HBA-NLM H.B. 1768 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1768 By: Junell Appropriations 3/25/1999 Introduced BACKGROUND AND PURPOSE Under the Excellence in Higher Education Act of 1985 (Chapter 62, Education Code), the amount of funds distributed to each institution are made in accordance with an equitable formula dictated by statutory variables, including space deficit, facilities condition, and institutional complexity. The specified amount of allocations for each public academic institution eligible for funds from the higher education fund are provided in the Education Code. H.B. 1768 deletes the existing provision relating to the allocation of funds made in accordance with an equitable formula and amounts allocated by the formula. This bill requires the legislature to determine the allocation for each eligible public academic institution in the General Appropriations Act. In addition, this bill calls for the Texas Higher Education Coordinating Board to report to the governor and the Legislative Budget Board information necessary to update allocations, for the recommendation to the legislature for the upcoming biennium. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 62.003(1), Education Code, to redefine "eligible institution" by deleting eligible agencies and institutions of higher education listed in Section 17(b) (Colleges and Universities; Appropriations and Funding) Article VII, Texas Constitution, and by including eligible participants in the disbursement of funds pursuant to Section 17(a), rather than Section 17(c), Texas Constitution. SECTION 2. Amends Section 62.021(a), Education Code, to require the legislature to determine the allocation, described in this section, in the General Appropriations Act. Deletes existing text relating to the allocation of funds made in accordance with an equitable formula and amounts allocated by the formula. Makes conforming and nonsubstantive changes. SECTION 3. Amends Section 62.022, Education Code, as follows: Sec. 62.022. ADJUSTMENT OF ALLOCATION FORMULA. (a) Requires the Texas Higher Education Coordinating Board (coordinating board) to report to the governor and the Legislative Budget Board (LBB) certain enrollment and other information described in this section. (b) Authorizes LBB to request the coordinating board to conduct a study and to present recommendations relating to the allocation of funds under this chapter. Deletes the provision that requires the coordinating board to conduct the study and present recommendations prior to the convening of the regular session of the Texas Legislature in 1999 and the requirement for adjustment of the equitable allocation formula. (c) Authorizes, rather than requires, the legislature, in determining the method of or formula for the allocation of funds under Section 62.021(a), to approve, modify and approve, or reject the recommendations of the coordinating board or LBB. Section 62.021(a) provides for specified amounts to be allocated to certain universities. Deletes existing Subsection (c), relating to the continuance of the 10-year allocation. (d) Provides that an adjustment under this subsection may not, rather than shall not, prevent payment of the principal of or interest on outstanding bonds and notes described by this section. Makes nonsubstantive changes. (e) Deletes these existing subsections relating to the conduction of a study and recommendations to LBB . (f) Deletes these existing language providing for the contents of a review of the allocation formula. SECTION 4. Amends Section 62.026(h), Education Code, to require the comptroller to distribute in accordance with Section 17(e), rather than Section 17(i), Article VII, Texas Constitution, the income earned, rather than the interest, dividends and other income earned, from the investment of the fund to eligible institutions in accordance with the allocation provided by the General Appropriations Act and adopted under Section 62.021(a) (Allocations), Education Code. Makes a conforming and nonsubstantive changes. SECTION 5. Repealer: Sections 62.021(d), 62.021(e), 62.024 (Amount of Allocation Increased), and 62.027 (Effect of Legislation), Education Code. Sections 62.021(d) and 62.021(e) state that all funds appropriated by Section 17, Article VII, Texas Constitution, but not expended during the fiscal year of appropriation, shall be carried forward and reappropriated for each of the succeeding fiscal years until expended by the governing boards of eligible institutions for the purposes described in Section 17, Article VII, Texas Constitution. The amount otherwise allocated in this section to Lamar University and its educational centers is considered part of the amount allocated to the Texas State University System administration and its component institutions, to be spent as otherwise provided in this section in the sole discretion of the governing board of the Texas State University System for the system and its institutions. SECTION 6. Provides that this Act takes effect September 1, 2000, but only if the constitutional amendment revising the provisions for funding capital improvements and acquisitions by institutions of higher education proposed by the 76th Legislature, Regular Session, 1999, is approved by the voters. Provides that this Act has no effect if that amendment is not approved by the voters. SECTION 7. Provides that a change in law made by this Act does not impair any obligation created by the issuance of bonds or notes in accordance with Section 17, Article VII, Texas Constitution, before January 1, 2000, and all outstanding bonds and notes validly issued under those sections remain valid, enforceable, and binding and are required to be paid in full, both principal and interest, in accordance with their terms and from the sources pledged to the payment of the bonds. Provides that the changes made by this Act relating to the allocation of the funds do not affect the pledges made in connection with bonds or notes. SECTION 8. Emergency clause.