Bill Text: TX SB1058 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the university research fund and eligibility to receive money from the national research university fund.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-03 - Referred to s/c on Higher Education by Pres [SB1058 Detail]

Download: Texas-2023-SB1058-Introduced.html

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88R8386 KJE-D
By: Perry S.B. No. 1058

A BILL TO BE ENTITLED
AN ACT
relating to the university research fund and eligibility to receive
money from the national research university fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 62, Education Code, is amended by adding
Subchapter J to read as follows:
SUBCHAPTER J. UNIVERSITY RESEARCH FUND
Sec. 62.201. PURPOSE. The purpose of this subchapter is to
allocate appropriations from the university research fund to
provide a dedicated, independent, and equitable source of funding
to enable emerging research universities in The University of Texas
System or The Texas A&M University System to achieve national
prominence as major research universities.
Sec. 62.202. DEFINITIONS. In this subchapter:
(1) "Eligible institution" means a general academic
teaching institution in The University of Texas System or The Texas
A&M University System that is eligible to receive distributions of
money under this subchapter.
(2) "Endowment funds" means funds treated as endowment
funds under the coordinating board's accountability system.
(3) "Fund" means the university research fund.
(4) "General academic teaching institution" has the
meaning assigned by Section 61.003.
Sec. 62.203. ADMINISTRATION AND INVESTMENT OF FUND. (a)
The university research 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 21, Article VII, Texas Constitution.
Sec. 62.204. 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. 62.205. ELIGIBILITY TO RECEIVE DISTRIBUTIONS FROM
FUND. (a) A general academic teaching institution in The
University of Texas System or The Texas A&M University System
becomes eligible to receive an initial distribution of money
appropriated under this subchapter for a state fiscal year 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, 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;
(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 coordinating board 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 coordinating board 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
coordinating board 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.
(b) A general academic teaching institution that becomes
eligible to receive a distribution of money under this subchapter
remains eligible to receive a distribution in each subsequent state
fiscal year.
Sec. 62.206. 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
62.205; 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 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 62.205
to be used to determine which institutions are 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 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).
Sec. 62.207. DISTRIBUTION 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 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.
(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
62.206(c).
Sec. 62.208. 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), the use of money shall
be limited to the following permitted activities:
(1) providing faculty support and paying faculty
salaries;
(2) purchasing equipment or library materials;
(3) paying graduate stipends; and
(4) supporting research performed at the institution,
including undergraduate research.
(c) Money received in a fiscal year by an eligible
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.
SECTION 2. Section 62.003(1), Education Code, is amended to
read as follows:
(1) Except as otherwise provided by Subchapters C, D,
E, F, G, [and] I, and (J), "eligible institution" means the eligible
agencies and institutions of higher education listed in Article
VII, Section 17(b), of the Constitution of Texas, and any
institution or agency of higher education that is later made
eligible to participate in the disbursement of funds pursuant to
Article VII, Section 17(c), of the Constitution of Texas.
SECTION 3. Section 62.147, Education Code, is amended to
read as follows:
Sec. 62.147. INELIGIBILITY OF INSTITUTIONS IN THE
UNIVERSITY OF TEXAS SYSTEM OR THE TEXAS A&M UNIVERSITY SYSTEM
[RECEIVING PERMANENT UNIVERSITY FUND SUPPORT AND MAINTENANCE]. A
component institution of The University of Texas System or The [at
Austin and] Texas A&M University System is [are] ineligible to
receive money under this subchapter.
SECTION 4. Section 62.147, Education Code, as amended by
this Act, applies beginning with money distributed from the
national research university fund for the state fiscal year
beginning September 1, 2025.
SECTION 5. This Act takes effect September 1, 2023, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, creating a university research fund for
emerging research universities in The University of Texas System or
The Texas A&M University System and disqualifying all component
institutions of those university systems from receiving money from
the national research university fund is approved by the voters. If
that amendment is not approved by the voters, this Act has no
effect.