78R7122 KSD-D


By:  Hamric, Heflin, Thompson,                                    H.B. No. 3526
 
    Moreno of Harris, Woolley, et al.                                        


A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the research development fund to promote research at certain institutions of higher education and to the abolition of the Texas excellence fund and the university research fund. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. The heading to Chapter 62, Education Code, is amended to read as follows:
CHAPTER 62. DIVISION OF CONSTITUTIONALLY APPROPRIATED FUNDS AMONG CERTAIN INSTITUTIONS OF HIGHER EDUCATION; RESEARCH DEVELOPMENT FUND
SECTION 2. Chapter 62, Education Code, is amended by adding Subchapter E to read as follows:
SUBCHAPTER E. RESEARCH DEVELOPMENT FUND
Sec. 62.091. PURPOSE. The research development fund is established to provide funding to promote increased research capacity at eligible general academic teaching institutions. Sec. 62.092. DEFINITIONS. In this subchapter: (1) "Coordinating board" means the Texas Higher Education Coordinating Board. (2) "Eligible institution" means a general academic teaching institution, as defined by Section 61.003, other than The University of Texas at Austin, Texas A&M University, or Prairie View A&M University. Sec. 62.093. ADMINISTRATION. (a) The research development fund is a fund outside the state treasury in the custody of the comptroller. (b) The comptroller shall administer and invest the research development fund. Sec. 62.094. FUNDING. (a) The research development fund consists of the amount deposited to the credit of the fund under Section 62.025 in each state fiscal year, the amount appropriated or transferred to the credit of the fund by the legislature under Subsection (b), and any other amounts transferred to the fund under this section. (b) In each state fiscal year, the legislature may appropriate or provide for the transfer to the credit of the research development fund of an amount not less than the amount deposited to the credit of the fund under Section 62.025 in that fiscal year. (c) The comptroller shall deposit all interest, dividends, and other income earned from investment of the research development fund to the credit of the fund. (d) The comptroller may accept gifts or grants from any public or private source for the research development fund. Sec. 62.095. APPORTIONMENT OF FUND TO ELIGIBLE INSTITUTIONS. (a) In each state fiscal year, the comptroller shall distribute the total amount of all assets in the research development fund to eligible institutions. The amount shall be apportioned among the eligible institutions based on the average amount of restricted research funds expended by each institution per year for the three preceding state fiscal years. (b) For purposes of Subsection (a), the amount of restricted research funds expended by an institution in a fiscal year is the amount of those funds as reported to the coordinating board by the institution for that fiscal year, subject to any adjustment by the coordinating board in accordance with the standards and accounting methods the coordinating board prescribes under Section 62.096. Sec. 62.0951. APPORTIONMENT OF FUND IN 2006–2007 FISCAL BIENNIUM. (a) This section applies to the apportionment of the research development fund in each state fiscal year of the state fiscal biennium ending August 31, 2007. (b) In a state fiscal year to which this section applies, if under the apportionment method prescribed by Section 62.095 an eligible institution that received money from the university research fund in the state fiscal year ending August 31, 2005, would be entitled to receive from the research development fund an amount that is less that 50 percent of the amount distributed to the institution from the university research fund in the state fiscal year ending August 31, 2005, the comptroller shall increase the amount apportioned to that institution from the research development fund to an amount equal to 50 percent of the amount distributed to the institution from the university research fund in the state fiscal year ending August 31, 2005. (c) After apportioning the amount prescribed by Subsection (b) to each eligible institution to which Subsection (b) applies, the comptroller shall apportion the remaining amount to be distributed from the research development fund in that fiscal year to the remaining eligible institutions in proportion to the amounts the institutions would be entitled to receive in that fiscal year under the apportionment method prescribed by Section 62.095. (d) This section expires January 1, 2008. Sec. 62.096. VERIFICATION OF ALLOCATION FACTORS. (a) For purposes of this subchapter, the coordinating board shall prescribe standards and accounting methods for determining the amount of restricted research funds expended by an eligible institution in a state fiscal year. (b) The coordinating board, as soon as practicable in each state fiscal year, shall provide the comptroller with verified information relating to the amounts of restricted research funds expended by eligible institutions as necessary to determine the apportionment of the research development fund under this subchapter for that fiscal year. (c) The coordinating board may audit the appropriate records of an eligible institution to verify information for purposes of this subchapter. Sec. 62.097. USE OF ALLOCATED AMOUNTS. (a) An eligible institution may use money received from the research development fund only for the support and maintenance of educational and general activities, including research and student services, that promote increased research capacity at the institution. (b) Money received by an institution from the research development fund in a fiscal year that is not used by the institution in that fiscal year may be held and used by the institution in subsequent fiscal years. Sec. 62.098. ANNUAL REPORT. (a) Each eligible institution that receives money under this subchapter in a state fiscal year shall prepare a report at the end of that fiscal year describing the manner in which the institution used the money. The institution shall include in the report information regarding the use of money spent in that fiscal year that was received under this subchapter in a preceding fiscal year. (b) The institution shall deliver a copy of the report to the coordinating board and the Legislative Budget Board not later than December 1 after the end of the fiscal year. The Legislative Budget Board may establish requirements for the form and content of the report. (c) The institution shall include in the report information on the use or other disposition of money the institution previously received from the Texas excellence fund or the university research fund, if the institution spent money from either of those funds in the fiscal year of the report. SECTION 3. Sections 62.025(a), (c), and (e), Education Code, are amended to read as follows: (a) Not later than November 1 of each state fiscal year, the comptroller shall deposit the first $50 million that comes to the state at the beginning of each state fiscal year and that is not dedicated by other law as follows: (1) except as provided by Subsection [Subsections (d) and] (e), an amount equal to the portion of the total return on all investment assets of the higher education fund in the preceding state fiscal year computed by multiplying that total return by the percentage of the total return on all investment assets of the permanent fund for tobacco education and enforcement that constitutes available earnings as determined by the comptroller under Section 403.1068, Government Code, in that year must be deposited to the credit of the research development [Texas excellence] fund established under Subchapter E [C]; and (2) the remaining amount must be deposited to the credit of the higher education fund. (c) The deposit required by this section to the higher education fund expires on September 1 after the date the comptroller certifies that the value of the higher education fund is $2 billion. In each state fiscal year that begins on or after that date, the comptroller shall deposit to the credit of the research development [Texas excellence] fund established under Subchapter E [C] from the first money that comes to the state at the beginning of that fiscal year an amount, not to exceed $50 million, equal to the portion of the total return on all investment assets of the higher education fund in the preceding state fiscal year computed by multiplying that total return by the percentage of the total return on all investment assets of the permanent fund for tobacco education and enforcement that constitutes available earnings as determined by the comptroller under Section 403.1068, Government Code. (e) An amount may not be deposited to the research development [Texas excellence] fund under this section if Subchapter E [C] expires or is repealed or if the research development [Texas excellence] fund is abolished. SECTION 4. The following laws are repealed: (1) Section 62.025(d), Education Code; (2) Subchapter C, Chapter 62, Education Code; and (3) Subchapter D, Chapter 62, Education Code. SECTION 5. (a) The first distribution of money from the research development fund established by this Act shall be made in the state fiscal year beginning September 1, 2005. (b) On and after the effective date of this Act, any amount remaining in or payable to the credit of the Texas excellence fund or the university research fund shall be transferred to the credit of the research development fund established by this Act. SECTION 6. This Act takes effect September 1, 2005.