Tier-One Prize Money Tentatively Passes House

For those betting on the horse race to be the next state's next public national research — or  tier-one — university, the winners are about to be crowned. Today, the House tentatively passed House Bill 1000 by House Higher Education Chairman Dan Branch, R-Dallas, which creates a mechanism for them to claim their prize money.

Of the seven contenders, designated as "emerging research universities," the two that are expected to pull in first are the University of Houston and Texas Tech University, likely in that order according to the discussion on the House floor. The other schools in the running are the University of North Texas, and University of Texas campuses in Dallas, Arlington, San Antonio and El Paso.

With the approval of Texas voters in November 2009, the dormant Higher Education Fund (which couldn’t be used until it reached the unattainable level of $2 billion) was converted into the National Research University Fund, currently valued at approximately $613 million. As the bill has been amended, in order to gain access to the fund, universities must have at least $45 million expenditures in restricted research funds as well as four of six other criteria, such as an endowment of at least $400 million and at least 200 Ph.D.s conferred over two years.

HB 1000 establishes a system so that when a university becomes eligible for the fund, a 4.5 percent payout is made for the biennium (provided it does not decrease the fund below constitutionally mandated levels). Currently, that amount would be about $28 million. If one school is eligible, the total is divided in half, with half going to the school over the course of the biennium and the other half going back into the fund. If there are two schools, the money is divided into thirds. If three, then fourths. And so on.

Perks of this system, according to Branch, are that it incentivizes universities to finish the race early in order to get a bigger slice of the pie and that, because it puts money back into the fund, it should be sustainable.

Branch predicts that within three years, a total of three schools will be eligible. In addition to University of Houston and Texas Tech, he expects UT-Dallas to reach the goals. "This could be a real shot in the arm to these schools," Branch said.

He noted that the approval on this bill, which has co-authors from representatives who have emerging research universities in their district, is a "continuation of the story which started last session" when they created the tier-one race.

So far, the Legislature has been strongly behind the effort. Today's vote received no opposition, and Branch said he expects it to sail out of the House when it's up for its final vote after third reading. "We're batting one thousand so far," he joked.