78R1544 KEL-D

By:  Hamric                                                       H.B. No. 1824



A BILL TO BE ENTITLED

AN ACT

relating to adjusting formula funding for institutions of higher 
education to account for differences between estimated and actual 
receipts of educational and general funds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 61.059(c), Education Code, is amended to 
read as follows:
	(c)  Formulas for basic funding shall reflect the role and 
mission of each institution, shall emphasize funding elements that 
directly support faculty, [and] shall reflect both fixed and 
variable elements of cost, and shall include a positive or negative 
adjustment, as appropriate, of the estimated amount of educational 
and general funds to be received by an institution for the biennium 
for which the formulas are established, to account for the 
institution's reconciliation of those funds for the preceding 
biennium as computed and reported under Section 61.065.
	SECTION 2.   Section 61.065, Education Code, is amended by 
adding Subsections (c) and (d) to read as follows:
	(c)  The board shall adopt a uniform system of financial 
accounting  of all educational and general funds received by an 
institution of higher education, including tuition, laboratory 
fees, student teaching fees, organized activity fees, proceeds from 
the sale of educational and general equipment, and indirect cost 
recovery fees received by an institution.  The system must require 
each institution to reconcile the estimated amount of educational 
and general funds used to determine state appropriations for the 
institution for the most recently completed state fiscal biennium 
to the actual amount of educational and general funds that the 
institution received during that biennium.
	(d)  Each institution shall report its reconciliation under 
Subsection (c) to the board, the comptroller, and the Legislative 
Budget Board at the time required by the board.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.