1-1 By: Ellis, et al. S.B. No. 737
1-2 (In the Senate - Filed February 15, 2001; February 19, 2001,
1-3 read first time and referred to Committee on Finance;
1-4 March 5, 2001, reported favorably; March 19, 2001, recommitted to
1-5 Committee on Finance; March 22, 2001, reported adversely, with
1-6 favorable Committee Substitute by the following vote: Yeas 12,
1-7 Nays 0; March 22, 2001, sent to printer.)
1-8 COMMITTEE SUBSTITUTE FOR S.B. No. 737 By: Ellis
1-9 A BILL TO BE ENTITLED
1-10 AN ACT
1-11 relating to research and excellence funding at certain institutions
1-12 of higher education.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Chapter 62, Education Code, is amended by adding
1-15 Subchapter C to read as follows:
1-16 SUBCHAPTER C. TEXAS EXCELLENCE FUND
1-17 Sec. 62.051. PURPOSE. The Texas excellence fund is
1-18 established to provide funding to promote increased research
1-19 capacity and to develop institutional excellence at eligible
1-20 general academic teaching institutions in order to ensure that
1-21 Texas and its workforce remain at the forefront of scientific and
1-22 technological innovation.
1-23 Sec. 62.052. DEFINITIONS. In this subchapter:
1-24 (1) "Eligible comprehensive research university" means
1-25 an eligible general academic teaching institution that in each of
1-26 the two most recent state fiscal years, as verified by the
1-27 coordinating board:
1-28 (A) offered a full range of baccalaureate
1-29 programs and a wide variety of graduate programs;
1-30 (B) awarded 45 or more doctor of philosophy
1-31 degrees in the fields of science, agricultural science,
1-32 engineering, and clinical and experimental psychology; and
1-33 (C) expended at least $15 million in restricted
1-34 research funds and related indirect costs as reported in the
1-35 institution's annual financial report for the applicable year.
1-36 (2) "Eligible general academic teaching institution"
1-37 means a general academic teaching institution, as defined by
1-38 Section 61.003, that is eligible to participate in the funding
1-39 provided by Section 17, Article VII, Texas Constitution.
1-40 Sec. 62.053. ADMINISTRATION. (a) The Texas excellence fund
1-41 is a fund outside the state treasury in the custody of the
1-42 comptroller.
1-43 (b) The comptroller shall administer and invest the fund.
1-44 Sec. 62.054. FUNDING. (a) The legislature may appropriate
1-45 or provide for the transfer of any available money to the credit of
1-46 the Texas excellence fund.
1-47 (b) The comptroller shall deposit all interest, dividends,
1-48 and other income earned from investment of the Texas excellence
1-49 fund to the credit of the fund.
1-50 (c) The comptroller may accept gifts or grants from any
1-51 public or private source for the Texas excellence fund.
1-52 (d) An institution may use money appropriated from the Texas
1-53 excellence fund only for the support and maintenance of educational
1-54 and general activities, including research and student services,
1-55 that promote increased research capacity and develop institutional
1-56 excellence at the institution.
1-57 Sec. 62.055. APPROPRIATION AND ALLOCATION OF FUND TO
1-58 ELIGIBLE INSTITUTIONS. (a) In each state fiscal year, the
1-59 legislature may appropriate all or part of the money in the Texas
1-60 excellence fund to eligible comprehensive research universities and
1-61 other eligible general academic teaching institutions as follows:
1-62 (1) 80 percent of the amount appropriated from the
1-63 fund must be appropriated to the eligible comprehensive research
1-64 universities and be allocated among those institutions in
2-1 accordance with an equitable allocation formula based on the amount
2-2 of restricted research funds expended by each institution as
2-3 reported in each institution's annual financial report; and
2-4 (2) the remaining amount appropriated from the fund
2-5 must be appropriated to the eligible general academic teaching
2-6 institutions, other than the eligible comprehensive research
2-7 universities, and be allocated among those institutions in
2-8 accordance with an equitable allocation formula based on the amount
2-9 of restricted research funds expended by each institution as
2-10 reported in each institution's annual financial report.
2-11 (b) Subsection (a) does not apply to the allocation of money
2-12 appropriated from the Texas excellence fund for the state fiscal
2-13 biennium ending August 31, 2003. For each fiscal year in the state
2-14 fiscal biennium ending August 31, 2003, the money appropriated from
2-15 the fund is allocated among the eligible general academic teaching
2-16 institutions, including eligible comprehensive research
2-17 universities, as provided by the General Appropriations Act. This
2-18 subsection expires January 1, 2004.
2-19 SECTION 2. Section 62.025, Education Code, is amended by
2-20 amending Subsections (a) and (c) and adding Subsection (d) to read
2-21 as follows:
2-22 (a) Not later than November 1 of each state fiscal year, the
2-23 comptroller shall deposit the first $50 million that comes to the
2-24 state at the beginning of each state fiscal year and that is not
2-25 dedicated by other law as follows:
2-26 (1) except as provided by Subsection (d), an amount
2-27 equal to the income earned from investment of the higher education
2-28 fund in the preceding state fiscal year as certified by the
2-29 comptroller must be deposited to the credit of the Texas excellence
2-30 fund established under Subchapter C; and
2-31 (2) the remaining amount must be deposited to the
2-32 credit of the higher education fund.
2-33 (c) The deposit required by this section to the higher
2-34 education fund expires on September 1 after the date the
2-35 comptroller certifies that the value of the higher education fund
2-36 is $2 billion. In each state fiscal year that begins on or after
2-37 that date, the comptroller shall deposit to the credit of the Texas
2-38 excellence fund established under Subchapter C from the first money
2-39 that comes to the state at the beginning of that fiscal year an
2-40 amount equal to the income earned from investment of the higher
2-41 education fund in the preceding state fiscal year as certified by
2-42 the comptroller, not to exceed $50 million.
2-43 (d) In any state fiscal year for which the legislature has
2-44 made an appropriation specifically for the purposes of the Texas
2-45 excellence fund in an amount equal to or greater than the income
2-46 earned from investment of the higher education fund in the
2-47 preceding state fiscal year as certified by the comptroller, the
2-48 deposit to the Texas excellence fund under Subsection (a)(1) or
2-49 Subsection (c) may not be made.
2-50 SECTION 3. Subsections (b) and (d), Section 62.026,
2-51 Education Code, are amended to read as follows:
2-52 (b) The fund consists of the amount [$50 million] deposited
2-53 in the fund each state fiscal year under Section 62.025 [of this
2-54 code] and interest, dividends, and other income earned from the
2-55 investment of the fund.
2-56 (d) The comptroller shall administer and invest the fund.
2-57 In investing the fund, the comptroller has the same investment
2-58 authority as that provided under Sections 11a and 11b, Article VII,
2-59 Texas Constitution, or other law to the board of regents of The
2-60 University of Texas System with respect to the investment of the
2-61 permanent university fund. The investment authority granted to the
2-62 comptroller under this subsection is in addition to that provided
2-63 by Section 404.024, Government Code, or other law. The
2-64 comptroller, in consultation with the presiding officers of the
2-65 governing boards of the institutions eligible to benefit from the
2-66 income from the investment of the fund under Section 17, Article
2-67 VII, Texas Constitution, shall invest the fund in a manner that
2-68 maximizes the amount of income earned and gains realized from the
2-69 investment of the fund.
3-1 SECTION 4. Chapter 62, Education Code, is amended by adding
3-2 Subchapter D to read as follows:
3-3 SUBCHAPTER D. EXCELLENCE FUNDING FOR CERTAIN
3-4 PERMANENT UNIVERSITY FUND INSTITUTIONS
3-5 Sec. 62.071. DEFINITIONS. In this subchapter:
3-6 (1) "Comprehensive research university" means a
3-7 general academic teaching institution that in each of the two most
3-8 recent state fiscal years, as verified by the coordinating board:
3-9 (A) offered a full range of baccalaureate
3-10 programs and a wide variety of graduate programs;
3-11 (B) awarded 45 or more doctor of philosophy
3-12 degrees in the fields of science, agricultural science,
3-13 engineering, and clinical and experimental psychology; and
3-14 (C) expended at least $15 million in restricted
3-15 research funds and related indirect costs as reported in the
3-16 institution's annual financial report for the applicable year.
3-17 (2) "Eligible institution" means a general academic
3-18 teaching institution that is a component institution of The
3-19 University of Texas System or The Texas A&M University System,
3-20 other than The University of Texas at Austin or Texas A&M
3-21 University, eligible to participate in the funding provided by
3-22 Section 18, Article VII, Texas Constitution.
3-23 (3) "General academic teaching institution" has the
3-24 meaning assigned by Section 61.003.
3-25 Sec. 62.072. FUNDING. (a) In each state fiscal biennium,
3-26 $8,550,000 in general revenue shall be distributed to eligible
3-27 institutions in accordance with this section.
3-28 (b) For the state fiscal biennium ending August 31, 2003,
3-29 the total amount to be distributed under this section shall be
3-30 apportioned between The University of Texas System and The Texas
3-31 A&M University System based on the total amount of capital equity
3-32 funds included in the "capital equity and excellence funding"
3-33 appropriated to the eligible institutions in each system by Chapter
3-34 1589, Acts of the 76th Legislature, Regular Session, 1999 (the
3-35 General Appropriations Act), for the state fiscal biennium ending
3-36 August 31, 2001. The total amount to be distributed under this
3-37 section in each subsequent state fiscal biennium shall be
3-38 apportioned between The University of Texas System and The Texas
3-39 A&M University System based on the amount apportioned between the
3-40 systems under this subsection in the preceding state fiscal
3-41 biennium.
3-42 (c) The amount apportioned to each system under Subsection
3-43 (b) shall be allocated among the eligible institutions in that
3-44 system in accordance with an equitable allocation formula based on
3-45 the amount of restricted research funds expended by each
3-46 institution as reported in each institution's annual financial
3-47 report. In making the allocations under this subsection, the
3-48 legislature may consider that an eligible institution is or has
3-49 become a comprehensive research university and may increase the
3-50 allocation to that institution accordingly.
3-51 (d) Money received by an institution under this section may
3-52 be used only for the support and maintenance of educational and
3-53 general activities, including research and student services, that
3-54 promote increased research capacity and develop institutional
3-55 excellence at the institution.
3-56 SECTION 5. (a) For the state fiscal biennium ending August
3-57 31, 2003, $61,456,155 shall be allocated to general academic
3-58 teaching institutions, other than The University of Texas at Austin
3-59 and Texas A&M University, according to the same equitable formula
3-60 used to allocate funds under Section 62.021, Education Code. Money
3-61 received by an institution under this subsection may be used only
3-62 to promote research capacity or develop and maintain centers of
3-63 excellence at the institution. For subsequent state fiscal
3-64 biennia, $70,006,155 shall be allocated to general academic
3-65 institutions under this subsection.
3-66 (b) For the state fiscal biennium ending August 31, 2003,
3-67 $8,550,000 in general revenue shall be apportioned between The
3-68 University of Texas System and The Texas A&M University System
3-69 based on the total amount of capital equity funds included in the
4-1 "capital equity and excellence funding" appropriated to the
4-2 eligible institutions in each system by Chapter 1589, Acts of the
4-3 76th Legislature, Regular Session, 1999 (the General Appropriations
4-4 Act), for the state fiscal biennium ending August 31, 2001. The
4-5 amount of transitional assistance apportioned to each system under
4-6 this subsection shall be allocated among the eligible institutions
4-7 in that system according to the same equitable formula used to
4-8 allocate funds under Section 62.021, Education Code. This
4-9 subsection expires August 31, 2003.
4-10 SECTION 6. For the state fiscal biennium ending August 31,
4-11 2003, funds appropriated under Section 62.072, Education Code, as
4-12 added by this Act, and under Subsections (a) and (b), Section 5 of
4-13 this Act, are to be allocated from existing funds included in the
4-14 "capital equity and excellence funding" appropriated to eligible
4-15 institutions in Senate Bill No. 1, 77th Legislature, Regular
4-16 Session, 2001, as introduced.
4-17 SECTION 7. This Act takes effect September 1, 2001.
4-18 * * * * *