HB 153 by Morrison Relating to authorizing the issuance of revenue bonds or other obligations to fund capital projects at public institutions of higher education; making an appropriation. HB 153 authorizes The University of Texas System Board of Regents (among other state universities and state university systems) to issue bonds commonly known as “tuition revenue bonds” or “TRBs.” The UT System received about 45 percent of the total authority granted by the bill, and each UT System institution received authority for at least one project. Although tuition and other UT System revenue is legally pledged to service the bond debt, the practice has been for the legislature to appropriate general revenue to reimburse the institutions for debt service on projects specifically authorized in a bill such as HB 153. This bill does not make such an appropriation, but it is anticipated that the legislature will appropriate money for the debt service in the 80th Regular Session in 2007. Although not expressed in the text of the bill, the amounts authorized generally represent less than 100 percent of the total cost of the authorized projects. Institutions will be required to identify non-TRB sources for the remainder. The projects at UT System institutions that may be financed and the maximum aggregate principal amounts of the bonds authorized by the bill in new Section 55.1752, Education Code, are as follows: (1) UT Arlington, $70,430,000 for an Engineering Research Building; (2) UT Austin, $105 million for the renovation of the Experimental Science Building; (3) UT Brownsville, $33,800,000 for a Science and Technology Learning Center; (4) UT Dallas, $12 million for a vivarium and experimental space; (5) UT El Paso, $76,500,000 for a physical sciences/engineering core facility; (6) UT Pan American, $6 million for the Starr County Upper Level Center, and $39,796,000 for the fine arts academic and performance complex; (7) UT Permian Basin, $54 million for a science and technology complex, and $45 million for an arts convocation and classroom facility at the Center for Energy and Economic Diversification; (8) UT San Antonio, $74,250,000 for an engineering building (phase II); (9) UT Southwestern Medical Center - Dallas, $42 million for the north campus (phase 5);
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(10) UT Medical Branch - Galveston, $57 million for the Galveston National Laboratory; (11) UT Health Science Center - Houston, $60 million for a replacement building for The University of Texas Dental Branch at Houston; (12) UT Health Science Center - San Antonio, $60 million for the South Texas Research Facility; (13) UT Health Science Center - Tyler, $21,120,000 for an academic health center; (14) UT M. D. Anderson Cancer Center, $40 million for a Center for Targeted Therapy research building; and (15) UT Tyler, $6,300,000 for the expansion of the Palestine campus, and $43,200,000 for the completion, renovation, and expansion of engineering and sciences facilities. Under Sections 3 and 4 of the bill, the acquisition of real property for, and the construction of, the projects authorized by the bill do not require the approval of the Texas Higher Education Coordinating Board, although the coordinating board may review the acquisition and construction for compliance with board standards for cost, efficiency, and space use. In addition to authorizing TRBs, Section 6 of the bill appropriates $5.3 million in general revenue to UT System for the remainder of the state fiscal biennium ending August 31, 2007, to reimburse UT System for debt service paid on the long-term obligations related to the construction of a natural science and engineering research building at UT Dallas in accordance with the economic development agreement between the State of Texas and the UT System Board of Regents. Of that amount, at least $1.2 million must be spent to reimburse debt service payments made during the remainder of the state fiscal year ending August 31, 2006. The construction of this building is part of the economic development project with Texas Instruments known as “Project Emmitt.” Section 2 of the bill provides the maximum amounts of money for each state fiscal year through August 31, 2027, that may be appropriated to reimburse UT System for debt service on long-term obligations related to the construction of the UT Dallas natural sciences and engineering research building. The amounts are consistent with the debt service schedule for the existing permanent financing for the project. Impact: The last time tuition revenue bonds were broadly approved was 2001, and UT Austin had not received TRB authority since 1997. The projects authorized for TRB funding will enable UT System institutions to provide classrooms, laboratories, and other facilities critical to accommodating the enrollment growth and other needs of System institutions, including facilities necessary to address the goals of “Closing the Gaps.” With a few exceptions, each institution received authority for the project the institution considered to be the highest priority. The authority to issue TRBs for Galveston National
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Laboratory at UTMB was particularly significant. That project, which received the single highest point total in ratings by the Texas Higher Education Coordinating Board of all projects statewide, will enable the draw of $110 million in matching federal funds. The Texas Higher Education Coordinating Board reviewed proposed TRB projects and made recommendations to the legislature under a process and criteria newly revised in the spring of 2006. HB 153 was enacted in light of the revised criteria and the resulting coordinating board recommendations. The coordinating board, under guidance from the legislature, will continue to review and revise those criteria in the interim preceding the 80th Regular Session. Effective May 31, 2006 By: Max Werkenthin/Steve Collins HB 149 by Chisum Relating to the ownership and use of carbon dioxide captured by a clean coal project. HB 149 addresses the FutureGen project, a public-private enterprise to develop the world’s first near-zero-emissions coal-fired electric generation plant. The U.S. Department of Energy (DOE) and the FutureGen Industrial Alliance are considering proposals for the $1 billion demonstration. In a proposal in which the UT Austin Bureau of Economic Geology is participating, two host sites are proposed for Texas: in West Texas, near Odessa, and in East Texas, near Jewett. This bill addresses ownership and liability issues that may arise under the project and is intended to align Texas law with requirements of the DOE request for proposals. A list of final candidates is expected to be announced in late summer of 2006. HB 149 requires the Railroad Commission to acquire title to carbon dioxide captured by a clean coal project. The right, title, and interest in that carbon dioxide are the property of the Railroad Commission and are required to be administered and controlled by the commission in the name of the state. The transfer shall be made without cost, other than administrative or legal costs incurred in making the transfer, and the transfer does not relieve an owner or operator of a clean coal project of liability for any act or omission regarding the generation of carbon dioxide performed before the carbon dioxide was captured. Any carbon dioxide that is not injected for permanent storage may be sold. The potential market for the captured carbon dioxide is its use for enhanced oil recovery, a process in which Texas is already recognized as a world leader. The bill also authorizes UT System and the permanent university fund (PUF) to enter into a lease with the Railroad Commission, or with an owner or operator of a clean coal project, for the use of lands owned or controlled by the System or fund for the permanent storage of carbon dioxide captured by a clean coal project. The lease must adequately indemnify UT System and the fund against liability for personal injury or property damage incurred by the System or fund as a result of the escape or migration of the carbon dioxide after it is injected into a zone or reservoir. The potential for any such injury or damage is considered remote.
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The bill expressly preserves the application of the Texas Tort Claims Act to activities under such a lease. Impact: The construction and operation of the FutureGen project will have significant positive economic impact wherever located. The UT System and PUF stand to benefit positively if a lease is successfully negotiated to use PUF or System lands for storage of the captured carbon dioxide, although lands that are used for storage of the carbon dioxide will be permanently unavailable for oil and gas production. In authorizing that use, the Board of Regents required that the PUF and System be indemnified against any liability, and accordingly that indemnity provision will be a key element of any such lease. Effective September 1, 2006 By: Karen Lundquist/Steve Collins HB 1 by Chisum Relating to public school finance, property tax relief, public school accountability and programs, and related matters; making an appropriation. HB 1 is an omnibus bill that addresses public school finance, property tax relief, and public school accountability and programs. Although the majority of the provisions of interest or application to UT System are provisions affecting UT System institution charter schools, some provisions have separate, direct impact on institutions of higher education, such as the electronic student records system described below. An analysis of other provisions of the bill that may be of interest to charter school administrators may be found at www.house.state.tx.us/analyses/hro/research.php. Article 1 of the bill relates to public school finance and property tax relief. Because UT System institution charter schools (UT charter schools) receive state funds in a manner similar to a school district, Article 1 may impact the funding for UT charter schools. Impact: HB 1 does not contain an express provision that would provide a “hold harmless” to protect charter schools from loss of state funding. Under the law governing state funding of open-enrollment charter schools (including university charter schools), the compression of local tax rates may result in a reduction of the state funds to which charter schools are entitled. This is likely an unintended consequence, and the Texas Education Agency (TEA) has not yet advised charter schools of the agency interpretation of the effect of the changes. University personnel responsible for charter schools should closely monitor this issue as it develops. Article 2 of the bill relates to fiscal accountability. Sections of particular interest or applicability to UT System institutions are Sections 2.01 – 2.03. Section 2.01 of the bill authorizes the commissioners of education and higher education to establish up to three education research centers. A center will conduct research for the
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benefit of education in the state, including research relating to the impact of state and federal education programs, the performance of educator preparation programs, public school finance, and the best practices of school districts with regard to classroom instruction, bilingual education programs, special language programs, and business practices. A research center may be established as part of an institution of higher education, and may be operated under a memorandum of understanding between the commissioner of education, the coordinating board, and the institution’s governing board. The memorandum must provide for direct, joint supervision by the commissioners or their designees. The commissioner of education and the coordinating board may require a research center to conduct certain research projects considered to be of particular importance to the state and must provide sufficient funds to finance the project. A research center is authorized to use data on student performance, including confidential data, and is required to comply with rules to protect the confidentiality of student data. The commissioner of education is authorized to use funds appropriated to the agency for the purpose of establishing a research center. Thereafter, the research center must be funded by gifts, grants, and fees imposed for using a center’s research, resources, or facilities. Impact: This section facilitates research that is restricted under current law by limits on the availability of student information, including information sought purely for research purposes. UT System institutions will be eligible to become a center for conducting research education. Several UT System institutions are currently engaged in education research, particularly research important to improving PK-12 education and aligning PK-12 with higher education, that would be facilitated by this opportunity for enhanced access to student information. Section 2.02 of the bill requires the TEA to contract for services to develop, implement, and maintain a system of collecting and evaluating the best campus practices of campuses and school districts relating to instruction, resource allocation, and business practices. In awarding the contract, the agency must consider an applicant’s demonstrated competence and qualifications in analyzing campus and school district practices. Impact: UT System institution colleges or centers that have appropriate expertise will have the opportunity to submit proposals and compete for the contract award. Section 2.03 of the bill relates to administrative efficiency and requires each regional education service center to assist a school district board of trustees in entering into an agreement with other entities, including institutions of higher education, for a cooperative shared services arrangement regarding administrative services, including transportation, food service, purchasing, and payroll functions. The section authorizes the commissioner of education to require an open-enrollment charter school to enter into a cooperative shared services arrangement for administrative services if the commissioner determines after an audit of the school that such an arrangement would promote the efficient operation of the school.
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Impact: UT open-enrollment charter schools are subject to the authority of the commissioner of education to require an open-enrollment charter school to enter into a cooperative shared services arrangement for administrative services under certain circumstances. Article 3 of the bill relates to academic accountability. Sections of particular interest or applicability to UT System institutions are Sections 3.01, 3.09, 3.10, and 3.13-3.22. Section 3.01 of the bill requires each school district, open-enrollment charter school, and institution of higher education to participate in an electronic student records system that satisfies standards approved by the commissioners of education and higher education. The system must permit an authorized state or district official or an authorized representative of an institution of higher education to electronically transfer to and from an institution in which the student is enrolled certain education records, and to retrieve student transcripts. The education records must include course and grade completion, teachers of record, assessment instrument results, receipt of special education services including individualized education programs, and personal graduation plans. The commissioner of education or higher education may solicit and accept grant funds to maintain the system and to make it available. A private or independent institution of higher education may participate in the system, but must provide the funding to do so. Any person involved in the transfer and retrieval of student information is subject to any state or federal law governing the release of or access to any confidential information to the same extent as the educational institution from which the data is collected. Data may not be released to any other person in a form that contains confidential information. The electronic student records system must be implemented not later than the 2007-2008 school year. Impact: All UT System institutions and UT charter schools will be required to have record systems compliant/compatible with the standards adopted by the commissioners of education and higher education. Section 3.09 of the bill requires the commissioner of education to develop a method to measure a student’s annual improvement on assessment instruments administered to determine academic skills. For a student of limited English proficiency, TEA is required to use a student’s performance data on reading proficiency assessment instruments in English to calculate the student’s progress toward dual language proficiency. TEA is required to determine the necessary annual improvement for the student to pass the exit-level assessment test. Schools would be required to report this information to certain teachers of the student and to parents. This section must be implemented beginning with the 2007-2008 school year.
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Impact: This provision impacts UT charter schools that administer assessment instruments to determine academic skills. Once receiving the required performance comparisons from TEA, the school is required to provide written notice to the student’s parents regarding his/her child’s performance comparisons. Section 3.10 of the bill requires performance indicators concerning the measure of progress toward preparation for postsecondary success and toward dual language proficiency for students of limited English proficiency. Section 3.23 of the bill requires TEA to collect that information by the 2007-2008 school year, and to include it in its performance evaluation of school districts, campuses, and open-enrollment charter schools by the 2008-2009 school year. Impact: This provision impacts UT charter schools because it adds two performance indicators upon which the school performance and accreditation ratings will be based. Sections 3.13 through 3.22 of the bill impact UT charter schools, which by law are generally subject to Chapter 39, Education Code, regarding public school accountability. Section 3.13 requires the commissioner of education to annually determine a school district’s accreditation status. In addition to the academic accountability standards currently in place, school districts will be evaluated on financial accountability. They may also be evaluated on such standards as compliance with the Public Education Information Management system (PEIMS) requirements, high school graduation requirements, and the effectiveness of the district’s programs for special populations. Based on a school district’s performance on these criteria, the commissioner of education shall assign a school district an accreditation status or shall revoke accreditation and order closure of the district. A school district that receives “accredited-warned” or “accredited-probation” status is required to notify parents and property owners in the district. A school district that is not accredited may not receive state funds. A school district that does not satisfy accreditation criteria, including academic performance and financial accountability, is subject to a variety of sanctions that may be imposed by the commissioner of education. The bill allows TEA to take more immediate action to impose various sanctions. The procedures to challenge sanctions are limited to substantial evidence review with the hearing conducted by the State Office of Administrative Hearings. Section 3.19 of the bill specifically provides that the sanctions authorized for a school district apply in the same manner to an open-enrollment charter school, and authorizes the commissioner of education to adopt rules relating to those sanctions. Impact: UT charter schools are generally subject to the same described standards and sanctions as other open-enrollment charter schools. Article 4 of the bill relates to educational employees. Sections of particular interest or applicability to UT System institutions are Sections 4.01, 4.02, and 4.08. Section 4.01 of the bill requires TEA to develop and implement a school leadership pilot program for principals. TEA is required to consult with business schools, departments, or
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programs at institutions of higher education to develop course work focusing on management and business training. Impact: UT System institution business programs or education programs may have the opportunity to provide input regarding management and business training provided by the principal leadership program. Section 4.02 of the bill requires each open-enrollment charter school to increase the compensation of certain employees. Charter holders that did not participate in the insurance program under Chapter 1579, Insurance Code, for the 2005 – 2006 school year are required to provide employees of the charter holder, other than administrators, compensation in the form of annual salaries, incentives, or other compensation as determined by the charter holder that results in an average compensation increase to classroom teachers, full-time librarians, full-time counselors, and full-time school nurses who are employed by the charter holder and would be entitled to a minimum salary under Section 21.402, Education Code, if they were employed by a school district, in an amount at least equal to $2000. Those employees who would be entitled to a minimum salary under Section 21.402 are classroom teachers, full-time librarians and full-time counselors certified under Subchapter B, Chapter 21, Education Code, and full-time school nurses. The charter holder is entitled to additional state aid equal to the product of $2000 multiplied by the number of classroom teachers, fulltime librarians, full-time counselors, and full-time school nurses employed by the charter school. Impact: This provision impacts UT charter schools that employ these professionals. UT charter schools will be required to increase the compensation of these employees as indicated above and will be entitled to additional state aid based on the number of these professionals employed. Section 4.08 of the bill requires the commissioner of education to establish a grant program for student achievement. A campus, including an open-enrollment charter school, is eligible if it is in the top half of state elementary, middle or junior high, high school, or all grade level campuses, as applicable, in the percentage of educationally disadvantaged students enrolled at the campus and is either rated exemplary or recognized or ranked in the top quartile of campuses in comparable improvement in mathematics or reading. A campus is also eligible if it is a registered alternative education campus that has a student enrollment of at least 30 students, is rated under alternative education accountability procedures, and is ranked in the top third for its grade level in the percentage of educationally disadvantaged students enrolled who perform successfully on assessment instruments administered under Chapter 39, Education Code. An eligible campus that intends to participate must develop a campus incentive plan in accordance with specific procedures. An eligible campus whose campus incentive plan is approved by TEA is entitled to a grant award, at least 75 percent of which must be used to provide incentive payments to classroom teachers assigned to the campus who demonstrate success in improving student achievement. This section of the bill also requires the commissioner of education to establish an educator excellence awards grant program. The commissioner is required to adopt rules governing
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open-enrollment charter school eligibility and participation in the program. An eligible campus that intends to participate must develop a local awards plan in accordance with specific procedures. The incentive plan developed for the student achievement program referenced above may be used in whole or part for the local awards plan. If grant funds are awarded under this program, at least 60 percent must be used to award classroom teachers who improve student achievement. The provision also imposes specific requirements for the distribution of any remaining funds. Impact: This section authorizes UT charter schools that have a high enrollment of educationally disadvantaged students and have demonstrated success on student assessment instruments to develop a plan and apply for grant money to be used to reward teachers. It also provides for an educator excellence grant program that UT charter schools could apply for to receive grant funding that could be used to award classroom teachers who improve student achievement and for other specific uses. Article 5 of the bill relates to high school success and college readiness. Sections of particular interest or applicability to UT System institutions are Sections 5.01 – 5.06 and 5.08. Section 5.01 of the bill requires the commissioners of education and higher education to establish vertical teams composed of public school educators and institutions of higher education faculty. The teams must recommend college-readiness standards and expectations, evaluate whether the high school curriculum serves to prepare students to successfully perform college-level work, recommend changes to the curriculum requirements, develop instructional strategies for teaching courses to prepare students for college, and develop minimum standards for curricula and related materials for students who need additional assistance in preparation. However, the State Board of Education retains its authority concerning the required curriculum. The college-readiness standards must be incorporated into the essential knowledge and skills identified by the State Board of Education. Section 5.01 of the bill also requires each school district to implement a college credit program not later than the fall 2008 semester under which a student may earn the equivalent of at least 12 semester credit hours of college credit in high school. On request, institutions of higher education are required to assist a school district in developing and implementing such a program. Impact: UT System institution faculty members may have the opportunity to participate on teams established by the education commissioners to recommend college-readiness standards and expectations. UT System institutions will also be required, at the request of a school district, to assist the school district in developing and implementing a program that will allow a student to earn the equivalent of 12 semester credit hours of college credit in high school. The bill does not address costs the institution may incur in assisting the school district nor limit the number of school districts an institution is required to assist.
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Section 5.02 of the bill requires the State Board of Education to require by rule that curriculum requirements for the recommended and advanced high school programs include a requirement that students successfully complete four courses in each subject of the foundation curriculum (English language arts, mathematics, science, and social studies), and that at least one course include a research writing component. Impact: To the extent that a UT charter school has high school programs, this section impacts minimum curriculum requirements. Further, to the extent that UT System institution colleges, departments, or centers develop or are involved in high school curricula, this section may impact that work. Section 5.03 of the bill authorizes a school district to apply to the commissioner of education to provide a flexible school day program for students in grades nine through 12 who have dropped out of school or are at risk of dropping out, or who attend a campus that is implementing an innovative redesign of the campus or an early college high school. Impact: This provision impacts UT charter schools that teach the students described by this section because this provision would allow full-day funding for an approved flexible school day program. Section 5.04 of the bill provides for the establishment of a Texas governor’s school program. The program is a summer residential program for high-achieving high school students, and the curricula may include mathematics and science, humanities, or leadership and public policy. Public universities may apply to the commissioner of education to administer the program, and the commissioner is required to give preference to a college or university that applies in cooperation with a nonprofit association. The commissioner is required to give additional preference if the nonprofit association receives private foundation funds that may be used to finance the program. From funds appropriated to TEA, the commissioner may grant up to $750,000 each year to a college or university whose application is approved to pay the costs of administering the program. Impact: UT System institutions are eligible to apply to administer the Texas governor’s school program. Section 5.05 of the bill requires TEA to ensure that any end-of-course assessment instrument is developed so that it may be used to determine the appropriate placement of a student in a course of the same subject matter at an institution of higher education. Impact: An end-of-course assessment for high school courses will assist UT System institutions in determining college course readiness. Section 5.06 of the bill requires TEA to develop standards to evaluate the success and costeffectiveness of high school and college readiness programs and provide guidance for their improvement. The section also provides that funds generated from the high school allotment must be used for college readiness programs, programs that encourage students to pursue advanced academic opportunities, programs providing academically rigorous course
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work, programs aligning the curriculum for grades six through 12 with postsecondary curricula and expectations, or other high school completion and success initiatives approved by the commissioner of education. An open-enrollment charter school is entitled to such an allotment in the same manner as a school district. Impact: UT charter schools that receive high school allotments for grades nine-12 must use the high school allotment to promote college readiness as detailed in statute and by commissioner rule or approval. Section 5.08 of the bill requires the P-16 Council to recommend to the commissioner of education and the coordinating board a college readiness and success strategic action plan to increase student success and decrease the number of students enrolling in developmental course work in institutions of higher education. By December 1 of each even-numbered year, the commissioner of education and the coordinating board must submit a report describing progress in implementing the college readiness and success strategic action plan. The section also requires the coordinating board by rule to develop summer higher education bridge programs, incentive programs for institutions of higher education that implement research-based, innovative developmental education initiatives, financial assistance programs for educationally disadvantaged students who take college entrance and college readiness assessment instruments, professional development programs for faculty of institutions of higher education on college readiness standards and their implication on instruction, and other programs that support the participation and success goals in “Closing the Gaps.” Additionally, the coordinating board is required to implement a project under which selected institutions of higher education will review and revise entry-level lower division academic courses. The coordinating board is required to recruit institutions of higher education by September 1, 2006, and each participating institution of higher education must begin offering courses reviewed and revised by the institution by September 1, 2007. The institution must submit a report to the coordinating board by September 1, 2009, and the coordinating board must report to the legislature by January 1, 2011, describing the results of the project. Impact: UT System academic institutions may be selected to participate in a project to review and revise entry level courses to increase the effectiveness and efficiency of course delivery. Article 10 of the bill relates to health and safety. A section of particular interest or applicability to UT System institutions is Section 10.01. Section 10.01 of the bill allows a student to self administer anaphylaxis medicine (medicine that controls an allergic reaction or other extreme sensitivity to a particular substance). Impact: UT charter schools will be required to allow a student to self-administer anaphylaxis medicine if the student demonstrates to appropriate health personnel the ability to do so.
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Effective Dates: Section 3.01: Section 3.10: Section 5.01: Section 5.08: Implemented by the 2007-2008 school year Implemented beginning with the 2007-2008 school year College credit program implemented by the fall 2008 semester Implemented beginning September 2006
Other sections not specifically indicated above are effective May 31, 2006 By: Priscilla Lozano/Steve Collins
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