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  S.B. No. 632
 
 
 
 
AN ACT
  relating to the creation of the governor's university research
  initiative and to the abolishment of the Texas emerging technology
  fund.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 62, Education Code, is amended by adding
  Subchapter H to read as follows:
  SUBCHAPTER H.  GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE
         Sec. 62.161.  DEFINITIONS. In this subchapter:
               (1)  "Distinguished researcher" means a researcher who
  is:
                     (A)  a Nobel laureate; or
                     (B)  a member of the National Academy of Sciences,
  the National Academy of Engineering, or the National Academy of
  Medicine, formerly known as the Institute of Medicine.
               (2)  "Eligible institution" means a general academic
  teaching institution or medical and dental unit.
               (3)  "Fund" means the governor's university research
  initiative fund established under this subchapter.
               (4)  "General academic teaching institution" has the
  meaning assigned by Section 61.003.
               (5)  "Medical and dental unit" has the meaning assigned
  by Section 61.003.
               (6)  "Office" means the Texas Economic Development and
  Tourism Office within the office of the governor.
               (7)  "Private or independent institution of higher
  education" has the meaning assigned by Section 61.003.
         Sec. 62.162.  ADMINISTRATION OF INITIATIVE. (a)  The
  governor's university research initiative is administered by the
  Texas Economic Development and Tourism Office within the office of
  the governor.
         (b)  The office may adopt any rules the office considers
  necessary to administer this subchapter.
         Sec. 62.163.  MATCHING GRANTS TO RECRUIT DISTINGUISHED
  RESEARCHERS. (a)  From the governor's university research
  initiative fund, the office shall award matching grants to assist
  eligible institutions in recruiting distinguished researchers.
         (b)  An eligible institution may apply to the office for a
  matching grant from the fund. If the office approves a grant
  application, the office shall award to the applicant institution a
  grant amount equal to the amount committed by the institution for
  the recruitment of a distinguished researcher.
         (c)  A grant application must identify the source and amount
  of the eligible institution's matching funds and must demonstrate
  that the proposed use of the grant has the support of the
  institution's president and of the institution's governing board,
  the chair of the institution's governing board, or the chancellor
  of the university system, if the institution is a component of a
  university system. An applicant eligible institution may commit
  for matching purposes any funds of the institution available for
  that purpose other than appropriated general revenue.
         (d)  A matching grant may not be used by an eligible
  institution to recruit a distinguished researcher from:
               (1)  another eligible institution; or
               (2)  a private or independent institution of higher
  education.
         Sec. 62.164.  GRANT AWARD CRITERIA; PRIORITIES. (a)  In
  awarding grants, the office shall give priority to grant proposals
  that involve the recruitment of distinguished researchers in the
  fields of science, technology, engineering, mathematics, and
  medicine.  With respect to proposals involving those fields, the
  office shall give priority to proposals that demonstrate a
  reasonable likelihood of contributing substantially to this
  state's national and global economic competitiveness.
         (b)  A grant proposal should identify a specific
  distinguished researcher being recruited.
         Sec. 62.165.  GOVERNOR'S UNIVERSITY RESEARCH INITIATIVE
  FUND. (a)  The governor's university research initiative fund is a
  dedicated account in the general revenue fund.
         (b)  The fund consists of:
               (1)  amounts appropriated or otherwise allocated or
  transferred by law to the fund;
               (2)  money deposited to the fund under Section 62.166
  of this subchapter or under Section 490.101(b-1), Government Code;
  and
               (3)  gifts, grants, and other donations received for
  the fund.
         (c)  The fund may be used by the office only for the purposes
  of this subchapter, including for necessary expenses incurred in
  the administration of the fund and this subchapter.
         Sec. 62.166.  WINDING UP OF CONTRACTS AND AWARDS IN
  CONNECTION WITH TEXAS EMERGING TECHNOLOGY FUND. (a)  The
  governor's university research initiative is the successor to the
  Texas emerging technology fund. Awards from the Texas emerging
  technology fund shall be wound up in accordance with this section
  and Section 490.104, Government Code, and contracts governing
  awards from that fund shall be wound up in accordance with this
  section.
         (b)  If a contract governing an award from the Texas emerging
  technology fund provides for the distribution of royalties,
  revenue, or other financial benefits to the state, including
  royalties, revenue, or other financial benefits realized from the
  commercialization of intellectual or real property developed from
  an award from the fund, those royalties, revenues, or other
  financial benefits shall continue to be distributed in accordance
  with the terms of the contract unless the award recipient and the
  governor agree otherwise. Unless otherwise required by law,
  royalties, revenue, or other financial benefits accruing to the
  state under a contract described by this subsection, including any
  money returned or repaid to the state by an award recipient, shall
  be credited to the governor's university research initiative fund.
         (c)  If money awarded from the Texas emerging technology fund
  is encumbered by a contract executed before September 1, 2015, but
  has not been distributed before that date, the money shall be
  distributed from the governor's university research initiative
  fund in accordance with the terms of the contract, unless the award
  recipient and the governor agree otherwise.
         (d)  Except for an obligation regarding the distribution of
  royalties, revenue, or other financial benefits to the state as
  provided by Subsection (b), if money awarded from the Texas
  emerging technology fund under a contract executed before September
  1, 2015, has been fully distributed and the entity that received the
  award has fully performed all specific actions under the terms of
  the contract governing the award, the entity is considered to have
  fully satisfied the entity's obligations under the contract.  The
  entity shall file with the office a final report showing the
  purposes for which the award money has been spent and, if award
  money remains unspent, the purposes for which the recipient will
  spend the remaining money.
         Sec. 62.167.  CONFIDENTIALITY OF INFORMATION CONCERNING
  AWARDS FROM TEXAS EMERGING TECHNOLOGY FUND. (a)  Except as
  provided by Subsection (b), information collected under former
  provisions of Chapter 490, Government Code, concerning the
  identity, background, finance, marketing plans, trade secrets, or
  other commercially or academically sensitive information of an
  individual or entity that was considered for or received an award
  from the Texas emerging technology fund is confidential unless the
  individual or entity consents to disclosure of the information.
         (b)  The following information collected in connection with
  the Texas emerging technology fund is public information and may be
  disclosed under Chapter 552, Government Code:
               (1)  the name and address of an individual or entity
  that received an award from that fund;
               (2)  the amount of funding received by an award
  recipient;
               (3)  a brief description of the project funded under
  former provisions of Chapter 490, Government Code;
               (4)  if applicable, a brief description of the equity
  position that the governor, on behalf of the state, has taken in an
  entity that received an award from that fund; and
               (5)  any other information with the consent of:
                     (A)  the governor;
                     (B)  the lieutenant governor;
                     (C)  the speaker of the house of representatives;
  and
                     (D)  the individual or entity that received an
  award from that fund, if the information relates to that individual
  or entity.
         Sec. 62.168.  REPORTING REQUIREMENT. (a)  Before the
  beginning of each regular session of the legislature the governor
  shall submit to the lieutenant governor, the speaker of the house of
  representatives, and the standing committees of each house of the
  legislature with primary jurisdiction over economic development
  and higher education matters and post on the office of the
  governor's Internet website a report on matching grants made to
  eligible institutions from the fund that states:
               (1)  the total amount of matching funds granted by the
  office;
               (2)  the total amount of matching funds granted to each
  recipient institution;
               (3)  a brief description of each distinguished
  researcher recruited by each recipient institution, including any
  amount of external research funding that followed the distinguished
  researcher to the institution;
               (4)  a brief description of the expenditures made from
  the matching grant funds for each distinguished researcher; and
               (5)  when available, a brief description of each
  distinguished researcher's contribution to the state's economic
  competitiveness, including:
                     (A)  any patents issued to the distinguished
  researcher after accepting employment by the recipient
  institution; and
                     (B)  any external research funding, public or
  private, obtained by the distinguished researcher after accepting
  employment by the recipient institution.
         (a-1)  The report may not include information that is made
  confidential by law.
         (b)  The governor may require an eligible institution that
  receives a matching grant under this subchapter to submit, on a form
  the governor provides, information required to complete the report.
         SECTION 2.  Subchapter C, Chapter 490, Government Code, is
  amended by adding Section 490.104 to read as follows:
         Sec. 490.104.  MANAGEMENT OF INVESTMENT PORTFOLIO; WINDING
  UP AND FINAL LIQUIDATION. (a)  In this section, "state's emerging
  technology investment portfolio" means:
               (1)  the equity positions in the form of stock or other
  security the governor took, on behalf of the state, in companies
  that received awards under the Texas emerging technology fund; and
               (2)  any other investments made by the governor, on
  behalf of the state, and associated assets in connection with an
  award made under the Texas emerging technology fund.
         (b)  The Texas Treasury Safekeeping Trust Company shall
  manage and wind up the state's emerging technology investment
  portfolio. The trust company shall wind up the portfolio in a
  manner that, to the extent feasible, provides for the maximum
  return on the state's investment. In managing those investments
  and associated assets through procedures and subject to
  restrictions that the trust company considers appropriate, the
  trust company may acquire, exchange, sell, supervise, manage, or
  retain any kind of investment or associated assets that a prudent
  investor, exercising reasonable care, skill, and caution, would
  acquire or retain in light of the purposes, terms, distribution
  requirements, and other circumstances then prevailing pertinent to
  each investment or associated asset. The trust company may recover
  its reasonable and necessary costs incurred in the management of
  the portfolio from the earnings on the investments and associated
  assets in the portfolio.
         (c)  Any realized proceeds or other earnings from the sale of
  stock or other investments or associated assets in the state's
  emerging technology investment portfolio, less the amount
  permitted to be retained for payment of its costs for managing the
  portfolio as provided by Subsection (b), shall be remitted by the
  Texas Treasury Safekeeping Trust Company to the comptroller for
  deposit in the general revenue fund.
         (d)  The Texas Treasury Safekeeping Trust Company has any
  power necessary to accomplish the purposes of this section.
         (e)  On final liquidation of the state's emerging technology
  investment portfolio, the Texas Treasury Safekeeping Trust Company
  shall promptly notify the comptroller of that occurrence. As soon
  as practicable after receiving that notice, the comptroller shall
  verify that the final liquidation has been completed and, if the
  comptroller so verifies, shall certify to the governor that the
  final liquidation of the portfolio has been completed.  The
  governor shall post notice of the certification on the office of the
  governor's Internet website.
         (f)  Any balance remaining in the Texas emerging technology
  fund on final liquidation by the Texas Treasury Safekeeping Trust
  Company shall be remitted to the comptroller for deposit in the
  general revenue fund.
         SECTION 3.  Section 490.101, Government Code, is amended by
  adding Subsections (b-1) and (b-2) to read as follows:
         (b-1)  Notwithstanding Subsection (b),  benefits realized
  from a project undertaken with money from the fund, as provided by a
  contract entered into under former Section 490.103 before September
  1, 2015, shall be deposited to the credit of the governor's
  university research initiative fund established under Subchapter
  H, Chapter 62, Education Code.
         (b-2)  The fund may be used only for the purposes described
  by Section 490.104.
         SECTION 4.  (a)  The following laws are repealed:
               (1)  Sections 490.101(c), (d), (e), (f), (f-1), (g),
  (h), and (i), Government Code;
               (2)  Sections 490.102 and 490.103, Government Code; and
               (3)  Subchapters A, B, D, E, F, and G, Chapter 490,
  Government Code.
         (b)  The Texas emerging technology fund is continued solely
  for the purposes of winding up the contracts governing awards from
  that fund and the state's portfolio of equity positions and other
  investments and associated assets in connection with awards from
  that fund in accordance with Section 490.104, Government Code, as
  added by this Act. The Texas emerging technology fund is abolished
  and Sections 490.101(a), (b), (b-1), and (b-2), Government Code,
  are repealed when the comptroller certifies to the governor as
  provided by Section 490.104, Government Code, as added by this Act,
  that the final liquidation of the state's portfolio of equity
  positions and other investments and associated assets by the Texas
  Treasury Safekeeping Trust Company has been completed.  On the
  effective date of this Act, any unencumbered fund balance in the
  Texas emerging technology fund may be appropriated in accordance
  with Subsection (e) of this section.
         (c)  The abolishment by this Act of the Texas emerging
  technology fund and the repeal of provisions of Chapter 490,
  Government Code, relating to that fund do not affect the validity of
  an agreement between the governor and the recipient of an award
  awarded under Chapter 490, or a person to be awarded money under
  that chapter, that is executed before September 1, 2015. Those
  agreements shall be performed as provided by Section 62.166,
  Education Code, as added by this Act.
         (d)  A regional center of innovation and commercialization
  established under Section 490.152, Government Code, is abolished on
  the effective date of this Act.  Each center shall transfer to the
  office of the governor a copy of any meeting minutes required to be
  retained under Section 490.1521, Government Code, as that section
  existed immediately before that section's repeal by this Act, and
  the office shall retain the minutes for the period prescribed by
  that section.
         (e)  Any unencumbered balance of the Texas emerging
  technology fund may be appropriated only to one or more of the
  following:
               (1)  the Texas Research Incentive Program (TRIP) under
  Subchapter F, Chapter 62, Education Code;
               (2)  the Texas research university fund, subject to
  Subsection (f) of this section;
               (3)  the governor's university research initiative fund
  established under Subchapter H, Chapter 62, Education Code, as
  added by this Act;
               (4)  the Texas Enterprise Fund established under
  Section 481.078, Government Code; and
               (5)  the comptroller for the purposes of expenses
  incurred in managing the state's portfolio of equity positions and
  other investments in connection with awards from the Texas emerging
  technology fund in accordance with Section 490.104, Government
  Code, as added by this Act.
         (f)  The authority of the Texas research university fund to
  receive the appropriation described by Subsection (e) of this
  section is contingent on passage and enactment of H.B. 1000, or
  similar legislation relating to state support for general academic
  teaching institutions in this state by the 84th Legislature,
  Regular Session, 2015, that renames the existing Texas competitive
  knowledge fund and changes the purposes for which the fund can be
  used.
         (f-1)  On the effective date of this Act, the comptroller of
  public accounts shall transfer the encumbered balance of the Texas
  emerging technology fund to the credit of the governor's university
  research initiative fund established under Subchapter H, Chapter
  62, Education Code, as added by this Act, for the purposes of
  Section 62.166, Education Code, as added by this Act.
         (g)  Except as provided by this Act, on September 1, 2015,
  the following powers, duties, functions, and activities performed
  by the office of the governor immediately before that date are
  transferred to the Texas Treasury Safekeeping Trust Company:
               (1)  all powers, duties, functions, and activities
  related to equity positions in the form of stock or other security
  the governor has taken, on behalf of the state, in companies that
  received awards under the Texas emerging technology fund before
  September 1, 2015; and
               (2)  all powers, duties, functions, and activities
  related to other investments made by the governor, on behalf of the
  state, and associated assets in connection with an award made under
  the Texas emerging technology fund before September 1, 2015.
         (h)  Notwithstanding the repeal by this Act of provisions of
  Chapter 490, Government Code, those provisions of Chapter 490 are
  continued in effect for the limited purpose of winding up contracts
  governing awards from the Texas emerging technology fund in
  accordance with Section 62.166, Education Code, as added by this
  Act, and of winding up the state's portfolio of equity positions and
  other investments and associated assets in connection with awards
  from that fund in accordance with Section 490.104, Government Code,
  as added by this Act.
         SECTION 5.  This Act takes effect September 1, 2015.
 
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 632 passed the Senate on
  April 29, 2015, by the following vote:  Yeas 30, Nays 1;
  May 28, 2015, Senate refused to concur in House amendment and
  requested appointment of Conference Committee; May 29, 2015, House
  granted request of the Senate; May 31, 2015, Senate adopted
  Conference Committee Report by the following vote:  Yeas 30,
  Nays 1.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 632 passed the House, with
  amendment, on May 26, 2015, by the following vote:  Yeas 137,
  Nays 4, two present not voting; May 29, 2015, House granted request
  of the Senate for appointment of Conference Committee;
  May 31, 2015, House adopted Conference Committee Report by the
  following vote:  Yeas 138, Nays 5, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
             Date
 
 
  ______________________________ 
            Governor