PRESS RELEASE
From the Office of State Senator Rodney Ellis

For Immediate Release
March 1, 2001
Contact: Jeremy Warren, (512) 463-8393

Senate Finance Committee Passes Ellis Plan to Boost Research Funding for Texas Universities
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(Austin)// The Senate Finance Committee today passed legislation by Senator Rodney Ellis (D Houston) to boost research funding for Texas universities.

By a vote of 9-1, the committee passed SB 737, legislation creating the Texas Excellence Fund to promote research at near-flagship Texas universities such as the University of Houston and Texas Tech University. Senate Bill 737 will now be considered by the full Senate.

The Texas Excellence Fund will increase research capacity and funding for many Texas colleges and universities that participate in the Higher Education Fund (HEF). The new Fund will focus resources on those institutions that are on the edge of "Tier I" status and need a final boost to move them to the next level.

"The economic future of our state depends on our ability to remain on the cutting edge of technology," said Senator Ellis. "The Texas Excellence Fund will give more Texas universities a boost in research in energy, electronics software, biotechnology, aerospace and other vital issues critical to our future."

Under current law, $225 million per year is allocated to the Higher Education Fund. Of that amount, $175 million is disbursed by formula to eligible institutions for capital purposes such as facilities and equipment. The remaining $50 million is devoted to building the corpus of the fund. Once the HEF permanent fund reaches $2 billion, state general revenue appropriations are slated to end and schools would receive their allocations from fund earnings. Presently, earnings are deposited back into the Fund's corpus. At the end of the fiscal year, the HEF permanent fund is expected to total around $300 million.

Senate Bill 737 changes current law by allowing Fund earnings, presently around $16 million per year, to be counted toward the $50 million per year corpus contribution, freeing up additional resources for Texas universities. An amount equal to the interest is then appropriated to the new Texas Excellence Fund. Because the Texas Excellence Fund will tap existing funding sources it will require no new general revenue appropriation.

Under S.B. 737, 80 percent of the Excellence Fund will flow to HEF institutions that meet stringent, close to "Tier I", qualifications, such as providing a full range and variety of bachelors and masters degrees, 45 or more doctoral degrees in specific areas, and at least $15 million in annual restricted research expenditures. Restricted research funds are used because they provide the most accurate measurement of pure research activity at an institution. The remaining 20 percent would be allocated to HEF general academic institutions that do not qualify to participate in the larger pool. In both cases, allocations are to be made based on each institution's restricted research expenditures.

Over the past decade, research and technology have fueled Texas' economic expansion. Currently, Texas ranks second in the nation in the total number of high-tech jobs and first in terms of jobs created since 1990. Today, there are 772,000 high-tech employees in Texas, nearly 11 percent of the state's entire workforce, and more than are employed in the oil and gas drilling, agriculture, food products and petroleum refining sectors combined.

"Research and technology are the engine fueling Texas' economy," said Senator Ellis. "This legislation will provide more funding for research to help ensure Texas meets the challenges of the digital century."

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