S.B. No. 632
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, or the National Academy of
Medicine, formerly known as the Institute of Medicine.
(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 grant application must identify the source and amount
of the eligible institution's matching funds and must demonstrate
that the proposed use of the grant has the support of the
institution's president and of the institution's governing board,
the chair of the institution's governing board, or the chancellor
of the university system, if the institution is a component of a
university system. An applicant eligible institution may commit
for matching purposes any funds of the institution available for
that purpose other than appropriated general revenue.
(d) 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 CRITERIA; PRIORITIES. (a) 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, mathematics, and
medicine. 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.
(b) A grant proposal should identify a specific
distinguished researcher being recruited.
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
of this subchapter or under Section 490.101(b-1), Government Code;
and
(3) gifts, grants, and other donations received for
the fund.
(c) The fund may be used by the office only for the purposes
of this subchapter, including for necessary expenses incurred in
the administration of the fund and this subchapter.
Sec. 62.166. WINDING UP OF CONTRACTS AND AWARDS IN
CONNECTION WITH TEXAS EMERGING TECHNOLOGY FUND. (a) The
governor's university research initiative is the successor to the
Texas emerging technology fund. Awards from the Texas emerging
technology fund shall be wound up in accordance with this section
and Section 490.104, Government Code, 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 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, including any
money returned or repaid to the state by an award recipient, shall
be credited to the governor's university research initiative fund.
(c) If money awarded from the 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) Except for an obligation regarding the distribution of
royalties, revenue, or other financial benefits to the state as
provided by Subsection (b), if money awarded from the Texas
emerging technology fund under a contract executed before September
1, 2015, has been fully distributed and the entity that received the
award has fully performed all specific actions under the terms of
the contract governing the award, the entity is considered to have
fully satisfied the entity's obligations under the contract. 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.
Sec. 62.167. CONFIDENTIALITY OF INFORMATION CONCERNING
AWARDS FROM TEXAS EMERGING TECHNOLOGY FUND. (a) Except as
provided by Subsection (b), information collected under former
provisions of 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 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 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 that fund;
(2) the amount of funding received by an award
recipient;
(3) a brief description of the project funded under
former provisions of 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 that 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 that fund, if the information relates to that individual
or entity.
Sec. 62.168. REPORTING REQUIREMENT. (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 matching grants made to
eligible institutions from the fund that states:
(1) the total amount of matching funds granted by the
office;
(2) the total amount of matching funds granted to each
recipient institution;
(3) a brief description of each distinguished
researcher recruited by each recipient institution, including any
amount of external research funding that followed the distinguished
researcher to the 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:
(A) any patents issued to the distinguished
researcher after accepting employment by the recipient
institution; and
(B) any external research funding, public or
private, obtained by the distinguished researcher after accepting
employment by the recipient institution.
(a-1) The report may not include information that is made
confidential by law.
(b) The governor may require an eligible institution that
receives a matching grant under this subchapter to submit, on a form
the governor provides, information required to complete the report.
SECTION 2. Subchapter C, Chapter 490, Government Code, is
amended by adding Section 490.104 to read as follows:
Sec. 490.104. MANAGEMENT OF INVESTMENT PORTFOLIO; WINDING
UP AND FINAL LIQUIDATION. (a) In this section, "state's emerging
technology investment portfolio" means:
(1) the equity positions in the form of stock or other
security the governor took, on behalf of the state, in companies
that received awards under the Texas emerging technology fund; and
(2) any other investments made by the governor, on
behalf of the state, and associated assets in connection with an
award made under the Texas emerging technology fund.
(b) The Texas Treasury Safekeeping Trust Company shall
manage and wind up the state's emerging technology investment
portfolio. The trust company shall wind up the portfolio in a
manner that, to the extent feasible, provides for the maximum
return on the state's investment. In managing those investments
and associated assets 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 or associated assets 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 or associated asset. The trust company may recover
its reasonable and necessary costs incurred in the management of
the portfolio from the earnings on the investments and associated
assets in the portfolio.
(c) Any realized proceeds or other earnings from the sale of
stock or other investments or associated assets in the state's
emerging technology investment portfolio, less the amount
permitted to be retained for payment of its costs for managing the
portfolio as provided by Subsection (b), shall be remitted by the
Texas Treasury Safekeeping Trust Company to the comptroller for
deposit in the general revenue fund.
(d) The Texas Treasury Safekeeping Trust Company has any
power necessary to accomplish the purposes of this section.
(e) On final liquidation of the state's emerging technology
investment portfolio, the Texas Treasury Safekeeping Trust Company
shall promptly notify the comptroller of that occurrence. As soon
as practicable after receiving that notice, the comptroller shall
verify that the final liquidation has been completed and, if the
comptroller so verifies, shall certify to the governor that the
final liquidation of the portfolio has been completed. The
governor shall post notice of the certification on the office of the
governor's Internet website.
(f) Any balance remaining in the Texas emerging technology
fund on final liquidation by the Texas Treasury Safekeeping Trust
Company shall be remitted to the comptroller for deposit in the
general revenue fund.
SECTION 3. Section 490.101, Government Code, is amended by
adding Subsections (b-1) and (b-2) to read as follows:
(b-1) Notwithstanding Subsection (b), benefits realized
from a project undertaken with money from the fund, as provided by a
contract entered into under former Section 490.103 before September
1, 2015, shall be deposited to the credit of the governor's
university research initiative fund established under Subchapter
H, Chapter 62, Education Code.
(b-2) The fund may be used only for the purposes described
by Section 490.104.
SECTION 4. (a) The following laws are repealed:
(1) Sections 490.101(c), (d), (e), (f), (f-1), (g),
(h), and (i), Government Code;
(2) Sections 490.102 and 490.103, Government Code; and
(3) Subchapters A, B, D, E, F, and G, Chapter 490,
Government Code.
(b) The Texas emerging technology fund is continued solely
for the purposes of winding up the contracts governing awards from
that fund and the state's portfolio of equity positions and other
investments and associated assets in connection with awards from
that fund in accordance with Section 490.104, Government Code, as
added by this Act. The Texas emerging technology fund is abolished
and Sections 490.101(a), (b), (b-1), and (b-2), Government Code,
are repealed when the comptroller certifies to the governor as
provided by Section 490.104, Government Code, as added by this Act,
that the final liquidation of the state's portfolio of equity
positions and other investments and associated assets by the Texas
Treasury Safekeeping Trust Company has been completed. On the
effective date of this Act, any unencumbered fund balance in the
Texas emerging technology fund may be appropriated in accordance
with Subsection (e) of this section.
(c) The abolishment by this Act of the Texas emerging
technology fund and the repeal of provisions of Chapter 490,
Government Code, relating to that fund do 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.
(d) 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.
(e) Any unencumbered balance of the Texas emerging
technology fund may be appropriated only to one or more of the
following:
(1) the Texas Research Incentive Program (TRIP) under
Subchapter F, Chapter 62, Education Code;
(2) the Texas research university fund, subject to
Subsection (f) of this section;
(3) the governor's university research initiative fund
established under Subchapter H, Chapter 62, Education Code, as
added by this Act;
(4) the Texas Enterprise Fund established under
Section 481.078, Government Code; and
(5) the comptroller for the purposes of expenses
incurred in managing the state's portfolio of equity positions and
other investments in connection with awards from the Texas emerging
technology fund in accordance with Section 490.104, Government
Code, as added by this Act.
(f) The authority of the Texas research university fund to
receive the appropriation described by Subsection (e) of this
section is contingent on passage and enactment of H.B. 1000, or
similar legislation relating to state support for general academic
teaching institutions in this state by the 84th Legislature,
Regular Session, 2015, that renames the existing Texas competitive
knowledge fund and changes the purposes for which the fund can be
used.
(f-1) On the effective date of this Act, the comptroller of
public accounts shall transfer the encumbered balance of the Texas
emerging technology fund to the credit of the governor's university
research initiative fund established under Subchapter H, Chapter
62, Education Code, as added by this Act, for the purposes of
Section 62.166, Education Code, as added by this Act.
(g) Except as provided by this Act, 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 the Texas emerging technology fund before
September 1, 2015; and
(2) all powers, duties, functions, and activities
related to other investments made by the governor, on behalf of the
state, and associated assets in connection with an award made under
the Texas emerging technology fund before September 1, 2015.
(h) Notwithstanding the repeal by this Act of provisions of
Chapter 490, Government Code, those provisions of Chapter 490 are
continued in effect for the limited purpose of winding up contracts
governing awards from the Texas emerging technology fund in
accordance with Section 62.166, Education Code, as added by this
Act, and of winding up the state's portfolio of equity positions and
other investments and associated assets in connection with awards
from that fund in accordance with Section 490.104, Government Code,
as added by this Act.
SECTION 5. This Act takes effect September 1, 2015.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 632 passed the Senate on
April 29, 2015, by the following vote: Yeas 30, Nays 1;
May 28, 2015, Senate refused to concur in House amendment and
requested appointment of Conference Committee; May 29, 2015, House
granted request of the Senate; May 31, 2015, Senate adopted
Conference Committee Report by the following vote: Yeas 30,
Nays 1.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 632 passed the House, with
amendment, on May 26, 2015, by the following vote: Yeas 137,
Nays 4, two present not voting; May 29, 2015, House granted request
of the Senate for appointment of Conference Committee;
May 31, 2015, House adopted Conference Committee Report by the
following vote: Yeas 138, Nays 5, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor