HBA-MPM H.B. 2865 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2865
By: Farrar
Higher Education
3/19/1999
Introduced



BACKGROUND AND PURPOSE 

Texas ranks number two on the list of the top five high-tech states (as
measured by the number of high-tech industry employees), falling directly
under California.  This state has only two Carnegie Research I (Tier I)
universities, compared to California's ten Tier I universities.  A Tier I
institution is defined as an institution offering a full range of
baccalaureate programs that is committed to graduate education through the
doctorate, and gives high priority to research.  Tier I universities
receive annually $40 million or more in federal support.  Comparatively,
Tier II universities offer similar programs and research initiatives, award
50 or more doctoral degrees yearly, but receive between $15.5 million and
$40 million annually in federal support. 

Current estimates suggest that Texas has between 26,000 and 34,000
high-tech job vacancies, and that the state will need to fill more than
130,000 related positions by the year 2000.  To meet the industry demand,
it is estimated that over the next decade Texas universities will need to
triple the number of graduates in science, math, and other
technology-related fields. 

H.B. 2865 creates the Research University Fund. Specifically, it authorizes
$50 million in appropriations for this purpose, and requires the Texas
Higher Education Coordinating Board to recommend to the legislature a
method or formula to allocate the money in the fund to eligible
institutions. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Comptroller of Public Accounts and
the Texas Higher Education Coordinating Board in SECTION 3 of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle H, Title 3, Education Code, by adding Chapter
151, as follows: 

CHAPTER 151.  RESEARCH UNIVERSITY FUND

Sec. 151.001.  PURPOSE.  Sets forth the purpose of the research university
fund (fund). 

Sec. 151.002.  DEFINITIONS.  Defines, for the purpose of this chapter, the
following terms: "Carnegie classification," "coordinating board," and
"eligible institution." 

Sec. 151.003.  RESEARCH UNIVERSITY FUND.  Provides that the fund is one
outside the state treasury in the custody of the comptroller.  Authorizes
the legislature to appropriate no less than $50 million to the fund each
state fiscal year.  Requires the Texas Higher Education Coordinating Board
(board) to recommend to the legislature a method or formula to allocate the
money in the fund to eligible institutions.  Authorizes an amount allocated
from the fund to an eligible institution to be used only for the purposes
of this chapter.  Requires the comptroller of public accounts (comptroller)
to administer and invest the find in the same manner as the permanent
university fund. 

SECTION 2.  Repealer:  Sections 62.025 (Deposit of $50 Million) and 62.026
(Higher Education  Fund), Education Code. These sections address the higher
education fund, to which $50 million is to be deposited in the fund each
state fiscal year, and interest, dividends, and other income earned from
the investment of the fund. Further sets forth methods of distribution;
requires the comptroller to administer and invest the fund in the same
manner as the permanent university fund; authorizes the comptroller to
deduct a certain amount for administrative expenses from the interest,
dividends, and other income earned from the investment of the fund.  

SECTION 3.  Requires the comptroller and the board to adopt rules necessary
to administer Chapter 151, Education Code, as added by this Act, no later
than September 1, 1999. 

SECTION 4.Emergency clause.
  Effective date: upon passage.