Texas 2023 - 88th Regular

Texas Senate Bill SB19 Compare Versions

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1	1	By: Huffman, et al. S.B. No. 19
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the administration and investment of, and distribution
7	7	and use of money from, certain constitutional and statutory funds
8	8	to support general academic teaching institutions in achieving
9	9	national prominence as major research universities and driving the
10	10	state economy; redesignating the national research university fund
11	11	as the Texas University Fund.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 51.406(c), Education Code, is amended to
14	14	read as follows:
15	15	(c) A rule or policy of a state agency, including the Texas
16	16	Higher Education Coordinating Board, in effect on June 1, 2011,
17	17	that requires reporting by a university system or an institution of
18	18	higher education has no effect on or after September 1, 2013, unless
19	19	the rule or policy is affirmatively and formally readopted before
20	20	that date by formal administrative rule published in the Texas
21	21	Register and adopted in compliance with Chapter 2001, Government
22	22	Code. This subsection does not apply to:
23	23	(1) a rule or policy for which the authorizing statute
24	24	is listed in Subsection (b);
25	25	(2) a rule or policy for which the authorizing statute
26	26	is repealed on or before September 1, 2013, by legislation enacted
27	27	by the legislature that becomes law; or
28	28	(3) a report required under any of the following
29	29	provisions:
30	30	(A) Article 59.06(g)(1), Code of Criminal
31	31	Procedure;
32	32	(B) Section 51.005;
33	33	(C) Section 51.0051;
34	34	(D) Subchapter F-1 of this chapter;
35	35	(E) Section 51.402;
36	36	(F) Section 56.039;
37	37	(G) Section 61.059;
38	38	(H) [Section 62.095(b);
39	39	[(I)] Section 62.098;
40	40	(I) [(J)] Section 411.187(b), Government Code;
41	41	(J) [(K)] Subchapter C, Chapter 606, Government
42	42	Code;
43	43	(K) [(L)] Subchapter E, Chapter 815, Government
44	44	Code; or
45	45	(L) [(M)] Chapter 1551, Insurance Code.
46	46	SECTION 2. Section 62.092(2), Education Code, is amended to
47	47	read as follows:
48	48	(2) "Eligible institution" means a general academic
49	49	teaching institution as defined by Section 61.003, other than:
50	50	(A) The University of Texas at Austin or Texas
51	51	A&M University; or
52	52	(B) an institution of higher education described
53	53	by Section 62.132(2) or 62.145.
54	54	SECTION 3. Section 62.095, Education Code, is amended to
55	55	read as follows:
56	56	Sec. 62.095. APPROPRIATION OF FUND TO ELIGIBLE
57	57	INSTITUTIONS. [(a)] In each state fiscal year, amounts shall be
58	58	appropriated to eligible institutions in the same manner that
59	59	research performance funding is appropriated to institutions
60	60	eligible to receive funding from the Texas University Fund under
61	61	Section 62.1482(a) [based on the average amount of restricted
62	62	research funds expended by each institution per year for the three
63	63	preceding state fiscal years].
64	64	[(b) For purposes of Subsection (a), the amount of
65	65	restricted research funds expended by an institution in a fiscal
66	66	year is the amount of those funds as reported to the coordinating
67	67	board by the institution for that fiscal year, subject to any
68	68	adjustment by the coordinating board in accordance with the
69	69	standards and accounting methods the coordinating board prescribes
70	70	under Section 62.096.]
71	71	SECTION 4. The heading to Subchapter F-1, Chapter 62,
72	72	Education Code, is amended to read as follows:
73	73	SUBCHAPTER F-1. NATIONAL [CORE] RESEARCH SUPPORT FUND
74	74	SECTION 5. Section 62.131, Education Code, is amended to
75	75	read as follows:
76	76	Sec. 62.131. PURPOSE. The national [core] research support
77	77	fund is established to provide funding to promote increased
78	78	research capacity at certain institutions of higher education
79	79	eligible to participate in the available university fund [emerging
80	80	research universities].
81	81	SECTION 6. Section 62.132, Education Code, is amended by
82	82	amending Subdivisions (2) and (3) and adding Subdivision (4) to
83	83	read as follows:
84	84	(2) "Eligible institution" means a general academic
85	85	teaching [an] institution [of higher education] that:
86	86	(A) is entitled to participate in the funding
87	87	provided by Section 18, Article VII, Texas Constitution;
88	88	(B) spent on average at least $20 million in
89	89	federal and private research funds per state fiscal year during the
90	90	preceding three state fiscal years; and
91	91	(C) awarded on average at least 45 research
92	92	doctoral degrees per academic year during the preceding three
93	93	academic years [is designated as an emerging research university
94	94	under the coordinating board's accountability system].
95	95	(3) "Fund" means the national [core] research support
96	96	fund.
97	97	(4) "General academic teaching institution" has the
98	98	meaning assigned by Section 61.003.
99	99	SECTION 7. Section 62.133, Education Code, is amended to
100	100	read as follows:
101	101	Sec. 62.133. FUNDING. The national [core] research support
102	102	fund consists of money appropriated by the legislature to eligible
103	103	institutions for the purposes of this subchapter.
104	104	SECTION 8. Section 62.134, Education Code, is amended to
105	105	read as follows:
106	106	Sec. 62.134. APPROPRIATION OF FUND TO ELIGIBLE
107	107	INSTITUTIONS. In each state fiscal year, amounts shall be
108	108	appropriated to eligible institutions in the same manner that
109	109	research performance funding is appropriated to institutions
110	110	eligible to receive funding from the Texas University Fund under
111	111	Section 62.1482 [as follows:
112	112	[(1) 50 percent based on the average amount of
113	113	restricted research funds expended by each institution per year for
114	114	the three preceding state fiscal years, determined in the manner
115	115	described by Section 62.095(b); and
116	116	[(2) 50 percent based on the average amount of total
117	117	research funds expended by each institution per year for the three
118	118	preceding state fiscal years, determined in the manner described by
119	119	Section 62.053(b)].
120	120	SECTION 9. The heading to Subchapter G, Chapter 62,
121	121	Education Code, is amended to read as follows:
122	122	SUBCHAPTER G. TEXAS [NATIONAL RESEARCH] UNIVERSITY FUND
123	123	SECTION 10. Section 62.141, Education Code, is amended to
124	124	read as follows:
125	125	Sec. 62.141. PURPOSE. The purpose of this subchapter is to
126	126	allocate appropriations from the Texas University Fund [national
127	127	research university fund] to provide a dedicated, independent, and
128	128	equitable source of funding to enable certain general academic
129	129	teaching institutions [emerging research universities in this
130	130	state] to achieve national prominence as major research
131	131	universities and drive the state economy.
132	132	SECTION 11. Subchapter G, Chapter 62, Education Code, is
133	133	amended by adding Section 62.1415 to read as follows:
134	134	Sec. 62.1415. REFERENCES TO TEXAS UNIVERSITY FUND. (a) In
135	135	this subchapter, a reference to the Texas University Fund means the
136	136	national research university fund.
137	137	(b) In other law, the national research university fund may
138	138	be referred to as the Texas University Fund.
139	139	SECTION 12. Section 62.142, Education Code, is amended by
140	140	amending Subdivision (3) and adding Subdivision (5) to read as
141	141	follows:
142	142	(3) "Fund" means the Texas University Fund [national
143	143	research university fund].
144	144	(5) "Trust company" means the Texas Treasury
145	145	Safekeeping Trust Company.
146	146	SECTION 13. Section 62.143, Education Code, is amended to
147	147	read as follows:
148	148	Sec. 62.143. ADMINISTRATION AND INVESTMENT OF FUND. (a)
149	149	The Texas University Fund [national research university fund] is a
150	150	fund outside the state treasury held by [in the custody of] the
151	151	comptroller and administered by the trust company.
152	152	(b) The trust company [comptroller] shall administer and
153	153	invest the fund in accordance with Section 20, Article VII, Texas
154	154	Constitution.
155	155	(c) The trust company shall determine the amount available
156	156	for distribution from the fund in accordance with a distribution
157	157	policy adopted by the comptroller that is designed to:
158	158	(1) preserve the purchasing power of the fund's assets
159	159	over a rolling 10-year period, subject to the liquidity needs of the
160	160	fund; and
161	161	(2) provide a stable and predictable stream of annual
162	162	distributions.
163	163	SECTION 14. Section 62.144, Education Code, is amended to
164	164	read as follows:
165	165	Sec. 62.144. FUNDING. (a) The fund consists of:
166	166	(1) money [any amounts] appropriated or transferred to
167	167	the credit of the fund;
168	168	(2) gifts and grants contributed to the fund; and
169	169	(3) the interest and other earnings attributable to
170	170	the investment of money in the fund [under the Texas Constitution or
171	171	otherwise appropriated or transferred to the credit of the fund
172	172	under this section or another law].
173	173	(b) [The comptroller shall deposit to the credit of the fund
174	174	all interest, dividends, and other income earned from investment of
175	175	the fund.
176	176	[(c)] The comptroller may solicit and accept gifts or grants
177	177	from any public or private source for the fund.
178	178	SECTION 15. Section 62.145, Education Code, is amended to
179	179	read as follows:
180	180	Sec. 62.145. ELIGIBILITY TO RECEIVE DISTRIBUTIONS FROM
181	181	FUND. (a) The following general academic teaching institutions
182	182	are eligible to receive distributions under this subchapter for
183	183	each state fiscal year:
184	184	(1) Texas State University;
185	185	(2) Texas Tech University;
186	186	(3) the University of Houston; and
187	187	(4) the University of North Texas.
188	188	(b) A general academic teaching institution not listed in
189	189	Subsection (a) becomes eligible to receive an initial distribution
190	190	of money appropriated under this subchapter for a state fiscal year
191	191	if:
192	192	(1) the institution:
193	193	(A) is not entitled to participate in the funding
194	194	provided by Section 18, Article VII, Texas Constitution;
195	195	(B) spent on average at least $20 million in
196	196	federal and private research funds per state fiscal year during the
197	197	preceding three state fiscal years; and
198	198	(C) awarded on average at least 45 research
199	199	doctoral degrees per academic year during the preceding three
200	200	academic years; and
201	201	(2) the legislature appropriates money to the fund in
202	202	an amount sufficient to ensure that, for the first state fiscal year
203	203	for which the institution would receive the distribution, the
204	204	market value of each other eligible institution's share of the
205	205	distribution of money under this subchapter for that fiscal year is
206	206	at least the same as the market value of that share for the state
207	207	fiscal year immediately preceding the state fiscal year in which
208	208	the additional institution becomes eligible for a distribution
209	209	under this subsection [is designated as an emerging research
210	210	university under the coordinating board's accountability system;
211	211	[(2) in each of the two state fiscal years preceding
212	212	the state fiscal year for which the appropriation is made, the
213	213	institution expended at least $45 million in restricted research
214	214	funds; and
215	215	[(3) the institution satisfies at least four of the
216	216	following criteria:
217	217	[(A) the value of the institution's endowment
218	218	funds is at least $400 million in each of the two state fiscal years
219	219	preceding the state fiscal year for which the appropriation is
220	220	made;
221	221	[(B) the institution awarded at least 200 doctor
222	222	of philosophy degrees during each of the two academic years
223	223	preceding the state fiscal year for which the appropriation is
224	224	made;
225	225	[(C) the entering freshman class of the
226	226	institution for each of those two academic years demonstrated high
227	227	academic achievement, as determined according to standards
228	228	prescribed by the coordinating board by rule, giving consideration
229	229	to the future educational needs of the state as articulated in the
230	230	coordinating board's "Closing the Gaps" report;
231	231	[(D) the institution is designated as a member of
232	232	the Association of Research Libraries or has a Phi Beta Kappa
233	233	chapter or has received an equivalent recognition of research
234	234	capabilities and scholarly attainment as determined according to
235	235	standards prescribed by the coordinating board by rule;
236	236	[(E) the faculty of the institution for each of
237	237	those two academic years was of high quality, as determined
238	238	according to coordinating board standards based on the professional
239	239	achievement and recognition of the institution's faculty,
240	240	including the election of faculty members to national academies;
241	241	and
242	242	[(F) for each of those two academic years, the
243	243	institution has demonstrated a commitment to high-quality graduate
244	244	education, as determined according to standards prescribed by the
245	245	coordinating board by rule, including standards relating to the
246	246	number of graduate-level programs at the institution, the
247	247	institution's admission standards for graduate programs, and the
248	248	level of institutional support for graduate students].
249	249	(c) [(b)] A general academic teaching institution that
250	250	becomes eligible to receive a distribution of money under this
251	251	subchapter remains eligible to receive a distribution in each
252	252	subsequent state fiscal year.
253	253	SECTION 16. Sections 62.148(a), (b), and (c), Education
254	254	Code, are amended to read as follows:
255	255	(a) In each state fiscal year, the comptroller shall
256	256	distribute to eligible institutions in accordance with this
257	257	subchapter [section] money appropriated from the fund for that
258	258	fiscal year.
259	259	(b) The total amount appropriated from the fund for any
260	260	state fiscal year may not exceed an amount equal to 7.0 [4.5]
261	261	percent of the average net market value of the investment assets of
262	262	the fund, as determined by the comptroller, for a period set by
263	263	comptroller rule [the 12 consecutive state fiscal quarters ending
264	264	with the last quarter of the preceding state fiscal year, as
265	265	determined by the comptroller].
266	266	(c) The [Subject to Subsection (e), of the total] amount
267	267	appropriated from the fund for distribution in a state fiscal year
268	268	must be allocated as follows:
269	269	(1) 75 percent to the permanent endowment for
270	270	education and research base funding under Section 62.1481; and
271	271	(2) 25 percent to the research performance funding
272	272	under Section 62.1482[, each eligible institution is entitled to a
273	273	distribution in an amount equal to the sum of:
274	274	[(1) one-seventh of the total amount appropriated; and
275	275	[(2) an equal share of any amount remaining after
276	276	distributions are calculated under Subdivision (1), not to exceed
277	277	an amount equal to one-fourth of that remaining amount].
278	278	SECTION 17. Subchapter G, Chapter 62, Education Code, is
279	279	amended by adding Sections 62.1481 and 62.1482 to read as follows:
280	280	Sec. 62.1481. PERMANENT ENDOWMENT FOR EDUCATION AND
281	281	RESEARCH BASE FUNDING. (a) For each state fiscal year, an eligible
282	282	institution is entitled to a distribution of a portion of the total
283	283	amount allocated for the permanent endowment for education and
284	284	research base funding under Section 62.148(c)(1) for that fiscal
285	285	year. The portion to which an eligible institution is entitled is a
286	286	fraction computed as follows:
287	287	(1) subject to Subsection (b), for an institution that
288	288	spent at least $45 million in federal and private research funds in
289	289	each of the preceding two state fiscal years, an amount computed by
290	290	dividing two by the sum of:
291	291	(A) the number of institutions entitled to
292	292	receive a distribution under this subdivision multiplied by two;
293	293	and
294	294	(B) the number of institutions to which
295	295	Subdivision (2) applies; or
296	296	(2) for an institution not described by Subdivision
297	297	(1), half the amount to which an institution to which Subdivision
298	298	(1) applies is entitled.
299	299	(b) An eligible institution is entitled to receive a
300	300	distribution under Subsection (a)(1) only if:
301	301	(1) in each of the state fiscal years beginning
302	302	September 1, 2020, and September 1, 2021, the institution spent at
303	303	least the amount in federal and private research funds described by
304	304	that subdivision; or
305	305	(2) the legislature appropriates money to the fund in
306	306	an amount sufficient to ensure that, for the first state fiscal year
307	307	for which the institution would receive a distribution under that
308	308	subdivision, the market value of each other eligible institution's
309	309	share of the distribution under that subdivision for that fiscal
310	310	year is at least the same as the market value of that share for the
311	311	state fiscal year immediately preceding the state fiscal year in
312	312	which the institution becomes eligible for a distribution under
313	313	that subdivision.
314	314	(c) An eligible institution that becomes eligible to
315	315	receive a distribution under Subsection (a)(1) remains eligible to
316	316	receive a distribution under that subdivision in each subsequent
317	317	state fiscal year.
318	318	Sec. 62.1482. RESEARCH PERFORMANCE FUNDING. (a) From 85
319	319	percent of the amount allocated for research performance funding
320	320	under Section 62.148(c)(2) for a state fiscal year, an eligible
321	321	institution is entitled to a distribution for that fiscal year in an
322	322	amount proportionate to the average amount of federal and private
323	323	research funds the institution spends per state fiscal year during
324	324	the preceding three state fiscal years as compared to the average
325	325	amount of those funds all eligible institutions spend per state
326	326	fiscal year during that period.
327	327	(b) From 15 percent of the amount allocated for research
328	328	performance funding under Section 62.148(c)(2) for a state fiscal
329	329	year, an eligible institution is entitled to a distribution for
330	330	that fiscal year in an amount proportionate to the average number of
331	331	research doctoral degrees the institution awards per academic year
332	332	during the preceding three academic years as compared to the
333	333	average number of those degrees all eligible institutions award per
334	334	academic year during that period.
335	335	(c) The coordinating board by rule shall establish a method
336	336	for determining the amounts to which each eligible institution is
337	337	entitled under this section.
338	338	SECTION 18. Sections 62.149(a) and (b), Education Code, are
339	339	amended to read as follows:
340	340	(a) An eligible institution may use money received under
341	341	this subchapter only for the support and maintenance of educational
342	342	and general activities that promote increased research capacity at
343	343	the institution in a manner that aligns with the goals of the
344	344	state's master plan for higher education developed under Section
345	345	61.051.
346	346	(b) For purposes of Subsection (a), the use of money shall
347	347	be limited to the following permitted activities:
348	348	(1) providing faculty support and paying faculty
349	349	salaries;
350	350	(2) purchasing equipment or library materials;
351	351	(3) paying graduate stipends; [and]
352	352	(4) supporting research performed at the institution,
353	353	including undergraduate research;
354	354	(5) increasing technology transfer,
355	355	commercialization, and patent development; and
356	356	(6) increasing the number of research doctoral
357	357	graduates in this state.
358	358	SECTION 19. Subchapter G, Chapter 62, Education Code, is
359	359	amended by adding Sections 62.150, 62.151, and 62.152 to read as
360	360	follows:
361	361	Sec. 62.150. INSTITUTIONAL ENDOWMENT REPORTING. (a) In
362	362	this section, "institutional endowment fund" means a fund
363	363	established to support a general academic teaching institution's
364	364	mission in perpetuity.
365	365	(b) For purposes of reporting the amount of an institution's
366	366	institutional endowment funds, each eligible institution may
367	367	include as a true endowment, in accordance with coordinating board
368	368	rule, the institution's share of the market value of the fund
369	369	corresponding to the share of the permanent endowment for education
370	370	and research base funding to which the institution is entitled for a
371	371	state fiscal year as provided by Section 62.1481.
372	372	Sec. 62.151. DETERMINATION AND REPORT OF AMOUNT OF
373	373	DISTRIBUTIONS. For each state fiscal biennium, the Legislative
374	374	Budget Board, in consultation with the coordinating board, shall:
375	375	(1) determine the amount of each distribution from the
376	376	fund to which each eligible institution is entitled as provided by
377	377	this subchapter; and
378	378	(2) report the determinations made under Subdivision
379	379	(1) to the legislature and the comptroller.
380	380	Sec. 62.152. RULES. The coordinating board may adopt rules
381	381	as necessary to implement this subchapter.
382	382	SECTION 20. The following provisions of Chapter 62,
383	383	Education Code, are repealed:
384	384	(1) Sections 62.096(a), (b), and (e);
385	385	(2) Section 62.135(b);
386	386	(3) Section 62.142(2);
387	387	(4) Sections 62.146 and 62.147; and
388	388	(5) Sections 62.148(d), (e), and (f).
389	389	SECTION 21. This Act takes effect September 1, 2023.