BILL ANALYSIS

 

 

 

C.S.H.B. 2753

By: Branch

Higher Education

Committee Report (Substituted)

 

 

 

BACKGROUND AND PURPOSE

 

Interested parties note that the majority of formula funding for health-related educational institutions is currently driven by student enrollment. These parties assert that institutions with a limited ability to increase enrollment are under great pressure to sustain and expand levels of excellence in all aspects of their missions due to recent declines in formula funding on a per-student basis. C.S.H.B. 2753 seeks to create a funding mechanism that will recognize and support achievement across the full spectrum of missions of health-related institutions, not simply student enrollment.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

 

ANALYSIS

 

C.S.H.B. 2753 amends the Education Code to establish the excellence fund for health-related institutions as an account in the general revenue fund consisting of money appropriated or transferred to the credit of the fund under the bill's provisions or other law. The bill defines "health-related institution" as The Texas A&M University System Health Science Center, The University of Texas Medical Branch at Galveston, The University of Texas Southwestern Medical Center, The University of Texas Health Science Center at San Antonio, The University of Texas Health Science Center at Houston, the University of North Texas Health Science Center at Fort Worth, and Texas Tech University Health Sciences Center. The bill authorizes the comptroller of public accounts to accept gifts or grants for the fund from any public or private source. The bill conditions eligibility for annual distributions from the fund on a health-related institution having a medical school and making a one-time initial transfer to the fund from the institution's non-formula appropriations in an amount of not less than $2.5 million, as determined by the institution, and as specified in the General Appropriations Act. The bill requires the legislature, in making appropriations of money in the fund, to ensure that each eligible institution, before the end of the state fiscal biennium following the biennium in which the institution made the initial transfer, receives total distributions from the fund in an amount that is equal to or exceeds the amount of its initial transfer.

 

C.S.H.B. 2753 entitles an eligible institution, in each state fiscal year, to receive a share of the money in the fund in proportion to the institution's percentage of the total points awarded for that fiscal year and sets out a system under which eligible institutions are awarded points based on certain specified metrics in the following categories: sponsored research, faculty quality, doctoral degrees, philanthropy, commercialization, and patents. If in a state fiscal biennium the total amount of the institution's shares of the money in the fund is less than any amount the institution is required to receive with regard to its initial transfer, the bill requires the institution's share for each fiscal year to be increased by the amount necessary to comply with that requirement and the shares of the other institutions to be reduced accordingly. The bill provides that, for each state fiscal biennium, each prescribed metric is determined using the average of the applicable numbers or amounts for the three preceding years for which the information is available, as determined on the January 1 preceding the biennium, and the determined average governs distributions from the fund for each year of that biennium.

 

EFFECTIVE DATE

 

On passage, or, if the bill does not receive the necessary vote, September 1, 2013.

 

COMPARISON OF ORIGINAL AND SUBSTITUTE

 

While C.S.H.B. 2753 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.

 

INTRODUCED

HOUSE COMMITTEE SUBSTITUTE

SECTION 1. Chapter 62, Education Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. EXCELLENCE FUND FOR HEALTH-RELATED INSTITUTIONS

Sec. 62.161. PURPOSE. The purpose of this subchapter is to sustain and expand levels of excellence in all aspects of the missions of health-related institutions of higher education to educate and train the health care workforce, to provide excellent clinical care, and to develop new ways to treat diseases and address the health issues facing Texas and the nation.

Sec. 62.162. DEFINITIONS. In this subchapter:

(1) "Eligible institution" means a health-related institution that is eligible to receive distributions of money under this subchapter.

(2) "Coordinating board" means the Texas Higher Education Coordinating Board.

(3) "Health-related institution" means:

(A) The Texas A&M University System Health Science Center;

(B) The University of Texas Medical Branch at Galveston;

(C) The University of Texas Southwestern Medical Center at Dallas;

(D) The University of Texas Health Science Center at San Antonio;

(E) The University of Texas Health Science Center at Houston;

(F) The University of North Texas Health Science Center at Fort Worth; and

(G) Texas Tech University Health Sciences Center.

Sec. 62.163. EXCELLENCE FUND. (a) The excellence fund for health-related institutions is an account in the general revenue fund and consists of money appropriated or transferred to the credit of the fund under this section or other law.

(b) The comptroller may solicit and accept gifts or grants for the fund from any public or private source.

Sec. 62.164. CONTRIBUTION BY INSTITUTION. To be eligible for distributions from the fund, a health-related institution must make a one-time initial transfer to the fund from the institution's non-formula appropriations. The amount to be transferred shall be determined through legislative appropriation.

 

 

 

 

 

 

 

 

 

 

 

 

Sec. 62.165. DISTRIBUTIONS TO INSTITUTIONS. (a) In each state fiscal year, each eligible institution is entitled to receive a share of the money in the fund in proportion to the institution's percentage of the total number of points awarded under Subsection (b) for that fiscal year.

 

 

 

 

 

 

 

 

 

(b) For each state fiscal year, a total of 25 points is awarded to eligible institutions for each of the following metrics, with each institution receiving points, or fractional points rounded to the nearest hundredth, in proportion to the institution's share of the aggregate amount, for all eligible institutions, of the applicable number of items or the applicable amounts described in each of the following categories:

(1) Sponsored Research--the dollar amount of federal and private research expenditures as reflected in the coordinating board's annual research expenditures report;

(2) Faculty Quality--the number of awards to faculty, such as Nobel Prizes and memberships in national academies, by entities recognized for that purpose in the coordinating board's accountability system;

(3) Doctoral Degrees--the number of doctoral degrees awarded, as reflected in the coordinating board's accountability system;

(4) Philanthropy--the dollar amount of cash gifts received, as reported in the Council for Aid to Education's voluntary support of education survey or in the institutions' Internal Revenue Service Form 990, whichever is considered appropriate for the institution by the coordinating board;

(5) Commercialization--the number of licensing agreements executed, as reported in the coordinating board's technology development and transfer report; and

(6) Patents--the number of patents awarded, as reported in the coordinating board's technology development and transfer report.

(c) For each state fiscal biennium, each metric prescribed by Subsection (b) is determined using the average of the applicable numbers or amounts for the three most recent years for which the information is available, as determined on the January 1 preceding the biennium, and the determined average governs distributions from the fund for each year of that biennium.

SECTION 1. Chapter 62, Education Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. EXCELLENCE FUND FOR HEALTH-RELATED  INSTITUTIONS

Sec. 62.161. PURPOSE. The purpose of this subchapter is to sustain and expand levels of excellence in all aspects of the missions of health-related institutions to educate and train the health care workforce, to provide excellent clinical care, and to develop new ways to treat diseases and address the health issues facing Texas and the nation.

 

Sec. 62.162. DEFINITIONS. In this subchapter:

(1) "Eligible institution" means a health-related institution that is eligible to receive distributions of money under this subchapter.

 

 

 

(2) "Health-related institution" means:

(A) The Texas A&M University System Health Science Center;

(B) The University of Texas Medical Branch at Galveston;

(C) The University of Texas Southwestern Medical Center;

(D) The University of Texas Health Science Center at San Antonio;

(E) The University of Texas Health Science Center at Houston;

(F) the University of North Texas Health Science Center at Fort Worth; and

(G) Texas Tech University Health Sciences Center.

Sec. 62.163. EXCELLENCE FUND. (a) The excellence fund for health-related institutions is an account in the general revenue fund and consists of money appropriated or transferred to the credit of the fund under this section or other law.

(b) The comptroller may accept gifts or grants for the fund from any public or private source.

Sec. 62.164. ELIGIBLE INSTITUTIONS; CONTRIBUTION. (a) To be eligible for annual distributions from the fund, a health-related institution must:

(1) have a medical school; and

(2) make a one-time, initial transfer to the fund from the institution's non-formula appropriations in an amount of not less than $2.5 million, as determined by the institution, and as specified in the General Appropriations Act.

(b) In making appropriations of the money in the fund, the legislature shall ensure that each eligible institution, before the end of the state fiscal biennium following the biennium in which the institution made the initial transfer to the fund as required by Subsection (a)(2), receives total distributions from the fund in an amount that is equal to or exceeds the amount of its initial transfer.

Sec. 62.165. DISTRIBUTIONS TO INSTITUTIONS. (a) In each state fiscal year, an eligible institution is entitled to receive a share of the money in the fund in proportion to the institution's percentage of the total points awarded under Subsection (b) for that fiscal year. If in a state fiscal biennium the total amount of the institution's shares of the money in the fund is less than any amount the institution is entitled to receive in that biennium under Section 62.164(b), the institution's share for each fiscal year shall be increased by the amount necessary to comply with Section 62.164(b), and the shares of the other institutions shall be reduced accordingly.

(b) For each state fiscal year, a total of 25 points is awarded to eligible institutions for each of the following metrics, with each institution receiving points, or fractional points rounded to the nearest hundredth, in proportion to the institution's share of the aggregate amount, for all eligible institutions, of the applicable amounts described in each of the following categories:

 

(1) Sponsored Research--the dollar amount of federal and private research expenditures as reflected in the coordinating board's annual research expenditures report;

(2) Faculty Quality--the number of awards to faculty, such as Nobel Prizes and memberships in national academies, by entities recognized for that purpose in the coordinating board's accountability system;

(3) Doctoral Degrees--the number of doctoral degrees awarded, as reflected in the coordinating board's accountability system;

(4) Philanthropy--the dollar amount of cash gifts received as reported in the Council for Aid to Education's voluntary support of education survey or in the institutions' Internal Revenue Service Form 990, whichever is considered appropriate for the institution by the coordinating board;

(5) Commercialization--the number of licensing agreements executed, as reported in the coordinating board's technology development and transfer report; and

(6) Patents--the number of patents awarded, as reported in the coordinating board's technology development and transfer report.

(c) For each state fiscal biennium, each metric prescribed by Subsection (b) is determined using the average of the applicable numbers or amounts for the three preceding years for which the information is available, as determined on the January 1 preceding the biennium, and the determined average governs distributions from the fund for each year of that biennium.

 

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, 2013.

 

SECTION 2. Same as introduced version.