Amend CSHB 7 by adding an appropriately numbered new SECTION 
to the bill and renumbering subsequent SECTIONS accordingly, to 
read as follows:
	SECTION ____.  Section 54.0513, Education Code, is amended 
to read as follows:
	(a)  Except as otherwise provided in this section, Iin 
addition to amounts that a governing board of an institution of 
higher education is authorized to charge as tuition under the other 
provisions of this chapter, the governing board, under the terms 
the governing board considers appropriate, may charge any student 
an amount designated as tuition that the governing board considers 
necessary for the effective operation of the institution.
	(b)  A governing board may set a different tuition rate for 
each program and course level offered by each institution of higher 
education.  A governing board may set a different tuition rate as 
the governing board considers appropriate to increase graduation 
rates, encourage efficient use of facilities, or enhance employee 
performance.
	(c)  The maximum amount of tuition that may be charged under 
this section to a resident or nonresident student is the average 
amount of tuition charged to a full-time student of comparable 
residency status enrolled for a comparable semester or term of the 
preceding academic year at the peer institutions listed in 
Subsection (d), adjusted to reflect any change in the consumer 
price index for all urban consumers, for all items and all regions 
of the United States, as published by the United States Department 
of Labor, Bureau of Labor Statistics, or a successor national index 
of the change in consumer prices, for the most recent year for which 
the index is available.  The maximum amount of tuition is determined 
by weighting the tuition charged by each peer institution equally, 
without weighting by student enrollment.
	(d)  The peer institutions to be used in computing the 
maximum amount of tuition under this section are:
		(1)  the University of California at Berkeley;                         
		(2)  the University of California at Los Angeles;                      
		(3)  the University of Illinois at Urbana-Champaign;                   
		(4)  Indiana University at Bloomington;                                
		(5)  the University of Michigan -- Ann Arbor;                          
		(6)  Michigan State University;                                        
		(7)  the University of Minnesota;                                      
		(8)  the University of North Carolina at Chapel Hill;                  
		(9)  Ohio State University, Main Campus;                               
		(10)  the University of Washington; and                                
		(11)  the University of Wisconsin -- Madison.                          
	(e)  The coordinating board shall determine the maximum 
amount of tuition that may be charged to a resident or nonresident 
student under this section for each semester or term and report 
those amounts to the governing board of each institution of higher 
education to which this section applies as early as practicable 
before the semester or term begins.  The coordinating board may 
require the governing board of an institution to which this section 
applies to obtain for the coordinating board any information the 
coordinating board requires to administer this section.
	(c) (f)  Amounts collected by an institution of higher 
education under this section are institutional funds as defined by 
Section 51.009 of this code and shall be accounted for as designated 
funds.  These funds shall not be accounted for in a general 
appropriations act in such a way as to reduce the general revenue 
appropriation to a particular institution.
	(d) (g)  A governing board may waive all or part of the 
tuition charged to a student under this section if it finds that the 
payment of such tuition would cause an undue economic hardship on 
the student.
	(e) (h)  Section 56.033 of this code requiring certain 
percentage amounts of tuition to be set aside for grants and 
scholarships does not apply to tuition collected under this 
section.
	(f) (i)  A governing board of an institution of higher 
education may continue to charge as tuition under this section the 
amount that it charged as the building use fee at that institution 
in the 1996-1997 academic year without holding a public hearing, 
but may not increase tuition under this section above that amount 
without holding a public hearing.