H.B. No. 1000
 
 
 
 
AN ACT
  relating to the distribution of money appropriated from the
  national research university fund; making an appropriation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 62.145(a), Education Code, is amended to
  read as follows:
         (a)  A general academic teaching institution becomes [is]
  eligible to receive an initial [a] distribution of money
  appropriated under this subchapter for a state fiscal [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 year for which the appropriation is made [biennium],
  the institution expended at least $45 million in restricted
  research funds; and
               (3)  the institution satisfies at least four of the
  following criteria:
                     (A)  the value of the institution's endowment
  funds is at least $400 million in each of the two state fiscal years
  preceding the state fiscal year for which the appropriation is
  made;
                     (B)  the institution awarded at least 200 doctor
  of philosophy degrees during each of the two academic years
  preceding the state fiscal year for which the appropriation is made 
  [biennium];
                     (C)  the entering freshman class of the
  institution for each of those two academic years demonstrated high
  academic achievement, as determined according to standards
  prescribed by the coordinating board by rule, giving consideration
  to the future educational needs of the state as articulated in the
  coordinating board's "Closing the Gaps" report;
                     (D)  the institution is designated as a member of
  the Association of Research Libraries or has a Phi Beta Kappa
  chapter or has received an equivalent recognition of research
  capabilities and scholarly attainment as determined according to
  standards prescribed by the coordinating board by rule;
                     (E)  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;
  and
                     (F)  for each of those two academic years, the
  institution has demonstrated a commitment to high-quality graduate
  education, as determined according to standards prescribed by the
  coordinating board by rule, including standards relating to the
  number of graduate-level programs at the institution, the
  institution's admission standards for graduate programs, and the
  level of institutional support for graduate students.
         SECTION 2.  Section 62.146, Education Code, is amended to
  read as follows:
         Sec. 62.146.  ACCOUNTING STANDARDS; VERIFICATION OF
  INFORMATION. (a) The coordinating board by rule shall prescribe
  standard methods of accounting and standard methods of reporting
  information for the purpose of determining:
               (1)  the eligibility of institutions under Section
  62.145; and
               (2)  the amount of restricted research funds expended
  by an eligible institution in a state fiscal year.
         (b)  As soon as practicable in each state fiscal 
  [even-numbered] year, based on information submitted by the
  institutions to the coordinating board as required by the
  coordinating board, the coordinating board shall certify to the
  comptroller and the legislature verified information relating to
  the criteria established by Section 62.145 to be used to determine
  which institutions are [initially] eligible for distributions of
  money from the fund.
         (c)  Information submitted to the coordinating board by
  institutions for purposes of establishing eligibility under this
  subchapter and the coordinating board's certification or
  verification of that information under this section [subsection]
  are subject to a mandatory audit by the state auditor in accordance
  with Chapter 321, Government Code. The coordinating board may also
  request one or more audits by the state auditor as necessary or
  appropriate at any time after an eligible institution begins
  receiving distributions under this subchapter. Each audit must be
  based on an examination of all or a representative sample of the
  restricted research funds awarded to the institution and the
  institution's expenditures of those funds, and must include, among
  other elements:
               (1)  verification of the amount of restricted research
  funds expended by the institution in the appropriate state fiscal
  year or years; and
               (2)  verification of compliance by the institution and
  the coordinating board with the standard methods of accounting and
  standard methods of reporting prescribed by the coordinating board
  under Subsection (a), including verification of:
                     (A)  the institution's compliance with the
  coordinating board's standards and accounting methods for
  reporting expenditures of restricted research funds; and
                     (B)  whether the institution's expenditures meet
  the coordinating board's definition of restricted research
  expenditures.
         (d)  From money appropriated from the fund, the comptroller
  shall reimburse the state auditor for the expenses of any audits
  conducted under Subsection (c).
         SECTION 3.  Section 62.148, Education Code, is amended to
  read as follows:
         Sec. 62.148.  DISTRIBUTION [ALLOCATION] OF APPROPRIATED
  FUNDS TO ELIGIBLE INSTITUTIONS. (a) In each state fiscal year, the
  comptroller shall distribute to eligible institutions in
  accordance with this section money [the total amount] appropriated
  from the fund for that fiscal year.
         (b)  The total amount appropriated from the fund for any
  state fiscal year may not exceed an amount equal to 4.5 percent of
  the average net market value of the investment assets of the fund
  for the 12 consecutive state fiscal quarters ending with the last
  quarter of the preceding state fiscal year, as determined by the
  comptroller.
         (b-1)  For purposes of Subsection (b), for a state fiscal
  quarter that includes any period before the fund was established on
  January 1, 2010, a reference to the average net market value of the
  investment assets of the fund includes the average net market value
  of the investment assets of the former higher education fund for the
  applicable state fiscal quarter.  This subsection expires January
  1, 2014.
         (c)  Subject to Subsection (e), of the total amount
  appropriated from the fund for distribution in a state fiscal year,
  each eligible institution is entitled to a distribution in an
  amount equal to the sum of:
               (1)  one-seventh of the total amount appropriated; and
               (2)  an equal share of any amount remaining after
  distributions are calculated under Subdivision (1), not to exceed
  an amount equal to one-fourth of that remaining amount.
         (d)  The comptroller shall retain within the fund any portion
  of the total amount appropriated from the fund for distribution
  that remains after all distributions are made for a state fiscal
  year as prescribed by Subsection (c). The appropriation of that
  retained amount lapses at the end of that state fiscal year.
         (e)  If the number of institutions that are eligible for
  distributions in a state fiscal year is more than four, each
  eligible institution is entitled to an equal share of the total
  amount appropriated from the fund for distribution in that fiscal
  year.
         (f)  For purposes of this section, the total amount
  appropriated from the fund for distribution in a state fiscal year
  does not include any portion of the amount appropriated that is used
  to reimburse the costs of an audit conducted under Section
  62.146(c) [The amount shall be allocated to the eligible
  institutions 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.     In adopting the
  allocation formula, the legislature may consider the
  recommendations of the coordinating board, including
  recommendations on the appropriate elements and relative weights of
  elements of the formula].
         SECTION 4.  For each fiscal year of the state fiscal biennium
  ending August 31, 2013, the maximum amount permitted by Section 20,
  Article VII, Texas Constitution, and by Section 62.148(b),
  Education Code, as added by this Act, is appropriated to the
  comptroller from the national research university fund for
  distribution to eligible state universities in accordance with and
  for the purposes described by Subchapter G, Chapter 62, Education
  Code.
         SECTION 5.  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, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1000 was passed by the House on April
  15, 2011, by the following vote:  Yeas 138, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1000 on May 28, 2011, by the following vote:  Yeas 148, Nays 0,
  1 present, not voting; passed subject to the provisions of Article
  III, Section 49a, of the Constitution of the State of Texas.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 1000 was passed by the Senate, with
  amendments, on May 25, 2011, by the following vote:  Yeas 31, Nays
  0; passed subject to the provisions of Article III, Section 49a, of
  the Constitution of the State of Texas.
 
  ______________________________
  Secretary of the Senate   
         I certify that the amounts appropriated in the herein H.B.
  No. 1000, Regular Session of the 82nd Legislature, are within
  amounts estimated to be available in the affected fund.
  Certified_____________________
  ______________________________
  Comptroller of Public Accounts 
  APPROVED: __________________
                  Date       
   
           __________________
                Governor