HBA-DMH, CCH H.B. 1839 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1839 By: Junell Appropriations 4/8/2001 Introduced BACKGROUND AND PURPOSE The economic future of Texas depends on the state's ability to remain at the forefront of scientific and technological innovation. Texas is favorably located and has the infrastructure needed to facilitate growth in the high-tech industry. Texas is positioned to meet the technological challenges of the next century. Currently, Texas ranks second in the nation in the total number of high-tech jobs and first in the number of new jobs created since 1990. There are 772,000 high-tech employees in Texas, approximately 11 percent of the state's workforce. Texas companies will be able to lead in national and world markets only if there is continuing development of the research base. Universities can comprise a major part of the research base. Through university research, new technologies are developed and commercialized which can create a considerable economic advantage for the state. Investments in research and development can have a considerable rate of return. House Bill 1839 creates the Texas excellence fund to support and maintain educational and general activities, including research and student services, that promote increased research capacity and develop institutional excellence. 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. ANALYSIS House Bill 1839 amends the Education Code to provide that the Texas excellence fund (fund) is a fund outside the state treasury in the custody of the comptroller of public accounts (comptroller). The bill requires the comptroller to administer and invest the fund and to deposit all interest, dividends, and other income earned from investing the fund to the credit of the fund. The bill authorizes the comptroller to accept gifts or grants from any public or private source for the fund. The bill authorizes the legislature to appropriate or provide for the transfer of any available money to the credit of the fund. The bill authorizes an institution to use money appropriated from the fund only for the support and maintenance of educational and general activities, including research and student services, that promote increased research capacity and develop institutional excellence. The bill specifies the manner in which the legislature, in each state fiscal year, is authorized to appropriate all or part of the money in the fund to eligible comprehensive research universities (research universities) and other eligible general academic teaching institutions (teaching institutions). The bill modifies the method by which the comptroller is required to deposit the first $50 million that comes to the state at the beginning of each state fiscal year and that is not dedicated by other law to provide that an amount equal to the income earned from investment of the higher education fund in the preceding state fiscal year as certified by the comptroller must be deposited to the credit of the fund and the remaining amount must be deposited to the credit of the higher education fund. The deposit that is required to be made to the higher education fund expires on September 1 after the date the comptroller certifies that the value of the higher education fund is $2 billion. In each fiscal year that begins on or after that date, the bill requires the comptroller to deposit to the credit of the fund from the first money that comes to the state at the beginning of that fiscal year an amount equal to the income earned from investment of the higher education fund in the preceding state fiscal year as certified by the comptroller, not to exceed $50 million. The bill requires the comptroller, in consultation with the presiding officers of the governing boards of the research universities and teaching institutions, to invest the fund in a manner that maximizes the fund's profits. EFFECTIVE DATE September 1, 2001.