85R5468 CJC-D     By: Davis of Harris H.B. No. 3704       A BILL TO BE ENTITLED   AN ACT   relating to the allocation of certain fees on the sale of cigarettes   and cigarette tobacco products manufactured by certain companies to   the permanent health fund for higher education and to the use of   money in that fund.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 63.001(b), Education Code, is amended to   read as follows:          (b)  The fund is composed of:                (1)  money transferred to the fund at the direction of   the legislature;                (2)  money deposited to the credit of the fund under   Section 161.611, Health and Safety Code;                (3)  gifts and grants contributed to the fund; and                (4) [(3)]  the returns received from investment of   money in the fund.          SECTION 2.  Sections 63.002(c) and (d), Education Code, are   amended to read as follows:          (c)  The amount available for distribution from the fund may   be appropriated only for programs that benefit medical research,   health education, or treatment programs at the following   health-related institutions of higher education, schools, and   colleges:                (1)  The University of Texas Health Science Center at   San Antonio;                (2)  The University of Texas M. D. Anderson Cancer   Center;                (3)  The University of Texas Southwestern Medical   Center;                (4)  The University of Texas Medical Branch at   Galveston;                (5)  The University of Texas Health Science Center at   Houston;                (6)  The University of Texas Health Science Center at   Tyler;                (7)  The University of Texas Health Science   Center--South Texas and its component institutions, if established   under Subchapter N, Chapter 74;                (8)  The Texas A&M University Health Science Center;                (9)  the University of North Texas Health Science   Center at Fort Worth;                (10)  the Texas Tech University Health Sciences Center;                (11)  the Texas Tech University Health Sciences Center   at El Paso; [and]                (12)  the Dell Medical School at The University of   Texas at Austin;                (13)  the School of Medicine at The University of Texas   Rio Grande Valley;                (14)  The University of Texas at Austin College of   Pharmacy;                (15)  the Texas Southern University College of Pharmacy   and Health Sciences;                (16)  the University of Houston College of Pharmacy;   and                (17)  Baylor College of Medicine, if a contract between   Baylor College of Medicine and the Texas Higher Education   Coordinating Board is in effect under Section 61.092.          (d)  The governing board of a health-related institution of   higher education, school, or college entitled to receive money   under this subchapter may solicit and accept gifts and grants to the   fund. A gift or grant to the fund shall be appropriated and   distributed and may be used in the same manner as an amount   appropriated under Section 63.003, subject to any limitation or   requirement placed on the gift or grant by the donor or granting   entity.          SECTION 3.  Sections 63.003(a), (b), and (c), Education   Code, are amended to read as follows:          (a)  The legislature shall appropriate the amount available   for distribution from the fund to the health-related institutions   of higher education, schools, and colleges listed in Section   63.002(c). The amount appropriated shall be distributed as   follows:                (1)  70 percent shall be distributed in equal amounts   to each institution, school, and college; and                (2)  the remaining amount shall be distributed in equal   amounts for each of the following categories, with each   institution, school, or college receiving a share in each category   proportionate to the amount that the institution, school, or   college spent in that category in the preceding fiscal biennium as   determined by the institution's, school's, or college's annual   financial report, compared to the total spending of every   institution, school, and college listed in Section 63.002(c) in   that category in the preceding biennium:                      (A)  instructional expenditures;                      (B)  research expenditures; and                      (C)  unsponsored charity care.          (b)  The amount appropriated under Subsection (a) shall be   distributed quarterly by the comptroller to each health-related   institution of higher education, school, and college listed in   Section 63.002(c).          (c)  The Legislative Budget Board shall make any necessary   determination of each institution's, school's, or college's portion   of an amount appropriated under Subsection (a)(2) and shall provide   that information to the legislature and the comptroller.          SECTION 4.  Section 161.601, Health and Safety Code, is   amended to read as follows:          Sec. 161.601.  PURPOSE.  The purpose of this subchapter is   to:                (1)  recover health care costs to the state imposed by   non-settling manufacturers;                (2)  prevent non-settling manufacturers from   undermining this state's policy of reducing underage smoking by   offering cigarettes and cigarette tobacco products at prices that   are substantially below the prices of cigarettes and cigarette   tobacco products of other manufacturers;                (3)  protect the tobacco settlement agreement and   funding, which has been reduced because of the growth of sales of   non-settling manufacturer cigarettes and cigarette tobacco   products, for programs that are funded wholly or partly by payments   to this state under the tobacco settlement agreement and recoup for   this state settlement payment revenue lost because of sales of   non-settling manufacturer cigarettes and cigarette tobacco   products;                (4)  ensure evenhanded treatment of manufacturers and   further protect the tobacco settlement agreement and funding by   imposing a partial payment obligation on non-settling   manufacturers that already make payments on Texas sales under the   master settlement agreement until a credit amendment to that   agreement that will provide those manufacturers with a credit for   payments to Texas is effective; and                (5)  provide funding for programs that benefit medical   research, health education, and treatment programs [any purpose the   legislature determines].          SECTION 5.  Section 161.611, Health and Safety Code, is   amended to read as follows:          Sec. 161.611.  REVENUE DEPOSITED IN PERMANENT HEALTH FUND   FOR HIGHER EDUCATION [GENERAL REVENUE FUND].  The revenue from the   fees imposed by this subchapter shall be deposited in the state   treasury to the credit of the permanent health fund for higher   education [general revenue fund].          SECTION 6.  This Act takes effect September 1, 2017.