiduciary duty to any person claiming an 5-21 interest in consideration received by a university system or an 5-22 institution of higher education in exchange for technology. 5-23 Sec. 153.008. Delegations of Authority. A governing board 5-24 may delegate its duties under this chapter to the chief executive 5-25 officer of an institution of higher education. The delegation 5-26 provided for in this section may be further delegated as allowed by 5-27 the policies of the governing board. 6-1 SECTION 2. EMERGENCY. The importance of this legislation and 6-2 the crowded condition of the calendars in both houses create an 6-3 emergency and an imperative public necessity that the 6-4 constitutional rule requiring bills to be read on three several 6-5 days in each house be suspended, and this rule is hereby suspended.