By:  Morrison, Chavez, Mercer                                     H.B. No. 1887



A BILL TO BE ENTITLED

AN ACT

relating to funds received by institutions of higher education to 
cover overhead expenses of conducting research.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 145.001(c), Education Code, is amended 
to read as follows:
	(c)  The funds retained by a defined institution under 
Subsection (b) may not be accounted for in an appropriations act in 
such a way as to reduce [In the General Appropriations Act, the 
legislature may adopt a method of funding provision that provides 
for the application of certain locally generated funds to] the 
general revenue funds to be appropriated to a general academic 
teaching institution or a medical or dental unit [in such a way as 
to reduce the general revenue to be appropriated to it].  The 
retained funds are subject to the following requirements [If such a 
provision is adopted, it is specifically provided]:
		(1)  the funds [that no more than 50 percent of funds 
received by a general academic teaching institution or a medical or 
dental unit for paying overhead costs may be so applied;
		[(2)  that no less than 50 percent of the funds that are 
retained but not applied to reduce general revenue appropriations] 
shall be expended under guidelines approved by the institution's 
governing board for projects encouraging further research at the 
unit, agency, or department level at which the research was 
conducted, including:
			(A)  conducting early pregrant feasibility 
studies;                        
			(B)  preparing competitive proposals for 
sponsored programs;               
			(C)  providing carryover funding for research 
teams to provide continuity between externally funded projects;
			(D)  supporting new researchers pending external 
funding;                  
			(E)  engaging in research programs of critical 
interest to the general welfare of the citizens of this state;
			(F)  purchasing capital equipment directly 
related to expanding the research capability of the institution;  
and
			(G)  research or project administrative costs;  
and                        
		(2) [(3)  that] the [retained] funds [not applied to 
reduce general revenue appropriations] remaining after the 
application of Subdivision (1) shall [(2) of this subsection will] 
be used by a general academic teaching institution or a medical or 
dental unit to support research as approved by a general academic 
teaching institution or a medical or dental unit.
	SECTION 2.  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.