Texas Legislators Approve Funding, Incentives to Help Universities Reach Tier One Status

Seven emerging research universities in Texas would receive funding and incentives to help advance their status to nationally-recognized tier one schools following passage of HB 51, awaiting Gov. Rick Perry's signature.

The bill would create three funding pools and establish methods to achieve tier one status, which generally is referred to as a high-performing research university having at least $100 million in federal research grants annually, selective admissions, and low student-faculty ratios. The following funds would be established under the bill and require the universities to increase research, raise private funds, and meet benchmarks required for tier one distinction:

• The Research University Development Fund would provide funding to support recruitment and retention of highly-qualified faculty and enhancement of research productivity.
• The Texas Research Incentive Program would provide matching grants based on the amount of donations from private sources.
• The National Research University Fund, a fund outside the state treasury, would provide funding incentives based on a point system to reward universities that meet certain criteria, such as the value of the institution's endowment fund and number of doctoral degrees awarded. Voters would be asked to approve a constitutional amendment transferring the balance of the Higher Education Fund to establish the National University Research Fund.

Texas currently has three universities designated as tier one status:  the University of Texas at Austin, Texas A&M University and Rice University.

Two bills aimed at growing Texas' renewable energy industries died during the legislative session. SB 545 would have created a $500 million solar incentive program for household and business installation. The other bill, SB 541, would have mandated the state generate 1,500 megawatts of power from renewable energy. A measure allowing cities to create financial districts to loan money for renewable power and energy efficiency passed both chambers.

Lawmakers also approved the 2010-11 budget last week authorizing $182.3 billion in spending over the next two years and includes $12.1 billion in federal stimulus funds. The approved budget replenishes funding for the state's primary economic development tools, the Emerging Technology Fund (ETF) and the Texas Enterprise Fund (TEF).

For the ETF, lawmakers appropriated an additional $94 million over the biennium, which totals $203.5 million, including the unexpended balance. Funding for this initiative supports research superiority awards, commercialization awards, and matching awards through the state's institutions of higher education. The 2008-09 budget appropriated $75 million in new general revenue for the fund. To date, the ETF has allocated more than $89 million in funds to 75 early-stage companies, according to the governor's office.

Lawmakers appropriated an additional $20 million for the TEF in FY11. This fund provides incentives to attract larger employers to the state and assist existing businesses with substantial expansion. Total funding including the unexpended balance for the TEF last biennium was $225 million.  

The approved budget also provides funding for debt service for $450 million in cancer research bonds to fund cancer prevention research and prevention programs through the Cancer Prevention and Research Institute of Texas, the state's 10-year, $3 billion research initiative.

The enrolled version of the 2010-11 General Appropriations Bill is available at: http://www.legis.state.tx.us/tlodocs/81R/billtext/pdf/SB00001F.pdf.