1-1 By: Ellis S.B. No. 1190 1-2 (In the Senate - Filed March 6, 2001; March 8, 2001, read 1-3 first time and referred to Committee on Education; April 9, 2001, 1-4 reported favorably by the following vote: Yeas 8, Nays 0; 1-5 April 9, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to technology development and transfer by institutions of 1-9 higher education. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Subtitle H, Title 3, Education Code, is amended 1-12 by adding Chapter 153 to read as follows: 1-13 CHAPTER 153. CENTERS FOR TECHNOLOGY DEVELOPMENT AND TRANSFER 1-14 Sec. 153.001. DEFINITIONS. In this chapter: 1-15 (1) "Center" means an office, department, or other 1-16 organizational unit established under this chapter. 1-17 (2) "Governing board" has the meaning assigned by 1-18 Section 61.003. 1-19 (3) "Institution of higher education" has the meaning 1-20 assigned by Section 61.003. 1-21 (4) "Organization" has the meaning assigned by Section 1-22 1.201, Business & Commerce Code. 1-23 (5) "Person" has the meaning assigned by Section 1-24 1.201, Business & Commerce Code. 1-25 (6) "Technology" means the application of scientific 1-26 knowledge for practical purposes and includes inventions, 1-27 discoveries, trade secrets, copyrighted materials, tools, machines, 1-28 materials, processes to do work, processes to produce goods, 1-29 processes to perform services, processes to carry out other useful 1-30 activities, trademarks, and computer software. 1-31 Sec. 153.002. FINDINGS. The legislature finds that: 1-32 (1) it is essential to the continued economic growth 1-33 and diversification of this state that technology development and 1-34 transfer be promoted and expanded; 1-35 (2) the students, scientists, researchers, faculty, 1-36 and staff of the institutions of higher education of this state 1-37 have developed and, in all likelihood, will continue to develop 1-38 technology that will contribute to the continued growth and 1-39 diversification of the state's economy; 1-40 (3) the electorate of this state authorized the 1-41 legislature to allow for the programs created by this chapter by 1-42 adopting Section 52-a, Article III, Texas Constitution; and 1-43 (4) an institution of higher education is authorized 1-44 to engage in technology development and transfer activities under 1-45 the authority provided to its governing board and other state and 1-46 federal law. 1-47 Sec. 153.003. CREATION OF CENTERS. (a) An institution of 1-48 higher education, subject to approval by its governing board, is 1-49 authorized to establish centers to manage, transfer, market, or 1-50 otherwise commercialize technology owned by it or in which it owns 1-51 an interest. 1-52 (b) Each center shall be administered within an institution 1-53 of higher education. 1-54 (c) Centers may provide services to multiple institutions of 1-55 higher education. An institution of higher education may contract 1-56 with a center under the control of a governing board other than its 1-57 own. 1-58 Sec. 153.004. OPERATION OF CENTERS. (a) To the extent 1-59 authorized by its governing board, an institution of higher 1-60 education, through a center established under this chapter, may: 1-61 (1) accept and administer funds, including state 1-62 appropriations, gifts, grants, contracts, and donations, to aid in 1-63 the establishment, maintenance, and operation of the center or to 1-64 aid in the discovery, development, protection, or commercialization 2-1 of technology; 2-2 (2) solicit and enter into agreements to fund the 2-3 discovery, development, protection, and commercialization of 2-4 technology; 2-5 (3) make technology owned or controlled by it 2-6 available to persons for commercial applications through license 2-7 agreements, assignments, or other forms of transfer; 2-8 (4) acquire interests in and ownership of technology; 2-9 (5) provide business, scientific, and engineering 2-10 services and technical assistance to persons engaged in the 2-11 development, manufacture, or marketing of technology in which it 2-12 owns an interest; 2-13 (6) acquire insurance and pay premiums on insurance of 2-14 any kind and in amounts considered necessary and advisable to 2-15 accomplish the purposes of this chapter; 2-16 (7) establish and operate corporations, either for 2-17 profit or not for profit, and limited liability companies for the 2-18 development and commercialization of technology and convey equity 2-19 interests in such entities; and 2-20 (8) engage in other related activities required to 2-21 achieve the purposes of this chapter. 2-22 (b) Property and services of institutions of higher 2-23 education may be used to achieve the purposes of this chapter. 2-24 Sec. 153.005. PROGRAMS. (a) To the extent authorized by 2-25 its governing board, an institution of higher education, through a 2-26 center, may operate programs to provide assistance to persons in 2-27 commercializing technology owned by it or in which it has an 2-28 interest. Assistance may include providing monetary support or 2-29 nonmonetary support, including the use of premises, computers, 2-30 computer software, telecommunications terminal equipment, office 2-31 equipment and supplies, machinery, custodial services, utilities, 2-32 or other services that are customarily treated as overhead expenses 2-33 by institutions of higher education. 2-34 (b) The policies and procedures to be used by an institution 2-35 of higher education to assess the qualifications of persons 2-36 participating in a center's programs, including objective criteria 2-37 for admission and for the measurement of progress and standards for 2-38 continuance or termination of participation, shall be approved by 2-39 the institution's governing board. 2-40 Sec. 153.006. SUPPORT OF CENTERS. In order to carry out the 2-41 purposes of this chapter and to support the activities of centers 2-42 described in this chapter, to the extent authorized by its 2-43 governing board, an institution of higher education may: 2-44 (1) enter into agreements establishing royalties, 2-45 fees, and other consideration for technology developed in whole or 2-46 part by it; 2-47 (2) accept equity interests in organizations that 2-48 license, manage, or otherwise administer rights to technology 2-49 belonging to it or under its control in exchange for such rights, 2-50 in whole or in part; 2-51 (3) accept equity interests in organizations that 2-52 license or otherwise have rights in its technology as consideration 2-53 for its providing monetary, business, scientific, or engineering 2-54 services or technical assistance; 2-55 (4) use income from the commercialization of 2-56 technology to fund the activities of the center; 2-57 (5) solicit, accept, and administer gifts, grants, and 2-58 donations; and 2-59 (6) enter into such other business arrangements as may 2-60 be appropriate for achieving the purposes of this chapter. 2-61 Sec. 153.007. NO FIDUCIARY DUTY. Except as otherwise 2-62 provided by law, a governing board, an institution of higher 2-63 education, a university system, a center, or any employee or member 2-64 of those entities does not owe a fiduciary duty to any person 2-65 claiming an interest in consideration received by a university 2-66 system or an institution of higher education in exchange for 2-67 technology. 2-68 SECTION 2. This Act takes effect September 1, 2001. 3-1 * * * * *