By: Branch, Frullo, Coleman, Button, Bonnen, H.B. No. 1000
et al.
A BILL TO BE ENTITLED
AN ACT
relating to the distribution of money appropriated from the
national research university fund and to one or more audits of
certain general academic teaching institutions in connection with
that distribution; 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;
(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) the institution has demonstrated a
commitment to high-quality graduate education, as determined
according to standards prescribed by the coordinating board by
rule, including 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 an [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 20 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, 2016.
(c) In each state fiscal year, each eligible institution is
entitled to an equal share of the total amount to be distributed
from the fund in that year. Subject to Subsection (e), the total
amount to be distributed from the fund to those eligible
institutions in that year is a portion of the total amount
appropriated from the fund for that year determined as follows:
(1) one-half of the total amount appropriated if only
one institution has established eligibility;
(2) two-thirds of the total amount appropriated if two
institutions have established eligibility;
(3) three-fourths of the total amount appropriated if
three institutions have established eligibility;
(4) four-fifths of the total amount appropriated if
four institutions have established eligibility;
(5) five-sixths of the total amount appropriated if
five institutions have established eligibility; and
(6) six-sevenths of the total amount appropriated if
six institutions have established eligibility.
(d) The comptroller shall retain within the fund any portion
of an appropriated amount that remains after all distributions are
made for a state fiscal year under this section. 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 six, each eligible
institution is entitled to an equal share of the total amount
appropriated from the fund for that fiscal year.
(f) For purposes of this section, the total amount
appropriated from the fund for 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 institutions 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.