By: Branch H.B. No. 4453
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the national research university fund and the
  allocation of amounts appropriated from the fund, the abolition of
  the higher education fund, and the institutional groupings
  established by the Texas Higher Education Coordinating Board.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter C, Chapter 61, Education Code, is
  amended by adding Section 61.0904 to read as follows:
         Sec. 61.0904.  INSTITUTIONAL GROUPINGS. (a)  In its
  accountability system, the board shall establish institutional
  groupings for classification of institutions of higher education,
  including a grouping for research universities, emerging research
  universities, doctoral universities, comprehensive universities,
  and masters universities.
         (b)  In each state fiscal biennium, the board shall conduct a
  review of the institutional groupings, including a review of the
  criteria for and definitions assigned to those groupings.
         SECTION 2.  The heading to Chapter 62, Education Code, is
  amended to read as follows:
  CHAPTER 62.  CONSTITUTIONAL AND STATUTORY [DIVISION OF
  CONSTITUTIONALLY APPROPRIATED] FUNDS TO SUPPORT [AMONG CERTAIN]
  INSTITUTIONS OF HIGHER EDUCATION[; RESEARCH DEVELOPMENT FUND]
         SECTION 3.  Chapter 62, Education Code, is amended by adding
  Subchapter D to read as follows:
  SUBCHAPTER D. NATIONAL RESEARCH UNIVERSITY FUND
         Sec. 62.071.  PURPOSE.  The purpose of this subchapter is to
  allocate appropriations from the national research university fund
  to provide a dedicated, independent, and equitable source of
  funding to enable emerging research universities in this state to
  achieve national prominence as major research universities.
         Sec. 62.072.  DEFINITIONS.  In this subchapter:
               (1)  "Coordinating board" means the Texas Higher
  Education Coordinating Board.
               (2)  "Eligible institution" means a general academic
  teaching institution that is eligible to receive distributions of
  money under this subchapter.
               (3)  "Fund" means the national research university
  fund.
               (4)  "General academic teaching institution" has the
  meaning assigned by Section 61.003.
         Sec. 62.073.  ADMINISTRATION AND INVESTMENT OF FUND.
  (a)  The national research university fund is a fund outside the
  state treasury in the custody of the comptroller.
         (b)  The comptroller shall administer and invest the fund in
  accordance with Section 20, Article VII, Texas Constitution.
         Sec. 62.074.  FUNDING.  (a)  The fund consists of any
  amounts appropriated or transferred to the credit of the fund under
  the Texas Constitution or otherwise appropriated or transferred to
  the credit of the fund under this section or another law.
         (b)  The comptroller shall deposit to the credit of the fund
  all interest, dividends, and other income earned from investment of
  the fund.
         (c)  The comptroller may accept gifts or grants from any
  public or private source for the fund.
         Sec. 62.075.  ELIGIBILITY TO RECEIVE DISTRIBUTIONS FROM
  FUND. (a)  A general academic teaching institution is eligible to
  receive a distribution of money under this subchapter for each year
  of a state fiscal biennium if:
               (1)  the institution is designated as an emerging
  research university under the coordinating board's accountability
  system;
               (2)  in each of the two state fiscal years preceding the
  state fiscal biennium, the institution reported at least $45
  million in restricted research expenditures;
               (3)  the aggregate value of the institution's endowment
  funds is at least $500 million; and
               (4)  the institution satisfies at least two of the
  following criteria:
                     (A)  at least 200 doctor of philosophy degrees
  were awarded by the institution during each of the two academic
  years preceding the state fiscal biennium;
                     (B)  the entering freshman class for each of those
  two academic years demonstrated high academic achievement, as
  determined according to standards prescribed by the coordinating
  board;
                     (C)  designated as an American Research Library or
  has a Phi Beta Kappa chapter; and
                     (D)  the faculty of the institution for each of
  those two academic years was of high quality, as determined
  according to coordinating board standards based on the professional
  achievement and recognition of the institution's faculty,
  including the election of faculty members to national academies.
         (b)  A general academic teaching institution that becomes
  eligible under Subsection (a) to receive a distribution of money
  under this subchapter remains eligible to receive a distribution of
  money under this subchapter in each subsequent state fiscal year.
         Sec. 62.076.  INELIGIBILITY OF INSTITUTIONS RECEIVING
  PERMANENT UNIVERSITY FUND SUPPORT AND MAINTENANCE. The University
  of Texas at Austin, Texas A&M University, and Prairie View A&M
  University are ineligible to receive money under this subchapter.
         Sec. 62.077.  ALLOCATION OF APPROPRIATED FUNDS TO ELIGIBLE
  INSTITUTIONS. In each state fiscal year, the comptroller shall
  distribute to eligible institutions the total amount appropriated
  from the fund for that fiscal year. The amount allocated to the
  eligible institutions shall be based on an equitable formula
  adopted by the legislature to carry out the purposes of the fund as
  established by Section 20, Article VII, Texas Constitution. The
  coordinating board may make recommendations regarding the formula
  and provide such assistance as directed by the legislature.
         Sec. 62.078.  USE OF ALLOCATED AMOUNTS. (a)  An eligible
  institution may use money received under this subchapter only for
  the support and maintenance of educational and general activities
  that promote increased research capacity at the institution.
         (b)  For purposes of Subsection (a), permitted activities
  include the use of the money to:
               (1)  provide faculty support and pay faculty salaries;
               (2)  purchase equipment or library materials;
               (3)  pay graduate stipends; and
               (4)  support research performed at the institution,
  including undergraduate research.
         (c)  Money received in a fiscal year by an institution under
  this subchapter that is not used in that fiscal year by the
  institution may be held and used by the institution in subsequent
  fiscal years for the purposes prescribed by this section.
         Sec. 62.079.  VERIFICATION OF FACTORS. (a)  For purposes of
  this subchapter, the coordinating board shall prescribe standards
  and accounting methods for determining the value of the factors to
  establish the eligibility of an institution in a state fiscal year.
         (b)  The coordinating board, as soon as practicable in each
  even-numbered year no later than December 31, shall provide the
  legislature with verified information relating to the value of the
  factors to establish eligible institutions for the national
  research university fund under this subchapter.
         (c)  The coordinating board in consultation with the State
  Auditor's Office shall validate the appropriate measures of an
  eligible institution to verify the reported values of the factors
  for purposes of this subchapter.
         SECTION 4.  Section 62.094, Education Code, is amended to
  read as follows:
         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 appropriated or transferred
  to the credit of the fund under this section or other law.
         (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.
         (c) [(d)]  The comptroller may accept gifts or grants from
  any public or private source for the research development fund.
         SECTION 5.  Sections 62.025 and 62.026, Education Code, are
  repealed.
         SECTION 6.  This Act takes effect January 1, 2010, but only
  if the constitutional amendment proposed by the 81st Legislature,
  Regular Session, 2009, establishing the national research
  university fund to enable emerging research universities in this
  state to achieve national prominence as major research universities
  and transferring the balance of the higher education fund to the
  national research university fund is approved by the voters. If
  that constitutional amendment is not approved by the voters, this
  Act does not take effect.