By: Duncan, et al. S.B. No. 1560
A BILL TO BE ENTITLED
AN ACT
relating to university funding, including university funding for
excellence, the national research university 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. Section 61.059, Education Code, is amended by
adding Subsection (o) to read as follows:
(o) In addition to the other funding recommendations
required by this section, biennially the board shall determine the
amount that the board considers appropriate for purposes of
providing funding under Section 61.0596 in the following state
fiscal biennium to carry out the purposes of that section and shall
make recommendations to the governor and the Legislative Budget
Board for funding those programs in that biennium. To the extent
the board considers appropriate, the board may include in the
formulas established under this section the funding to be provided
under Section 61.0596.
SECTION 2. Subchapter C, Chapter 61, Education Code, is
amended by adding Section 61.0596 to read as follows:
Sec. 61.0596. UNIVERSITY FUNDING FOR EXCELLENCE IN SPECIFIC
PROGRAMS AND FIELDS; INCENTIVE GRANTS. (a) The board shall
administer this section to encourage and assist general academic
teaching institutions, other than public state colleges, that are
not research universities or emerging research universities
according to the institutional groupings under the board's higher
education accountability system to develop and maintain specific
programs or fields of study of the highest national rank or
recognition for that type of program or field.
(b) To assist the institution in achieving the highest
national rank or recognition for the applicable degree program and
from money available for the purpose, the board shall award
incentive grants to general academic teaching institutions
described by Subsection (a) that the board considers to have
demonstrated the greatest commitment to success in developing or
improving, consistent with the mission of the institution, the
quality of an existing degree program designated by the
institution. An institution must use a grant under this subsection
for faculty recruitment or other faculty support with respect to
the designated degree program for which the grant is awarded,
including establishment of endowed faculty positions or
enhancement of faculty compensation as considered appropriate by
the institution.
(c) An institution may designate only one degree program at
a time for consideration for new funding under Subsection (b). The
institution may change its designation with the consent of the
board. If the board determines that an institution has met all the
applicable benchmarks for the institution's designated program,
the institution may designate another degree program for
consideration for new funding under Subsection (b).
(d) The board shall establish a series of benchmarks
applicable to each degree program designated by an institution
under this section. The institution becomes eligible for funding
under Subsection (b) for each benchmark the board determines that
the institution has met. The board shall establish the amount of
funding for each benchmark met in a manner that provides an
effective incentive to assist the institution to continue its
efforts to meet the remaining benchmarks for its designated
program.
(e) Unless the board determines that a different number of
benchmarks is appropriate, the board shall establish three
benchmarks for each designated degree program. The board shall
identify one or more persons who have relevant expertise and do not
reside in this state to assist the board in establishing the
benchmarks and associated funding levels for each type of degree
program designated by an institution under this section.
(f) An institution that designates a degree program to
receive funding under Subsection (b) shall reimburse the board for
the costs incurred by the board in administering this section with
respect to the institution's designated program.
(g) In addition to supporting the programs designated by
institutions for consideration to receive incentive grants under
Subsection (b), from money available for the purpose, the board
shall provide additional money as the board determines appropriate
to assist the institutions described by Subsection (a) in
maintaining the excellence of programs or fields of study that have
achieved the highest national ranking or recognition for that type
of program or field.
(h) The legislature may not appropriate money for grants or
other financial assistance to general academic teaching
institutions under this section before the board certifies that one
or more institutions have met at least one of the benchmarks
established by the board for the institutions' designated degree
programs under Subsection (d).
SECTION 3. 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 groupings 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 4. 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 5. 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; and
(3) the institution satisfies at least four of the
following criteria:
(A) the aggregate value of the institution's
endowment funds is at least $400 million;
(B) the institution awarded at least 200 doctor
of philosophy degrees during each of the two academic years
preceding the state fiscal 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, giving consideration to the
future educational needs of the state as articulated in the
"Closing the Gaps" report of the coordinating board;
(D) the institution is designated as a member of
the Association of Research Libraries or has a Phi Beta Kappa
chapter or an equivalent recognition of research capabilities and
scholarly attainment as determined according to standards
prescribed by the coordinating board;
(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 but not limited to the election of faculty members to
national academies; or
(F) the institution has demonstrated a
commitment to high quality graduate education, as determined
according to standards prescribed by the coordinating board,
including but not limited 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.
(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 CERTAIN INSTITUTIONS
RECEIVING PERMANENT UNIVERSITY FUND SUPPORT AND MAINTENANCE. The
University of Texas at Austin and Texas 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 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. The
coordinating board may make recommendations regarding the
equitable formula and may provide assistance regarding the formula
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 QUALIFYING CRITERIA. (a) The
coordinating board shall prescribe standards and accounting
methods for verifying the value of the qualifying criteria to
establish the eligibility of an institution to receive a
distribution of money under this subchapter in a state fiscal
biennium.
(b) The coordinating board, as soon as practicable in each
even-numbered year but not later than December 31, shall provide
the legislature with verified information relating to the value of
the criteria to establish which institutions are eligible to
receive a distribution of money under this subchapter.
(c) The coordinating board shall validate the appropriate
measures of an eligible institution to verify the reported values
of the criteria for purposes of this subchapter.
(d) Upon completion, the methods for verifying the value of
the qualifying criteria prescribed in accordance with Subsection
(a) shall be sent to the state auditor for review and comment.
(e) Any information submitted by the institutions to the
coordinating board and the verification of the information by the
coordinating board for the purposes of this subchapter are subject
to audit by the state auditor in accordance with Chapter 321,
Government Code.
SECTION 6. 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 7. Sections 62.025 and 62.026, Education Code, are
repealed.
SECTION 8. (a) Except as provided by Subsection (b) of
this section, 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, except
as provided by Subsection (b) of this section, this Act does not
take effect.
(b) This section takes effect September 1, 2009. The
sections of this Act adding Subsection (o), Section 61.059, and
Section 61.0596, Education Code, take effect September 1, 2009, but
only if a specific appropriation for the implementation of those
provisions of the Education Code is provided in a general
appropriations act of the 81st Legislature.