By: Branch, et al. (Senate Sponsor - Zaffirini) H.B. No. 1000
(In the Senate - Received from the House April 18, 2011;
April 20, 2011, read first time and referred to Committee on Higher
Education; May 19, 2011, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 0;
May 19, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 1000 By: Zaffirini
A BILL TO BE ENTITLED
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.
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