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Texas lawmakers reached a deal early Tuesday night to allocate roughly $3.3 billion for capital projects to higher education institutions across the state.
The price tag for the bill went up from the Senate's original proposal of about $3 billion, after the House added more than $200 million in construction projects in its version of Senate Bill 52.
The two chambers hammered out a deal to increase the funds allocated to schools so that every region in the state would get a cut of the money.
The bill also would rename tuition revenue bonds as capital construction assistance projects. Such funds will now be overseen by the Texas Comptroller's contract advisory team and will need to be reported to the Legislative Budget Board's contract database. Sen. Brandon Creighton, R-Conroe, the bill's author, said those additional requirements will add increased oversight for the money the Legislature provides for such construction projects.
“This legislation will forever change and reform the way we consider these capital projects in the future,” Creighton said.
The Legislature moved quickly in the past week to fund campus construction projects as it nears the end of the third special session this year. On Friday, the same day Abbott added “legislation to improve higher education” to his agenda, the Senate approved its list of projects at universities across the state, totaling a little more than $3 billion.
The House version adds more than $200 million in construction projects than the Senate version. It distributes money to more universities, health-related institutions and technical colleges across the state, but in many cases allocates less money per university than the Senate version.
State Rep. Greg Bonnen, R-Friendswood, who laid out the bill on the House floor Sunday, told lawmakers that higher education enrollments have increased by 8% since 2015, the last time the Legislature approved a bill for tuition revenue bonds to pay for building improvements and construction.
“[These projects] have the capacity to provide the types of credentials that our workforce needs today and going into the future, but they also serve an economic purpose throughout our state: creating jobs, both in construction and manufacturing,” Bonnen said. “And then, educating and preparing tomorrow’s workforce once the buildings are complete.”
Tuition revenue bonds are secured with tuition and other charges but are paid back out of state funds.
The House version of the bill provides funding to schools based on the level of research a university conducts, if it’s a regional university, or if it’s a health-related institution or technical college. Many regional public universities like Texas A&M-Kingsville, the University of Texas at Tyler and Stephen F. Austin State University are all receiving the same flat rate.
One exception is Texas Southern University, which lawmakers have stated is in dire need of renovations and facility upgrades, some of them related to the February winter storm. Both the House and Senate versions include around $95 million for the historically Black university.
Bonnen also introduced some additional changes on the House floor, allowing schools to use the money they receive for alternative construction projects up to $40 million, including deferred maintenance or infrastructure. Any change in a project above $40 million would require prior approval from the Legislative Budget Board.
The amended House version includes $30 million in additional funding to three of the founding entities behind a new biomedical research campus at the Texas Medical Center in Houston: Texas A&M University Health Science Center, the University of Texas Health Science Center at Houston and University of Texas MD Anderson Cancer Center. While the Senate version had included around $129 million for Texas A&M and MD Anderson for construction projects within the new medical city, the House added funding for the UT Health Science Center, for a total of $209 million.
It also removed funding from Sul Ross State University and reallocated it to Texas State University in San Marcos. The Senate version of the bill had also not allocated money to Sul Ross State.
The House version establishes a new Capital Project Oversight Commission that will develop guidelines for project approval and help legislators evaluate the merit of future projects.
“Because that is a recurrent challenge,” Bonnen told lawmakers on the House floor Sunday. “How do you best evaluate and assess the request for capital projects that come from all the different universities, and do it in a way that is wise and yields the best return on investment for the people of the state?”
The House included a provision requiring universities to report their contracts for these projects to the Legislative Budget Board.
If Abbott signs this bill, it would also mean these are no longer referred to as tuition revenue bonds, which lawmakers complain are not paid with tuition, but out of the state’s general revenue. While the funding mechanism will remain the same, the bill would change the name to capital construction assistance projects.
Abbott added TRBs to the agenda for the Legislature’s third special session two days after Lt. Gov. Dan Patrick requested them.
Lawmakers can’t pass new laws during a special session that aren’t put on the agenda by the governor.
Before the governor issued that proclamation, lawmakers had been exploring other ways to fit tuition revenue bonds within the parameters of Abbott’s third special session objectives, which also include determining how to spend $16 billion in federal COVID-19 relief money.
Earlier in the session, the Senate included up to $325 million that could be used toward tuition revenue bonds as part of a separate bill divvying up the coronavirus funds, another Abbott priority. In that bill, lawmakers made the federal money contingent on the Legislature passing a bill during the third special session “relating to the issuance of tuition revenue bonds.”
Disclosure: MD Anderson Cancer Center, Sul Ross State University, Texas Southern University, the Texas A&M University System, the Texas State University System and the University of Texas System have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
Correction, Oct. 19, 2021: In a previous version of this story, it was incorrectly stated that Texas State University is a flagship campus. The Texas State University System does not have a flagship university.