TO: | Honorable David Dewhurst , Lieutenant Governor, Senate Honorable Joe Straus, Speaker of the House, House of Representatives |
FROM: | John S. O'Brien, Director, Legislative Budget Board |
IN RE: | HB51 by Branch (relating to measures to enhance and maintain the quality of state universities, including funding and incentives to support emerging public research universities, to the abolition of the higher education fund, to the institutional groupings under the Texas Higher Education Coordinating Board's accountability system, to the independent status of Lamar Institute of Technology, to research conducted by public universities and other state entities, and to the authorization of revenue bonds for certain institutions of higher education.), Conference Committee Report |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2010 | ($147,475,225) |
2011 | ($151,490,427) |
2012 | ($151,490,427) |
2013 | ($151,490,427) |
2014 | ($151,490,427) |
Fiscal Year | Probable (Cost) from General Revenue Fund 1 |
---|---|
2010 | ($147,475,225) |
2011 | ($151,490,427) |
2012 | ($151,490,427) |
2013 | ($151,490,427) |
2014 | ($151,490,427) |
Fiscal Year | Change in Number of State Employees from FY 2009 |
---|---|
2010 | 3.0 |
2011 | 3.0 |
2012 | 3.0 |
2013 | 3.0 |
2014 | 3.0 |
The fiscal note will be broken out by each section of the bill.
Section 1 of the bill would require each institution of higher education designated as a research university or emerging research university to submit to the Higher Education Coordinating Board, a detaile, long-term strategic plan documenting the strategy by which the institution intends to achieve recognition as a research university, or enhance the university's reputationo as a research university as applicable.
Section 2, 3 and 4 of the bill would amend the Education Code to grant additional authority to the Board of Regents of the Texas A&M University System to issue additional tuition revenue bonds for Texas A&M University at Galveston in an amount not to exceed $5,000,000 to acquire, purchase, construct, improve, renovate, enlarge, or equip property, buildings, structures, facilities, roads or related infrastructure, for an erosion control breakwater, a dock, or other related purpose reasonably necessary to assist the institution to recover from any damage or other impact caused by Hurricane Ike. This authority would include the irrevocable pledging of revenue for the payment for bonds and transfer of funds from other institutions within the Texas A&M University System.
The sections would also amend the Education Code to grant authority to the Board of Regents of the University of Texas System to issue additional tuition revenue bonds for the recovery and reconstruction of the University of Texas Medical Branch at Galveston (UTMB) in an amount not to exceed $150,000,000. This authority would include the irrevocable pledging of revenue for the payment for bonds and transfer of funds, subject to Legislative Budget Board (LBB) approval, from other institutions within The UT System. In determining approval, the LBB must consider whether the commissioners’ court in the county in which UTMB is located has entered into an agreement with UTMB for costs to provide unreimbursed healthcare or whether the county has imposed an ad valorem tax for healthcare purposes. According to The UT System, The UT Board of Regents has already approved Hurricane Ike Recovery projects and the John Sealy Hospital Modernization project.
Although tuition income is pledged against the bonds, historically the Legislature has appropriated General Revenue to reimburse institutions for the tuition used to pay the debt service. This note assumes the Legislature would continue this policy. The provisions of the bill would exempt these bonds from oversight of the Texas Higher Education Coordinating Board.
Section 5 would require the Higher Education Coordinating Board, as part of other funding recommendations, to determine the amount the Board considers appropriate for funding for excellence in specific programs and fields at general academic teaching institutions.
Section 6 would establish an Excellence Awards program for institutions other than research universities or emerging research universites to encourage the development of designated degree programs to the highest national standards. The Texas Higher Education Coordinating Board (THECB) would be authorized to release Excellence Award funding only when certain benchmarks are met.
Section 7 would require the Higher Education Coordinating Board review the institutional groupings under the Board's accountability system at least once every ten years.
Section 8 and Section 9 would amend Chapter 62 of the Education Code relating to the Research Development Fund.
Section 10 and 11 of the bill would provide two separate reallocations of the Higher Education Fund (HEF) for fiscal years 2009 through 2014, and would not change the total amounts appropriated to the HEF in any of the fiscal years this bill would affect. However, individual institutions of higher education would be affected based on the dollar outcome generated by the updated HEF formula.
The first reallocation would apply to fiscal years 2009 and 2010. To maintain an equitable distribution
basis for the HEF, this reallocation would correct certain errors in the existing HEF allocation. This
reallocation would also provide additional HEF funds to those institutions that were under-allocated
previously by reducing the allocation of previously over-allocated institutions.
The second reallocation would apply to the second half of the HEF's decennial period (fiscal years
2011 - 2014), and is based on a corrected allocation using updated data elements.
The bill would specify the University of North Texas at Dallas is entitled to participate in the HEF
reallocation as soon as the UNT component operates as a general academic teaching institution.
Starting in fiscal year 2011, this bill would also provide separate HEF allocations to the Lamar
Institute of Technology, and would direct the Comptroller to adjust the HEF allocations accordingly.
Section 12, Subchapter C, Research University Development Fund. Under this section the Higher Education Coordinating Board would distribute funds to eligible research and emerging research universities based on the average amount of total research funds expended by each institution annually during the three most recent fiscal years according to rates specified in the bill.
Section 12, Subchapter D, Performance Incentive Funding, provides a mechanism for performance incentive funding for general academic teaching institutions. The funding would be allocated on a 50/50 split under guidelines established in the bill. Using a table of weights with combinations of noncritical/critical fields and not at-risk/at-risk students, general academic institutions qualify for incentive funds in proportion to the increase in the average number of degrees awarded annually in the two most recent fiscal years compared to the two immediately preceding years. Noncritical field/Not at-risk Student is weighted at 1.0; Critical field/at-risk Student is weighted at 3.0. Statutory critical fields include engineering, computer science, math, physical science, allied health, nursing, and teach certification in science or math.
Section 12 Subchapter F, Texas Research Incentive Program. Under provisions of this section, the Higher Education Coordinating Board would develop and administer the Texas Research Incentive Program to provide matching funds to assist eligible insitutions in leveraging private gifts or endowments for the enhancement of research productivity and faculty recruitment.
Section 13, Subchapter G, National Research University Fund. Contingent upon voter approval of a Texas Constitutional amendment proposed by the 81st Texas Legislature, the bill would create a new source of funding to enhance research capacity at certain public general academic institutions using the investment earnings of an existing but rededicated fund corpus (i.e., the Permanent Higher Education Fund, which would become the corpus for the National Research University Fund, or NRUF). Annual NRUF allocations to eligible institutions would be based solely on the earnings of the NRUF corpus over time.
Section 14 amends Section 62.094 of the Education Code as it relates to the Research Development Fund.
Section 15 amends Section 96.703(a) of the Education Code as it relates to Lamar Institute of Technology.
Section 16 repeals Section 62.025 and 62.026 of the Education Code dealing with the Research Development Fund and Higher Education Fund respectively.
Section 17 repeals Section 96.703(c) of the Education Code dealing with the Board of Regents of the Texas State University System expending funds allocated to Lamar Institute of Technology under Section 17, Article VII of the Texas Constitution.
Under Section 18, a select committee would be created to study the feasibility of collecting data and maintaining a searchable electronic database to track specialized technology research projects conducted by public universities, public university research facilities, and other state institutions. The committee would include representatives from the institutions specified in the bill and from the Higher Education Coordinating Board. The committee would report their findings and recommendations to the lieutenant governor, the speaker of the house of representatives and the governor by December 1, 2010. The committee would be abolished on January 16, 2011. Provisions of the bill would be implemented within existing resources.
The remaining sections deal with the Higher Education Coordinating Board adopting rules to implement various sections of the bill and the effective dates of the legislation.
Source Agencies: | 781 Higher Education Coordinating Board, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 769 University of North Texas System Administration, 783 University of Houston System Administration, 768 Texas Tech University System Administration
|
LBB Staff: | JOB, KK, RT, GO, SSh
|