TITLE 19. EDUCATION

PART 1. TEXAS HIGHER EDUCATION COORDINATING BOARD

CHAPTER 5. RULES APPLYING TO PUBLIC UNIVERSITIES, HEALTH-RELATED INSTITUTIONS, AND/OR SELECTED PUBLIC COLLEGES OF HIGHER EDUCATION IN TEXAS

SUBCHAPTER B. ROLE AND MISSION, TABLES OF PROGRAMS, COURSE INVENTORIES

19 TAC §5.24

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to §5.24, concerning Criteria and Approval of Mission Statements and Tables of Programs. Specifically, the proposed changes would authorize the elimination of preliminary authority for programs that meet the following criteria: (a) the program has institutional and Board of Regents approval, (b) the program is a non-doctoral program, (c) the program is a non-engineering program, and (d) the program would be offered by a university or health-related institution. The amendments would also permit the Commissioner of Higher Education to approval doctoral-level preliminary authority requests.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the section is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section will be quicker response time to institutions of higher education on actions related to preliminary authority requests in order to meet workforce needs and student demand. There is no effect on small or micro businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to MacGregor M. Stephenson, Assistant Commissioner, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or macgregor.stephenson@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, Chapter 61, which provides the Coordinating Board with the authority to regulate the awarding or offering of degrees, credit toward degrees, and the use of certain terms.

The amendments affect implementation of Texas Education Code, §§61.304 - 61.319 and 61.3021.

§5.24.Criteria and Approval of Mission Statements and Tables of Programs

(a) In reviewing a request for preliminary authority to add a program (baccalaureate, master's, and doctoral) to the institution's Table of Programs, the Commissioner [ Board] shall consider:

(1) - (4) (No change.)

(b) In reviewing a request for preliminary authority to add a doctoral program to the institution's Table of Programs, the Commissioner [Board] shall consider the criteria set out in subsection (a) of this section and the following additional criteria:

(1) - (6) (No change.)

(7) how the program will address Closing The Gaps by 2015; [and]

(8) institutional resources to develop and sustain a high-quality program; and[.]

(9) (No change.)

(c) Review and Approval Process.

(1) - (2) (No change.)

(3) The Board shall approve or re-approve the mission statement [and table of programs of each institution following the review described in paragraph (1) of this subsection]. Each institution shall be given an opportunity to be heard by the Board about these matters.

(4) Preliminary authority is not required if a degree program meets all of the following conditions:

(A) The program has institutional and Board of Regents approval.

(B) The program is a non-doctoral program.

(C) The program is a non-engineering program (i.e., not classified under CIP code 14).

(D) The program would be offered by a university or health-related institution.

(5) All other requests for preliminary authority shall be made using the standard preliminary authority request form and shall be approved or denied by the Commissioner.

(6) [(4)] Outside the normal review process described in paragraph (1) of this subsection, an institution may request of the Board an amendment to its authorized role and mission and/or preliminary authority for additional degree programs at any time the Commissioner determines that compelling circumstances warrant.

(7) [(5)] After approval or re-approval, requests for new programs and administrative changes shall be considered in the context of the approved role and mission for the institution.

(8) [(6)] The Commissioner may approve minor changes to the mission statement [ or table of programs ] of an institution during the period between the reviews referenced in paragraph (1) of this subsection.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901509

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


SUBCHAPTER C. APPROVAL OF NEW ACADEMIC PROGRAMS AND ADMINISTRATIVE CHANGES AT PUBLIC UNIVERSITIES, HEALTH-RELATED INSTITUTIONS, AND/OR SELECTED PUBLIC COLLEGES AND ASSESSMENT OF EXISTING DEGREE PROGRAMS

19 TAC §5.44

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to §5.44, concerning Presentation or Requests and Steps for Implementation. The amendments to §5.44(a) would modify the approval process for new bachelor's and master's programs. Approval of new bachelor's and master's programs would be automatic if they meet the following criteria: (a) the program has institutional and Board of Regents approval; (b) the institution certifies compliance with the Standards for New Bachelor's and Master's Programs developed by the Coordinating Board; (c) the institution certifies that adequate funds are available to cover the costs of the program; (d) new costs during the first five years of the program would not exceed $2,000,000; (e) the program is a non-engineering program (i.e., not classified under CIP code 14); (f) the program would be offered by a university or health-related institution; and (g) no objections to the proposed program are received by the Coordinating Board during the 30-day public comment period. The amendments to §5.44(b) would clarify the approval process for new undergraduate and graduate certificate programs. Approval would be automatic if a new certificate program meets the following criteria: (a) the certificate program has institutional and Board of Regents approval, (b) the institution certifies that adequate funds are available to cover the costs of the program, (c) the certificate programs meets all other criteria in §5.48, and (d) no objections to the proposed certificate program are received by the Coordinating Board during the 30-day public comment period. The amendments to §5.44(c) would clarify the approval process for changes in the administrative structure of an institution of higher education. Approval would be automatic if an administrative change meets the following criteria: (a) the administrative change has institutional and Board of Regents approval; (b) the institution certifies that adequate funds are available to cover the costs of the administrative change; (c) new costs during the first five years would not exceed $2,000,000; (d) the administrative change meets all other criteria in §5.47; and (e) no objections to the proposed administrative change are received by the Coordinating Board during the 30-day public comment period.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the section is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section will be in enabling institutions of higher education to address workforce needs and student demand for new programs more quickly and efficiently. In addition, the public will benefit by the Coordinating Board staff work focusing on the quality of existing degree programs in the state of Texas, rather than on the upfront review. There is no effect on small or micro businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to MacGregor M. Stephenson, Assistant Commissioner, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or macgregor.stephenson@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, Chapter 61, which provides the Coordinating Board with the authority to regulate the awarding or offering of degrees, credit toward degrees, and the use of certain terms.

The amendments affect implementation of Texas Education Code, §§61.304 - 61.319 and 61.3021.

§5.44.Presentation of Requests and Steps for Implementation.

(a) Requests for new degree programs[, certificate programs, and administrative units] shall be made in accordance with the following procedures [ specified by the Commissioner].

(1) Approval of new bachelor's and master's programs is automatic if all of the following conditions are met:

(A) The program has institutional and governing board approval.

(B) The institution certifies compliance with the Standards for New Bachelor's and Master's Programs.

(C) The institution certifies that adequate funds are available to cover the costs of the new program.

(D) New costs during the first five years of the program would not exceed $2 million.

(E) The program is a non-engineering program (i.e., not classified under CIP code 14).

(F) The program would be offered by a university or health-related institution.

(G) No objections to the proposed program are received by the Coordinating Board during the 30-day comment period.

(2) If a proposed bachelor's or master's program meets the conditions in paragraph (1) of this subsection, the institution shall submit a request to the Assistant Commissioner of Academic Affairs and Research to add the program. If a proposed program does not meet the conditions outlined in paragraph (1) of this subsection, the institution must submit a proposal using the standard degree program request form.

(3) The Coordinating Board shall post the proposed program online for public comment for a period of 30 days. If no objections occur, the Coordinating Board staff shall update the institution's program inventory accordingly. No new program shall be implemented until all objections are resolved. The Coordinating Board reserves the right to audit a certificate or degree program at any time to ensure compliance with the any of the criteria outlined in paragraph (1) of this subsection.

(4) An institution requesting a new doctoral program shall submit a proposal using the standard doctoral program request form. All requests for new doctoral programs require preliminary authority prior to the submission of a degree program request.

(b) Requests for new certificate programs shall be made in accordance with the following procedures.

(1) Approval of new undergraduate and graduate certificate programs is automatic if all of the following conditions are met:

(A) The certificate program has institutional and governing board approval.

(B) The institution certifies that adequate funds are available to cover the costs of the new certificate program.

(C) The certificate program meets all other criteria in §5.48 of this title (relating to Criteria for Certificate Programs at Universities and Health-Related Institutions).

(D) No objections to the proposed certificate program are received by the Coordinating Board during the 30-day comment period.

(2) If a proposed certificate program meets the conditions in paragraph (1) of this subsection, the institution shall submit a request to the Assistant Commissioner of Academic Affairs and Research. If a proposed certificate program does not meet the conditions outlined in paragraph (1) of this subsection, the institution must submit a proposal using the standard program request form.

(3) The Coordinating Board shall post the proposed program online for public comment for a period of 30 days. If no objections occur, the Coordinating Board staff shall update the institution's program inventory accordingly. No new certificate program shall be implemented until all objections are resolved. The Coordinating Board reserves the right to audit a certificate program at any time to ensure compliance with the any of the conditions outlined in paragraph (1) of this subsection.

(c) Requests for administrative changes shall be made in accordance with the following procedures. Administrative changes include the creation of new administrative units - such as colleges, schools, divisions, and departments - as well as changes to existing administrative units, such as a name change, consolidation of existing units, or movement of a program into another unit.

(1) Approval of an administrative change is automatic if all of the following conditions are met:

(A) The administrative change has institutional and governing board approval.

(B) The institution certifies that adequate funds are available to cover the costs of the administrative change.

(C) New costs during the first five years would not exceed $2 million.

(D) The administrative change meets all other criteria in §5.47 of this title (relating to Criteria for Administrative Change Requests).

(E) No objections to the proposed administrative change are received by the Coordinating Board during the 30-day comment period.

(2) If a proposed administrative change meets the conditions in paragraph (1) of this subsection, the institution shall submit a request to the Assistant Commissioner of Academic Affairs and Research to update the administrative structure of the institution. If a proposed administrative change does not meet the conditions outlined in paragraph (1) of this subsection, the institution must submit a proposal using the standard administrative change request form.

(3) The Coordinating Board shall post the proposed administrative structure online for public comment for a period of 30 days. If no objections occur, the Coordinating Board staff shall update the institution's administrative unit structure accordingly. No new administrative unit shall be implemented until all objections are resolved. The Coordinating Board reserves the right to audit an administrative unit at any time to ensure compliance with the any of the conditions outlined in paragraph (1) of this subsection.

[(b) Requests for new degree and certificate programs and for administrative changes require:]

[(1) Approval by the Board of preliminary authority, if needed prior to Board consideration; all requests for doctoral programs require preliminary authority prior to Board consideration.]

[(2) Approval by the governing board of the institution concerned;]

[(3) Certification of adequate funding by the institution; and]

[(4) Final approval by the Board, or by the Commissioner if permitted under §5.50 of this title (relating to Approvals by the Commissioner).]

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901510

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


19 TAC §5.52

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new §5.52. The new section would require each public institution of higher education to have a process to assess the quality and effectiveness of existing degree programs for continuous improvement. The new section would authorize the Coordinating Board staff to develop a process for conducting a periodic audit of the quality and effectiveness of existing bachelor's and master's programs at public institutions of higher education.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the chapter is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the chapter is in effect, the public benefit anticipated as a result of administering the section will be in enabling institutions of higher education to address workforce needs and student demand for new programs more quickly and efficiently. In addition, the public will benefit by the Coordinating Board staff work focusing on the quality of existing degree programs in the state of Texas, rather than on the upfront review. There is no effect on small or micro businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to MacGregor Stephenson, Assistant Commissioner, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or macgregor.stephenson@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The new section is proposed under the Texas Education Code, Chapter 61, which provides the Coordinating Board with the authority to regulate the awarding or offering of degrees, credit toward degrees, and the use of certain terms.

The new section affects implementation of Texas Education Code, §§61.3021 and 61.304 - 61.319.

§5.52.Assessment of Existing Degree Programs.

(a) In accordance with the requirements of the Southern Association of Colleges and Schools, each public institution of higher education shall have a process to assess the quality and effectiveness of existing degree programs and for continuous improvement.

(b) The Coordinating Board staff shall develop a process for conducting a periodic audit of the quality, productivity, and effectiveness of existing bachelor's and master's programs at public institutions of higher education.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901511

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


SUBCHAPTER D. OPERATION OF OFF-CAMPUS EDUCATIONAL UNITS OF PUBLIC SENIOR COLLEGES, UNIVERSITIES AND HEALTH-RELATED INSTITUTIONS

19 TAC §5.78

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to §5.78. The amendments would change the requirement of an off-campus educational unit on the Supply/Demand Pathway of attaining full-time equivalent enrollments of 3,500 from four fall semesters to one semester to become eligible to be a stand-alone institution.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the chapter is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the chapter is in effect, the public benefit anticipated as a result of administering the section will be the ability of an off-campus education unit to potentially serve a great number of students by more quickly becoming a stand-alone institution. There is no effect on small or micro businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to MacGregor Stephenson, Assistant Commissioner, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or macgregor.stephenson@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, Chapter 61, which provides the Coordinating Board with the authority to regulate the awarding or offering of degrees, credit toward degrees, and the use of certain terms.

The amendments affect implementation of Texas Education Code, §§61.3021 and 61.304 - 61.319.

§5.78.Supply/Demand Pathway.

(a) - (b) (No change.)

(c) The supply/demand pathway consists of three categories:

(1) - (2) (No change.)

(3) Category C. After an entity in Category B has attained a full-time equivalent upper-level and graduate enrollment of 3,500 for one [four] fall semester [ semesters], the parent institution(s) and Board(s) of Regents may request that the Board review the status of the center and recommend that the Legislature reclassify the unit as an upper-level general academic institution--a university. [Reclassification may be considered sooner if the center attains a fall semester full-time equivalent enrollment of 3,500 followed the next fall semester by a full-time equivalent enrollment of 4,000.] The 3,500 FTSE standard approximates the headcount enrollment included in the current university funding formula as the minimum size needed to achieve economies of scale.

(d) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901512

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


CHAPTER 13. FINANCIAL PLANNING

SUBCHAPTER G. RESEARCH DEVELOPMENT FUND

19 TAC §§13.120 - 13.125

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to §§13.120 - 13.125 regarding Research Development Fund. The proposed revisions are needed to streamline and clarify existing rules and to establish new auditing rules. The Restricted Research Review Panel (Review Panel), consisting of representatives from Research Development Fund eligible institutions, would evaluate all restricted research projects, activities, and awards. Current rules provide review for only projects with awards of greater than $250,000. The Review Panel would make a determination on each research award to determine if it should be classified as restricted research. Each institution receiving research development funds would be required to audit the classified awards to ensure that the restricted research awards and related expenditures were properly classified. The audit report would be required and included as part of the annual financial report. The audit report would also include a description of how the restricted research funds were spent. The Commissioner may require a separate audit to verify the submitted information.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the sections are in effect, there will not be any fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administering the section would be increased accuracy in restricted research classification and greater institutional accountability of research awards. An additional benefit would be greater efficiency in administration of the restricted research awards review process. Notably, the current rules call an audit process that has not been implemented because of its high cost and expertise requirements. The revised rules would allow the Review Panel to review and make determinations on restricted research classification of projects submitted by eligible institutions. The current rule requires the Review Panel to only evaluate institution projects greater than $250,000. Increasing the role of the Review Panel would appropriately align the classification process with research experts, rather than institutional internal auditors as currently constructed in rule. Institutions that receive funding under the Research Development Fund would be required to conduct an audit of restricted research expenditures and report their findings to the Coordinating Board in conjunction with their Annual Financial Report. The Commissioner could also require a separate audit if necessary. There is no effect on small businesses or micro businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Stacey Silverman, Director of Academic Research and Grant Programs, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or Stacey.Silverman@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, Chapter 62, Subchapter E, which creates the Research Development Fund and provides the Coordinating Board with the authority to create the standards and accounting methods for determining the amount of restricted research funds expended by each eligible institution per year, convening a committee to approve those methods, and providing the Comptroller with verified information regarding the apportionment of the funds to each eligible institution.

The amendments affect implementation of Texas Education Code, Subchapter E, §§62.091 - 62.098.

§13.120.Purpose and Scope.

The purpose of this subchapter is to establish standards and accounting methods for determining restricted research expenditures, [the process] for reporting [of ] verified restricted research expenditures to the Comptroller of Public Accounts, for reporting how funds were expended during the fiscal year, [and the process] for auditing [audit of] the reported restricted research expenditures, and for appealing [ appeal of] decisions relating to restricted research expenditures.

§13.121.Authority.

Texas Education Code, §62.091, establishes the Research Development Fund to promote increased research capacity at eligible general academic teaching institutions. Texas Education Code, §62.096, authorizes the Coordinating Board, with the assistance of an advisory committee, to prescribe standards and accounting methods for determining the amount of restricted research funds expended by an eligible institution in a state fiscal year [methods for the verification of allocation factors for the Research Development Fund].

§13.122.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Norman Hackerman Advanced Research Program, [ /] Advanced Technology Program [(ARP/ATP)]--research programs administered by the Board under Texas Education Code, Chapters 142 and 143.

(2) Advisory committee--The Coordinating Board's Restricted Research Advisory Committee.

(3) - (18) (No change.)

(19) Pass-Throughs to Sub-recipients [Subrecipients ]--external award funds passed from one entity ("pass-through" entity) to another entity sub-recipient [(subrecipient)]. The sub-recipient [subrecipient] administers the program, expending the award funds on behalf of or in connection with the pass-through entity.

(20) - (21) (No change.)

(22) Research Development Fund--a method of allocating funds based on institutional restricted research expenditures and [ fund] established outside the state treasury to promote increased research capacity at eligible general academic teaching institutions under Texas Education Code, §§62.091 - 62.098.

(23) (No change.)

(24) Restricted research expenditures--expenditures from restricted funds (restricted awards) used for research and development.

(25) [(24)] Sponsored Instruction and Training--specific instructional or training activity established by grant, contract, or cooperative agreement with federal, state, or local governmental agencies; private philanthropic organizations and foundations; for-profit businesses; or individuals. Sponsored Instruction includes:

(A) any project for which the primary purpose is to instruct any student at any location; recipients of this instruction may be university students or staff, teachers or students in elementary or secondary schools, or the general public, except for those activities defined in paragraph (26) [Paragraph (25)] of this section;

(B) curriculum development projects at any level either to improve significantly or to add to an institution's general instructional offerings, and do not include R&D;

(C) projects that involve university students in community service activities for which they are receiving academic credit;

(D) activities funded by awards to departments or schools for the support of students, except for those activities defined in paragraph (26)(E) [(25)] of this section [ Section] as Sponsored R&D;

(E) dissertation work funded by grants, including grants for travel in relation to a dissertation, unless associated with a R&D activity as defined in paragraph (21) of this section [ Section];

(F) outreach programs that bring local students on campus for classes; or

(G) general support for the writing of textbooks or reference books, video, or software to be used as instructional materials.

(26) [(25)] Sponsored Research and Development (Sponsored R&D)--activity funded (sponsored) by grants, gifts, and/or contracts, including sponsored research contracts, that are designated by the sponsor as primarily for R&D purposes. The activity must be sponsored by federal, state, or local governmental agencies; private philanthropic organizations and foundations; for-profit businesses; or individuals. Sponsored R&D includes:

(A) awards to university faculty to support R&D activities;

(B) external faculty "career awards" to support the R&D efforts of the faculty;

(C) external funding to maintain facilities or equipment and/or operation of a enter or facility that will be used for R&D;

(D) external support for the writing of books, when the purpose of the writing is to publish R&D results;

(E) activities involving the training of individuals in R&D techniques (commonly called R&D training) where such activities utilize the same facilities as other R&D activities and where such activities are not included in the Instruction function;

(F) the research portion of expenditures in the federal work-study program, in accordance with instructions for preparing the annual financial report that is submitted by an institution to the Comptroller after each fiscal year ends; or

(G) clinical trial agreements in which data collection and analysis are the primary components of the institution's role in the trial, excluding costs that are covered by patient charges or similar sources.

(27) [(26)] University Research and Development (University R&D)--activity that is supported by unrestricted university funds that the university has designated for use in R&D, such as unrestricted gifts, distributions from unrestricted endowments, interest income, technology licensing income, fees received from external entities for non-research services, proceeds from cost recovery enterprises, state appropriations not identified specifically by the legislature for R&D purposes, non-capitalized allocations from the PUF or HEAF for R&D purposes other than construction and remodeling, state appropriations made directly to the university for R&D through formula or special item funding including Norman Hackerman Advanced Research Program, ATP [ARP/ATP], or cost-sharing expenditures by the university.

§13.123.Restricted Research Advisory Committee.

The Commissioner shall appoint an advisory committee to review and recommend changes to standards and accounting methods for determining restricted research expenditures.

(1) - (2) (No change.)

(3) At least 30 days prior to [the first] meeting [ each calendar year], the Commissioner shall inform the presidents [president(s)] of [a] selected institutions [institution(s)] that they [he or she] may [each ] recommend an institutional representative to serve [ fill a vacant position] on the advisory committee.

(4) (No change.)

(5) The [At its first meeting during each calendar year, the] advisory committee shall elect a member to serve as its chair.

(6) (No change.)

§13.124.Standards and Accounting Methods for Determining Restricted Research Expenditures.

(a) Only [those] expenditures from restricted research awards made from the following types of projects and activities and sponsored by federal, state, or local governmental agencies; private philanthropic organizations and foundations; for-profit businesses; or individuals shall be classified as restricted research expenditures:

(1) Sponsored R&D, as defined in §13.122 of this title (relating to Definitions).

(2) Industrial Collaboration Agreements for R&D activities, as defined in §13.122 of this title [(relating to Definitions) with universities, colleges, centers, or institutions].

(3) Demonstration Projects, as defined in §13.122 of this title [(relating to Definitions)], which have a significant new R&D component.

(4) Sponsored instruction and training, as defined in §13.122 of this title [(relating to Definitions)], for curriculum development projects when the primary purpose of the project is developing and testing an instructional or educational model through appropriate research methodologies that include data collection, evaluation, dissemination, and publication.

(5) Multiple Function Awards, as defined in §13.122 of this title [(relating to Definitions),] if the scope or activities [activity] of the restricted awards include [award includes] R&D, these are subject to the following limitation: if the purpose of a restricted award is primarily (more than 50 percent) research, then all expenditures made from that award qualify as restricted research expenditures. If the purpose of the restricted award is not primarily research (less than 50 percent), then none of the expenditures may be counted as restricted research. Primary purpose will normally be demonstrated by more than half of the funds having been budgeted for research, but may be demonstrated by the sponsor's statement of purpose or other documented evidence.

(b) (No change.)

§13.125.Report on Restricted Research Awards [ Projects and Activities ].

(a) Not later than June 30, each eligible institution shall provide to the Commissioner a verified report of all restricted research awards [projects and activities] for the current state fiscal year [specifically identifying awards greater than $250,000 in annual funding]. Only those projects or activities described in §13.124 of this title (relating to Standards and Accounting Methods for Determining Restricted Research Expenditures) shall be included in the report.

(1) [(b)] Classified military projects or any sponsored program deemed confidential or proprietary by funding entities shall not be included in the award lists.

(2) If the project or activity is pursuant to an award from the federal government, it shall be classified by the federal government as R&D.

(3) [(c)] The report shall be in a format and with the specific content prescribed by the Commissioner.

[(d) Only those projects or activities described in §13.124(a) of this title (relating to Standards and Accounting Methods for Determining Restricted Research Expenditures) shall be included in the report.]

[(e) All projects and activities reported by institutions shall be classified in accordance with these rules and, if the project or activity is pursuant to an award from the federal government, shall be classified by the federal government as R&D]

(4) [(f)] The report shall indicate the person or persons who determined that the projects or activities were restricted research projects or activities.

(5) [(g)] The Commissioner shall provide the reports made under this section to each eligible institution.

(b) Not later than July 31 of each year, the Commissioner shall convene a review panel of representatives of all eligible institutions. The president of each eligible institution shall recommend the institution's representative on the review panel.

(1) The Commissioner shall provide each review panel member with a copy of each eligible institution's report on restricted research awards.

(2) The review panel shall examine the institutions' reports on restricted research awards and provide a report to the Commissioner, recommending to the Commissioner those awards from which expenditures may be classified as restricted research expenditures.

(3) The Commissioner shall review the report of the review panel and determine those awards from which expenditures may be classified as restricted research expenditures.

(4) Not later than August 15, the Commissioner shall provide each institution with a copy of the recommendations of the review panel and notify each institution of its awards from which expenditures may be classified as restricted research expenditures.

(5) If an institution wishes to appeal the classification of a restricted research award, the President of the institution shall notify the Commissioner, in writing, not later than September 1. The Commissioner will review the appeal, determine whether to re-classify the expenditure, and notify the institution of the decision.

[(h) Institutions that fail to provide a report of restricted research projects and activities shall not be eligible for an allocation from the Research Development Fund and shall not be included in the Board's report to the Comptroller.]

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 24, 2009.

TRD-200901532

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


19 TAC §§13.126 - 13.130

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Higher Education Coordinating Board or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Higher Education Coordinating Board (Coordinating Board) proposes the repeal of §§13.126 - 13.130 regarding the Research Development Fund. The proposed repeal of these sections is needed to streamline and clarify existing rules and to establish new auditing rules. The Restricted Research Review Panel (Review Panel), consisting of representatives from Research Development Fund eligible institutions, would evaluate all restricted research projects, activities, and awards. Current rules provide review for only projects with awards of greater than $250,000. The Review Panel would make a determination on each research award to determine if it should be classified as restricted research. Each institution receiving research development funds would be required to audit the classified awards to ensure that the restricted research awards and related expenditures were properly classified. The audit report would be required and included as part of the annual financial report. The audit report would also include a description of how the restricted research funds were spent. The Commissioner may require a separate audit to verify the submitted information.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the chapter is in effect, there will not be any fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the chapter is in effect, the public benefit anticipated as a result of administering the section would be increased accuracy in restricted research classification and greater institutional accountability of research awards. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Stacey Silverman, Director of Academic Research and Grant Programs, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or Stacey.Silverman@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The repeal of these sections is proposed under the Texas Education Code, Chapter 62, Subchapter E, which creates the Research Development Fund and provides the Coordinating Board with the authority to create the standards and accounting methods for determining the amount of restricted research funds expended by each eligible institution per year, convening a committee to approve those methods, and providing the Comptroller of Public Accounts with verified information regarding the apportionment of the funds to each eligible institution.

The repeal of these sections affect implementation of Texas Education Code, Subchapter E, §§62.091 - 62.098.

§13.126.Restricted Research Review Panel.

§13.127.Report of Restricted Research Expenditures.

§13.128.Report to the Comptroller.

§13.129.Reviews and Appeals.

§13.130.Audits.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 24, 2009.

TRD-200901534

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


19 TAC §13.126, §13.127

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new §13.126 and §13.127 regarding the Research Development Fund. The new sections are needed to streamline and clarify existing rules and to establish new auditing rules. The Restricted Research Review Panel (Review Panel), consisting of representatives from Research Development Fund eligible institutions, would evaluate all restricted research projects, activities, and awards. Current rules provide review for only projects with awards of greater than $250,000. The Review Panel would make a determination on each research award to determine if it should be classified as restricted research. Each institution receiving research development funds would be required to audit the classified awards to ensure that the restricted research awards and related expenditures were properly classified. The audit report would be required and included as part of the annual financial report. The audit report would also include a description of how the restricted research funds were spent. The Commissioner may require a separate audit to verify the submitted information.

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research, has determined that for each year of the first five years the chapter is in effect, there will not be any fiscal implications to state or local government as a result of enforcing or administering the rules.

Dr. Stephenson has also determined that for each year of the first five years the chapter is in effect, the public benefit anticipated as a result of administering the section would be increased accuracy in restricted research classification and greater institutional accountability of research awards. An additional benefit would be greater efficiency in administration of the restricted research awards review process. Notably, the current rules call an audit process that has not been implemented because of its high cost and expertise requirements. The revised rules would allow the Review Panel to review and make determinations on restricted research classification of projects submitted by eligible institutions. The current rule requires the Review Panel to only evaluate institution projects greater than $250,000. Increasing the role of the Review Panel would appropriately align the classification process with research experts, rather than institutional internal auditors as currently constructed in rule. Institutions that receive funding under the Research Development Fund would be required to conduct an audit of restricted research expenditures and report their findings to the Coordinating Board in conjunction with their Annual Financial Report. The Commissioner could also require a separate audit if necessary. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Stacey Silverman, Director of Academic Research and Grant Programs, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or Stacey.Silverman@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The new sections are proposed under the Texas Education Code, Chapter 62, Subchapter E, which creates the Research Development Fund and provides the Coordinating Board with the authority to create the standards and accounting methods for determining the amount of restricted research funds expended by each eligible institution per year, convening a committee to approve those methods, and providing the Comptroller of Public Accounts with verified information regarding the apportionment of the funds to each eligible institution.

The new sections affect implementation of Texas Education Code, Subchapter E, §§62.091 - 62.098.

§13.126.Reports of Restricted Research Expenditures.

Not later than October 15, each eligible institution shall provide a verified, preliminary report of its restricted research expenditures to the Commissioner. The Preliminary Report will include restricted research expenditures from the awards approved by the Commissioner under §13.125 of this title (relating to Report on Restricted Research Awards).

(1) Expenditures for indirect costs of any restricted research award shall not be included in the Preliminary Report.

(2) Expenditures for pass-throughs to sub-recipients shall not be included in the report.

(3) Not later than November 1 of each fiscal year for which there is an appropriation for the Research Development Fund, the Commissioner shall provide a preliminary restricted research expenditure report to the Comptroller and recommend funding allocations from the Research Development Fund to eligible institutions.

(4) The funds shall be apportioned among the eligible institutions based on the average amount of restricted research funds by each institution per year for the three preceding state fiscal years.

(5) Not later than December 1, and after completion of the institutions' annual financial reports, and revisions based on corrections from audits, each eligible institution shall provide the Commissioner and the Legislative Budge Board with a final report of restricted research expenditures. The Final Report will include a description of research expenditures, including expenditures of funds received during preceding fiscal years.

§13.127.Audits.

The Commissioner may require an audit of the restricted research records of an eligible institution to verify the submitted information.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 24, 2009.

TRD-200901533

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


SUBCHAPTER L. ENGINEERING SUMMER PROGRAM

19 TAC §§13.200 - 13.202

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to §§13.200 - 13.202 related to the Engineering Recruitment Program (ERP), Engineering Summer Program (ESP), established by the 80th Texas Legislature through passage of House Bill 2798, and codified as Texas Education Code §61.791. These rules describe the ESP grant program, including the establishment of eligibility for the Texas general academic institutions and identification of student populations that are encouraged to participate. The new language for §§13.200 - 13.202 aligns the rules with the statute to clarify that all eligible institutions may receive funding, and amends existing rules to comply with statute by using the term "Engineering Summer Program" instead of "Engineering Summer Camp."

Dr. MacGregor M. Stephenson, Assistant Commissioner for Academic Affairs and Research has determined that for each year of the first five years the rules are in effect, there are no fiscal implications to state or local government as a result of the proposed rule change.

Dr. Stephenson has determined that for each year of the first five years the rules are in effect, the proposed rule changes do not alter the public benefit or the local employment impact.

Comments on the proposal may be submitted to Reinold Cornelius, Program Director, Texas Higher Education Coordinating Board, P.O. Box 12788, Austin, Texas 78711 or Reinold.Cornelius@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, §61.791(b), which requires the THECB to establish rules for the ESP program.

The amendments affect implementation of Texas Education Code, §61.791 and §61.793.

§13.200.Authority, Scope, and Purpose.

(a) Authority. Authority for this subchapter is provided in the Texas Education Code, Subchapter Q, Engineering Recruitment Programs. This subchapter establishes rules for administering the engineering [recruitment] summer program [ camps] as prescribed in the Texas Education Code, §61.791 and §61.793 [§§61.791 - 61.793].

(b) Scope. Unless otherwise noted, this subchapter applies to [any] general academic teaching institutions [institution ] (Texas Education Code, §61.003) that offer [offers] an engineering degree program [ and their students].

(c) Purpose. The purpose of the program [these programs] is to provide grants to each [any] general academic teaching institution that offers an engineering degree program to implement a one-week summer program [camps] for middle and high school students [at any general academic teaching institution]. Participating students receive instruction in math, science, and engineering concepts, similar to that offered in an engineering degree program.

§13.201.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) - (2) (No change.)

(3) Eligible institution--Any public general academic teaching institution [(public)] that offers one or more [several undergraduate] degree programs in engineering.

[(4) Engineering degree program--Any undergraduate degree program in engineering at an eligible institution.]

(4) [(5)] Summer program [camp ]--A math, science, and engineering laboratory-oriented engineering immersion program [day camp], organized and offered by an eligible institution [ with one or more one-week sessions, to take place] on its [the] campus [ of the eligible institution].

[(6) Proposal--A summer camp proposal written by an eligible institution.]

§13.202.Summer Program [ Camps ].

(a) A summer program [Summer camps] shall be designed for middle and/or high school students to [ that will] introduce participants [participating students] to math, science, and engineering concepts similar to that offered [they may encounter] in an engineering degree program.

(b) Once every fiscal year, depending on available funding, the Commissioner may authorize distribution of a request for application [proposals] for the [design and implementation of] summer program [camps].

(c) The Board shall post the request for application [ proposals] on the agency website at least 30 working days prior to the due date for submission [proposals] and shall notify all eligible institutions.

(d) The request for application [proposals] shall:

(1) require a one-week summer program with a minimum of 36 contact hours per week;

(2) [(1)] contain information necessary to prepare an application including notification of available [proposals] including financial resources to be distributed; [available for distribution as well as the criteria that will be used for award of grants,]

[(2) contain data describing the demographics of the state,]

(3) require applying [the proposal to address plans by the eligible] institution to include students who are underrepresented in engineering programs, such as Black, Hispanic, and/or female students; [ensure that its summer camp reflects the demographics of the state,]

(4) require participants to have [include the requirements for admission to a summer camp, including the requirement of] an appropriate math and science background according to the skill level of the summer program offered; [participating student's grade level and the availability of camp scholarships if needed,] and

(5) specify [any] other grant conditions.

(e) Each eligible institution may submit one application [ proposal to the Board] and the Commissioner shall contract [award] grants for the summer programs [camps ] based on submitted applications [proposals] and availability of funding.

(f) All [eligible] institutions receiving a grant [grants] for a summer program [camps ] shall submit a final report to the Board within 30 days of the end of the award period. The Commissioner shall specify the format for the report. [90 days of the end of the summer camp. The Commissioner shall specify the format for the report.]

(g) All institutions receiving a grant for a summer program shall submit a final financial report to the Board within 90 days of the end of the award period. The Commissioner shall specify the format for the report.

(h) [(g)] After making a finding that an eligible institution has failed to perform or failed to conform to grant conditions, the Commissioner may retract or reduce the grant for the summer program [camp].

(i) [(h)] The governing board of each eligible institution shall cooperate with the board in administering this program.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901513

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


CHAPTER 21. STUDENT SERVICES

SUBCHAPTER A. GENERAL PROVISIONS

19 TAC §21.9

The Texas Higher Education Coordinating Board proposes new §21.9 concerning General Provisions. Specifically, the new section would establish procedures by which tuition set-aside funds may be collected for the Texas B-On-Time Loan Program, as required by §56.465 of the Texas Education Code.

Ms. Lois Hollis, Senior Assistant to the Deputy Commissioner for Business and Finance/Chief Operating Officer, has determined that for each year of the first five years the new section is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Ms. Hollis has also determined that for each year of the first five years the new section is in effect, the public benefit anticipated as a result of this change will be that the funds that must be made available to the Texas B-On-Time Loan Program will be collected in a timely manner. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Dan Weaver, P.O. Box 12788, Austin, Texas 78711, (512) 427-6165, Dan.Weaver@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The new section is proposed under the Texas Education Code, §56.453, which provides the Coordinating Board with the authority to adopt rules for the administration of Texas Education Code, §§56.451 - 56.465.

The new section affects the Texas Education Code, §§56.451 - 56.465.

§21.9.Collection of Tuition Set Aside for Texas B-On-Time Loan Program.

(a) By August 31 of each year the Coordinating Board shall disseminate to institutions of higher education guidelines for calculating the tuition to be set aside during the upcoming academic year for the Texas B-On-Time Loan Program as established in Texas Education Code, §56.465.

(b) By September 30 of each year the Coordinating Board shall:

(1) review data reported to it by institutions of higher education for the prior fiscal year regarding collected resident undergraduate designated tuition charged in excess of $46 per semester credit hour;

(2) compare the amount collected by institutions with the amount deposited in the fund established by Texas Education Code §56.463; and

(3) require institutions to reconcile, by December 31st of the same calendar year, any amounts deposited in the fund that are greater than or less than 5 percent of the amount reported in paragraph (1) of this subsection.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901506

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


SUBCHAPTER E. TEXAS B-ON-TIME LOAN PROGRAM

19 TAC §§21.121, 21.126, 21.131

The Texas Higher Education Coordinating Board proposes amendments to §§21.121, 21.126 and 21.131 concerning the Texas B-On-Time Loan Program. Specifically, the proposed amendment to §21.121 would correct the citation of the authority for the program. Section 21.126(a) references loans disbursed from the proceeds of tax-exempt bonds. This reference specifically applies to the institution certification requirement in §21.126(a)(1). The requirements in §21.126(a)(2) - (5) are relevant to all BOT loans, regardless of the funding source. The proposed amendment would move the tax-exempt bond reference from §21.126(a) to §21.126(a)(1) for clarification. Section 21.126(2) states that a student must submit an application containing the names of two personal references who are gainfully employed. The purpose of providing references on loan applications is to assist Board staff in locating borrowers. The employment status of a reference does not have a bearing on the reference's knowledge of the borrower's whereabouts, and thus this requirement is not useful. The proposed amendment would remove this requirement. Section 21.131 states that each payment received from the borrower will be applied first to any outstanding late charges and collection costs that may have accrued to the account and next to principal of the earliest dated note in the account. The implementation of the Higher Education Loan Management System (HELMS) required a change in the application of loan payments. Although payments continue to be applied first to any outstanding late charges and collection costs, they are then proportionately applied to the principal of each note rather than the earliest dated note. The proposed amendment would be consistent with the current method of payment application and in line with the rules describing the application of payments for loans administered through the Hinson-Hazlewood College Student Loan Program.

Ms. Lois Hollis, Senior Assistant to the Deputy Commissioner for Business and Finance/Chief Operating Officer, has determined that for each year of the first five years the amendment is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Ms. Hollis has also determined that for each year of the first five years the amendment is in effect, the public benefit anticipated as a result of this change will be that the rules will provide clarification of the requirements for disbursing B-On-Time funds and more accurately describe the method by which payments are applied. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Dan Weaver, P.O. Box 12788, Austin, Texas 78711, (512) 427-6165, Dan.Weaver@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, §56.453, which provides the Coordinating Board with the authority to adopt rules for the administration of Texas Education Code, §§56.451 - 56.465.

The amendments affect Texas Education Code, §§56.451 - 56.465.

§21.121.Authority and Purpose.

(a) Authority. Unless otherwise noted in a section, the authority for these provisions is provided by the Texas Education Code, §§56.451 - 56.465 [56.464].

(b) (No change.)

§21.126.Disbursement to Students.

(a) No [In the case of loans made from the proceeds of tax-exempt bonds, no] disbursement shall be made to any student until:

(1) for loans made from the proceeds of tax-exempt bonds, the institution has certified that the amount of the loan does not exceed the difference between the cost of attendance and other forms of student assistance for which the student is eligible, with the exception of Federal Plus loans, whether or not the student actually receives such assistance;

(2) the student has submitted an application containing the names of two personal references who live at different addresses[ , who are gainfully employed,] and who are expected to know the student's whereabouts at all times throughout the life of the loan;

(3) - (5) (No change.)

(b) - (d) (No change.)

§21.131.Repayment of Loans.

(a) - (f) (No change.)

(g) In accordance with the terms of the promissory note, the Commissioner shall determine the priority order in which the payments shall be applied to late charges, collection costs, principal, and any other charges. [Each payment that is received from the borrower to be credited to his or her account will be applied in the following manner:]

[(1) first, to any outstanding late charges and collection costs that may have accrued to the account; and]

[(2) next, to principal of the earliest dated note in the account.]

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901504

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


SUBCHAPTER NN. EXEMPTION PROGRAM FOR VETERANS AND THEIR DEPENDENTS (THE HAZLEWOOD ACT)

19 TAC §21.2100, §21.2103

The Texas Higher Education Coordinating Board proposes amendments to §21.2100 and §21.2103 concerning the Exemption Program for Veterans and Their Dependents (The Hazlewood Act). Specifically, the proposed amendment to §21.2100 would delete the definition of "Citizen of Texas." This term does not appear elsewhere in the sections regarding this program and is not needed. The rest of the definitions are renumbered accordingly. The proposed amendments to §21.2103 would clarify the limit to the value of federal benefits a child may receive in order to be eligible for a Hazlewood Act Exemption.

Ms. Lois Hollis, Senior Assistant to the Deputy Commissioner for Business and Finance/Chief Operating Officer, has determined that for each year of the first five years the section is in effect, there will no fiscal implications to state or local government as a result of enforcing or administering the rules.

Ms. Hollis has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administering the section will be an easier understanding of program requirements. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Lois Hollis, P.O. Box 12788, Austin, Texas 78711, (512) 427-6465, Lois.Hollis@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, §54.203, which provides the Coordinating Board with the authority to adopt rules to provide for the efficient and uniform application of this section.

The amendments affect Texas Education Code, §54.203.

§21.2100.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) - (4) (No change.)

[(5) Citizen of Texas--A person who is a resident of Texas.]

(5) [(6)] Contact hours--A unit of measure that represents an hour of scheduled instruction given to students of which 50 minutes must be of direct instruction. Also referred to as clock hours.

(6) [(7)] Dependent--An individual who was claimed as a dependent for federal income tax purposes by the individual's parent or court-appointed legal guardian in a particular year and in the previous tax year. A veteran was a dependent if he or she was claimed as such by a parent or legal guardian during the veteran's year of entry into the service and in the previous tax year.

(7) [(8)] Extraordinary costs--(for community/junior colleges only) tuition and fee costs that exceed the average tuition and fee charges at the institution.

(8) [(9)] Hazlewood Act Exemption--The tuition and partial fee exemption authorized under Texas Education Code, §54.203.

(9) [(10)] Honorably discharged--Released from active duty military service with an Honorable Discharge, General Discharge under Honorable Conditions, or Honorable Separation or Release from Active Duty, as documented by the Certificate of Release or Discharge from Active Duty (DD214) issued by the Department of Defense.

(10) [(11)] Identification number--An individual's social security number or school-assigned identification number.

(11) [(12)] Institution--A Texas public institution of higher education as defined in Texas Education Code, §61.003(8).

(12) [(13)] Deposit fees--Fees that an institution may collect under Texas Education Code, §54.502.

(13) [(14)] Resident of Texas--A resident of the State of Texas as determined in accordance with Chapter 21, Subchapter B, of this title (relating to Determination of Resident Status and Waiver Programs for Certain Nonresident Persons).

(14) [(15)] Student service fees--Fees that an institution may, under Texas Education Code, §§54.503, 54.5061 and 54.513, elect to charge to students to cover the cost of student services.

(15) [(16)] Training--Time spent as a member of the armed forces that is not included in the "Net Active Service" or the sum of "Net Active Service" indicated on the Certificate of Release or Discharge from Active Duty (DD214).

(16) [(17)] Tuition--All types of tuition that an institution may, under Texas Education Code, Chapter 54, collect from students attending the institution, including statutory tuition, discretionary tuition, designated tuition, and board-authorized tuition.

§21.2103.Eligible Children.

In order to be eligible to receive a Hazlewood Act Exemption, children shall demonstrate that they:

(1) (No change.)

(2) have no federal veteran's education benefits, based on the death or disability of a veteran parent or, if eligible for federal benefits, [and] that the value of the benefits is less than the value of the children's tuition and fees less deposit and student service fees for the term in which the exemption is to be used; and

(3) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901507

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114


CHAPTER 22. GRANT AND SCHOLARSHIP PROGRAMS

SUBCHAPTER K. PROVISIONS FOR SCHOLARSHIPS FOR STUDENTS GRADUATING IN THE TOP 10 PERCENT OF THEIR HIGH SCHOOL CLASS

19 TAC §22.200

The Texas Higher Education Coordinating Board proposes amendments to §22.200, concerning Provisions for Scholarships for Students Graduating in the Top 10 Percent of Their High School Class. Specifically, §22.200 is renamed to more accurately reflect the purpose of the section. The amendments to §22.200(c) would give staff more flexibility in requesting names and addresses of potential scholarship recipients.

Ms. Lois Hollis, Senior Assistant to the Deputy Commissioner for Business and Finance/Chief Operating Officer, has determined that for each year of the first five years the section is in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the rules.

Ms. Hollis has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the sections will be a greater clarification of program requirements. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Lois Hollis, P.O. Box 12788, Austin, Texas 78711, (512) 427-6465, Lois.Hollis@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendments are proposed under the Texas Education Code, §61.027, which provides the Coordinating Board with general rule-making authority, and Article III of the General Appropriations Act of the 80th Texas Legislature.

The amendments affect §61.027 and Article III of the General Appropriations Act of the 80th Texas Legislature.

§22.200.Award Amounts and Notification of Potential Recipients [Recipient Selection].

(a) - (b) (No change.)

(c) Notification of Potential Recipients [ Recipient Selection]. Each high school will submit names and addresses of [applications from] students who may be eligible for the scholarship according to criteria developed by Coordinating Board staff. [are determined to be ranked in the top 15 percent of their high school graduating class based on the students ranking at the end of his or her sixth semester. Award eligibility will be based on each student's ranking at the end of his or her seventh semester unless an institution of higher education uses a different semester's ranking in determining eligibility for admissions.]

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2009.

TRD-200901508

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: July 30, 2009

For further information, please call: (512) 427-6114