AUSTIN, Texas — The Texas Senate has passed legislation for the creation of the Texas University Fund, or TUF, which could expand research at four flagship university campuses in the state.

The fund is being compared to the Permanent University Fund, or PUF, which underwrites some of the budget, endowments and bonds at the University of Texas and Texas A&M University systems. The TUF, however, will be smaller, targeted to research and only apply to four campuses.

The TUF will be created by rolling over an existing fund Texas lawmakers approved in 2009 to boost the status of emerging research universities. This fund was known as the National Research University Funds, or NRUF, and was tied to pushing Texas university campuses to Tier I research status, defined as a university with high-quality graduate programs and $100 million in research.

What You Need To Know

  • The Texas Senate is ready to create a $3.2B endowment for research at flagship campuses for four university systems

  • The Texas University Fund, or TUF, would expand research at UH, UNT, Texas State and Texas Tech

  • The fund is expected to disburse about $240 each biennium, to be distributed based on merit and research production

  • The TUF is far smaller than the PUF, which provides significant support to the UT and Texas A&M university systems

“Institutions that currently qualify for TUF would include Texas Tech University, the University of Houston, the University of North Texas and Texas State University,” sponsor Sen. Joan Huffman, R-Houston, told her colleagues on the Senate floor this week. “Current PUF-eligible institutions that participate in NRUF would become ineligible for this new endowment but are made whole by being moved to the National Research Support Fund, formerly named the Core Research Support Fund."

That means supplemental state funding will come through three funds — PUF, TUF and NRSC — which all have different funding mechanisms and purposes. The PUF, which sits on about $30 billion in assets, provided about $2 billion to the University Texas System and $1 billion to the Texas A&M University System for a variety of expenditures and endowments in the last biennium.

The TUF is much smaller and initially funded with general revenue. The Senate, in its current budget, has agreed to take the $896 million in the current NRUF and add $2.5 billion in new revenue to create an endowment that would have an initial corpus of $3.4 billion. Investment profits on the fund would allow the TUF to distribute approximately $240 million each biennium.

Most university systems will not comment on pending legislation. Each university, however, has established research priorities: UH has a focus on affordable health care and drug discovery and development. Both Texas Tech and Texas State have research parks with accelerator programs. And the University of North Texas is a research hub for plant science, renewable energy and computational research.

All of this would have to be approved by Texas voters on a ballot in November, if the funding plan and joint resolution pass both chambers and are signed by the governor.

The TUF legislation has set thresholds which mean only the flagship campuses — Texas Tech University, University of Houston, University of North Texas and Texas State University — will qualify for the TUF funding, and it can only be applied to expand research efforts. All four of the universities met the threshold for the former NRUF, which distributed more modest amounts, typically between $10 and $20 million each biennium.

Then there are those universities that are in either the University of Texas or Texas A&M University systems that had worked their way up to Tier 1 research status. For instance, UT-Dallas and UT-Arlington both qualify for NRUF. These universities will receive funds out of the National Research Support Fund, which will be underwritten with $117 million in funds this session, Huffman said.

The creation of the TUF was passed on an almost unanimous vote, but its creation is not without controversy. Sen. Charles Perry, R-Lubbock, alluded to a reckoning for the UT and Texas A&M systems one day. West Texas leaders have long held that higher education institutions in West Texas should have reaped more of the benefit of the 2.1 million acres of land that state leaders deemed "too worthless to survey" when the PUF was created.

Huffman stressed that the funding taken from the state's Economic Stabilization Fund to underwrite the TUF would not cut into the ESF fund's principal, or corpus. Sen. Bob Hall, R-Edgewood, was the sole vote against the TUF. His office said he supported the concept of the TUF but was opposed to the funding method being used to create it.