By: Fraser S.B. No. 632

(In the Senate - Filed February 18, 2015; February 23, 2015, read first time and referred to Committee on Natural Resources and Economic Development; April 21, 2015, reported adversely, with favorable Committee Substitute by the following vote: Yeas 10, Nays 0; April 21, 2015, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR S.B. No. 632 By: Fraser

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the governor's university research initiative and to the abolishment of the Texas emerging technology fund.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

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

SUBCHAPTER H. GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE

Sec. 62.161. DEFINITIONS. In this subchapter:

(1) "Distinguished researcher" means a researcher who is:

(A) a Nobel laureate; or

(B) a member of the National Academy of Sciences, the National Academy of Engineering, the Institute of Medicine, or the National Research Council.

(2) "Eligible institution" means a general academic teaching institution or medical and dental unit.

(3) "Fund" means the governor's university research initiative fund established under this subchapter.

(4) "General academic teaching institution" has the meaning assigned by Section 61.003.

(5) "Medical and dental unit" has the meaning assigned by Section 61.003.

(6) "Office" means the Texas Economic Development and Tourism Office within the office of the governor.

(7) "Private or independent institution of higher education" has the meaning assigned by Section 61.003.

Sec. 62.162. ADMINISTRATION OF INITIATIVE. (a) The governor's university research initiative is administered by the Texas Economic Development and Tourism Office within the office of the governor.

(b) The office may adopt any rules the office considers necessary to administer this subchapter.

Sec. 62.163. MATCHING GRANTS TO RECRUIT DISTINGUISHED RESEARCHERS. (a) From the governor's university research initiative fund, the office shall award matching grants to assist eligible institutions in recruiting distinguished researchers.

(b) An eligible institution may apply to the office for a matching grant from the fund. If the office approves a grant application, the office shall award to the applicant institution a grant amount equal to the amount committed by the institution for the recruitment of a distinguished researcher.

(c) A matching grant may not be used by an eligible institution to recruit a distinguished researcher from:

(1) another eligible institution; or

(2) a private or independent institution of higher education.

Sec. 62.164. GRANT AWARD PRIORITIES. In awarding grants, the office shall give priority to grant proposals that involve the recruitment of distinguished researchers in the fields of science, technology, engineering, and mathematics. With respect to proposals involving those fields, the office shall give priority to proposals that demonstrate a reasonable likelihood of contributing substantially to this state's national and global economic competitiveness.

Sec. 62.165. GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE FUND. (a) The governor's university research initiative fund is a dedicated account in the general revenue fund.

(b) The fund consists of:

(1) amounts appropriated or otherwise allocated or transferred by law to the fund;

(2) money deposited to the fund under Section 62.166; and

(3) gifts, grants, and other donations received for the fund.

Sec. 62.166. WINDING UP OF CONTRACTS AND AWARDS IN CONNECTION WITH FORMER TEXAS EMERGING TECHNOLOGY FUND. (a) The governor's university research initiative is the successor to the former Texas emerging technology fund. Awards from the former Texas emerging technology fund, and contracts governing awards from that fund, shall be wound up in accordance with this section.

(b) If a contract governing an award from the former Texas emerging technology fund provides for the distribution of royalties, revenue, or other financial benefits to the state, including royalties, revenue, or other financial benefits realized from the commercialization of intellectual or real property developed from an award from the fund, those royalties, revenues, or other financial benefits shall continue to be distributed in accordance with the terms of the contract unless the award recipient and the governor agree otherwise. Unless otherwise required by law, royalties, revenue, or other financial benefits accruing to the state under a contract described by this subsection shall be credited to the governor's university research initiative fund.

(c) If money awarded from the former Texas emerging technology fund is encumbered by a contract executed before September 1, 2015, but has not been distributed before that date, the money shall be distributed from the governor's university research initiative fund in accordance with the terms of the contract, unless the award recipient and the governor agree otherwise.

(d) If money awarded from the former Texas emerging technology fund under a contract executed before September 1, 2015, has been fully distributed, the entity that received the award is considered to have fully satisfied the entity's obligations and fully performed all specific actions under the terms of the contract governing the award. The entity shall file with the office a final report showing the purposes for which the award money has been spent and, if award money remains unspent, the purposes for which the recipient will spend the remaining money. The entity is not required to return to the state any award money received under the contract.

(e) The Texas Treasury Safekeeping Trust Company shall manage the following:

(1) equity positions in the form of stock or other security taken by the governor, on behalf of the state, in companies receiving awards under former Chapter 490, Government Code, before September 1, 2015; and

(2) any other investments, excluding grants, made by the governor on the state's behalf in connection with an award made under former Chapter 490, Government Code, before September 1, 2015.

(f) As soon as practicable after September 1, 2015, the Texas Treasury Safekeeping Trust Company shall begin winding up the state's portfolio of equity positions and other investments described by Subsection (e) by selling the stock and other investments when it is economically advantageous to the state to do so. The trust company has any power necessary in performing duties under this subsection and Subsections (e) and (g) to accomplish the purpose of this section. In managing those investments through procedures and subject to restrictions that the trust company considers appropriate, the trust company may acquire, exchange, sell, supervise, manage, or retain any kind of investment that a prudent investor, exercising reasonable care, skill, and caution, would acquire or retain in light of the purposes, terms, distribution requirements, and other circumstances then prevailing pertinent to each investment.

(g) Proceeds or other earnings from the sale of stock or other investments in the state's portfolio of equity positions and other investments described by Subsection (e) shall be deposited to the credit of the governor's university research initiative fund, taking into consideration the expenses of managing and liquidating the equity positions and other investments.

Sec. 62.167. CONFIDENTIALITY OF INFORMATION CONCERNING AWARDS FROM FORMER TEXAS EMERGING TECHNOLOGY FUND. (a) Except as provided by Subsection (b), information collected under former Chapter 490, Government Code, concerning the identity, background, finance, marketing plans, trade secrets, or other commercially or academically sensitive information of an individual or entity that was considered for or received an award from the former Texas emerging technology fund is confidential unless the individual or entity consents to disclosure of the information.

(b) The following information collected in connection with the former Texas emerging technology fund is public information and may be disclosed under Chapter 552, Government Code:

(1) the name and address of an individual or entity that received an award from the former Texas emerging technology fund;

(2) the amount of funding received by an award recipient;

(3) a brief description of the project funded under former Chapter 490, Government Code;

(4) if applicable, a brief description of the equity position that the governor, on behalf of the state, has taken in an entity that received an award from the former Texas emerging technology fund; and

(5) any other information with the consent of:

(A) the governor;

(B) the lieutenant governor;

(C) the speaker of the house of representatives; and

(D) the individual or entity that received an award from the former Texas emerging technology fund, if the information relates to that individual or entity.

Sec. 62.168. REPORTING REQUIREMENTS. (a) Before the beginning of each regular session of the legislature the governor shall submit to the lieutenant governor, the speaker of the house of representatives, and the standing committees of each house of the legislature with primary jurisdiction over economic development and higher education matters and post on the office of the governor's Internet website a report on grants made from the governor's university research initiative fund that states:

(1) the total amount of matching funds granted by the office;

(2) the total amount of matching funds granted to each institution;

(3) a brief description of each distinguished researcher recruited by each institution, including any amount of external research funding that followed the distinguished researcher to the recruiting institution;

(4) a brief description of the expenditures made from the matching grant funds for each distinguished researcher; and

(5) when available, a brief description of each distinguished researcher's contribution to the state's economic competitiveness, including but not limited to:

(A) any patents issued to the distinguished researcher after accepting employment by the recruiting institution; and

(B) any external research funding, public or private, earned by the distinguished researcher after accepting employment by the recruiting institution.

(a-1) The report may not include information that is made confidential by law.

(b) The governor may require a recipient of a grant under the governor's university research initiative to submit, on a form the governor provides, information required to complete the report.

SECTION 2. (a) Chapter 490, Government Code, is repealed.

(b) The repeal by this Act of Chapter 490, Government Code, does not affect the validity of an agreement between the governor and the recipient of an award awarded under Chapter 490, or a person to be awarded money under that chapter, that is executed before September 1, 2015. Those agreements shall be performed as provided by Section 62.166, Education Code, as added by this Act.

(c) A regional center of innovation and commercialization established under Section 490.152, Government Code, is abolished on the effective date of this Act. Each center shall transfer to the office of the governor a copy of any meeting minutes required to be retained under Section 490.1521, Government Code, as that section existed immediately before that section's repeal by this Act, and the office shall retain the minutes for the period prescribed by that section.

(d) The Texas emerging technology fund is abolished. On the effective date of this Act, the comptroller of public accounts shall transfer any unexpended balance of that fund as follows:

(1) 50 percent of the balance to the credit of the Texas Enterprise Fund under Section 481.078, Government Code; and

(2) 50 percent of the balance to the credit of the governor's university research initiative fund established under Subchapter H, Chapter 62, Education Code, as added by this Act.

(e) On September 1, 2015, the following powers, duties, functions, and activities performed by the office of the governor immediately before that date are transferred to the Texas Treasury Safekeeping Trust Company:

(1) all powers, duties, functions, and activities related to equity positions in the form of stock or other security the governor has taken, on behalf of the state, in companies that received awards under Chapter 490, Government Code, before September 1, 2015; and

(2) all powers, duties, functions, and activities related to other investments, excluding grants, made by the governor, on behalf of the state, in connection with an award made under Chapter 490, Government Code, before September 1, 2015.

(f) Notwithstanding the repeal by this Act of Chapter 490, Government Code, that chapter is continued in effect for the limited purpose of winding down contracts governing awards from the Texas emerging technology fund and the state's portfolio of equity positions and other investments in connection with awards from that fund in accordance with Section 62.166, Education Code, as added by this Act.

SECTION 3. This Act takes effect September 1, 2015.

* * * * *