CHAPTER 65. ADMINISTRATION OF THE UNIVERSITY OF TEXAS SYSTEM
EDUCATION CODE
TITLE 3. HIGHER EDUCATION
SUBTITLE C. THE UNIVERSITY OF TEXAS SYSTEM
CHAPTER 65. ADMINISTRATION OF THE UNIVERSITY OF TEXAS SYSTEM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 65.01. DEFINITIONS. In this chapter:
(1) "System" or "university system" means The University of
Texas System.
(2) "Board" means the board of regents of The University of
Texas System.
Acts 1971, 62nd Leg., p. 3144, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.02. ORGANIZATION. (a) The University of Texas System
is composed of the following institutions and entities:
(1) The University of Texas at Arlington, including:
(A) The University of Texas Institute of Urban Studies at
Arlington; and
(B) The University of Texas School of Nursing at Arlington;
(2) The University of Texas at Austin, including:
(A) The University of Texas Marine Science Institute;
(B) The University of Texas McDonald Observatory at Mount Locke;
and
(C) The University of Texas School of Nursing at Austin;
(3) The University of Texas at Dallas;
(4) The University of Texas at El Paso, including The University
of Texas School of Nursing at El Paso;
(5) The University of Texas of the Permian Basin;
(6) The University of Texas at San Antonio, including the
University of Texas Institute of Texan Cultures at San Antonio;
(7) The University of Texas Southwestern Medical Center at
Dallas, including:
(A) The University of Texas Southwestern Medical School at
Dallas;
(B) The University of Texas Southwestern Graduate School of
Biomedical Sciences at Dallas; and
(C) The University of Texas Southwestern Allied Health Sciences
School at Dallas;
(8) The University of Texas Medical Branch at Galveston,
including:
(A) The University of Texas Medical School at Galveston;
(B) The University of Texas Graduate School of Biomedical
Sciences at Galveston;
(C) The University of Texas School of Allied Health Sciences at
Galveston;
(D) The University of Texas Marine Biomedical Institute at
Galveston;
(E) The University of Texas Hospitals at Galveston; and
(F) The University of Texas School of Nursing at Galveston;
(9) The University of Texas Health Science Center at Houston,
including:
(A) The University of Texas Medical School at Houston;
(B) The University of Texas Dental Branch at Houston;
(C) The University of Texas Graduate School of Biomedical
Sciences at Houston;
(D) The University of Texas School of Health Information
Sciences at Houston;
(E) The University of Texas School of Public Health at Houston;
(F) The University of Texas Speech and Hearing Institute at
Houston; and
(G) The University of Texas School of Nursing at Houston;
(10) The University of Texas Health Science Center at San
Antonio, including:
(A) The University of Texas Medical School at San Antonio;
(B) The University of Texas Dental School at San Antonio;
(C) The University of Texas Graduate School of Biomedical
Sciences at San Antonio;
(D) The University of Texas School of Allied Health Sciences at
San Antonio; and
(E) The University of Texas School of Nursing at San Antonio;
(11) The University of Texas M. D. Anderson Cancer Center,
including:
(A) The University of Texas M. D. Anderson Hospital;
(B) The University of Texas M. D. Anderson Tumor Institute; and
(C) The University of Texas M. D. Anderson Science Park; and
(12) The University of Texas Health Science Center--South Texas,
including The University of Texas Medical School--South Texas, if
established under Subchapter N, Chapter 74.
(b) The University of Texas System shall also be composed of
such other institutions and entities as from time to time may be
assigned by specific legislative act to the governance, control,
jurisdiction, or management of The University of Texas System.
Added by Acts 1973, 63rd Leg., p. 1186, ch. 435, Sec. 1, eff.
Aug. 27, 1973. Amended by Acts 1989, 71st Leg., ch. 644, Sec. 2,
eff. June 14, 1989; Acts 2001, 77th Leg., ch. 325, Sec. 1, eff.
Sept. 1, 2001.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1341, Sec. 5, eff. June 19, 2009.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
Sec. 65.11. BOARD OF REGENTS. The government of the university
system is vested in a board of nine regents appointed by the
governor with the advice and consent of the senate. The board may
provide for the administration, organization, and names of the
institutions and entities in The University of Texas System in
such a way as will achieve the maximum operating efficiency of
such institutions and entities, provided, however, that no
institution or entity of The University of Texas System not
authorized by specific legislative act to offer a four-year
undergraduate program as of the effective date of this Act shall
offer any such four-year undergraduate program without prior
recommendation and approval by a two-thirds vote of the Texas
Higher Education Coordinating Board and a specific act of the
Legislature.
Acts 1971, 62nd Leg., p. 3144, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1973, 63rd Leg., p. 1188, ch. 435,
Sec. 2, eff. Aug. 27, 1973; Acts 1989, 71st Leg., ch. 644, Sec.
3, eff. June 14, 1989.
Sec. 65.12. QUALIFICATIONS; TERMS. Each member of the board
shall be a qualified voter; and the members shall be selected
from different portions of the state. The members hold office for
staggered terms of six years, with the terms of three expiring
February 1 of odd-numbered years.
Acts 1971, 62nd Leg., p. 3144, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1983, 68th Leg., p. 2837, ch. 484,
art. III, Sec. 1, eff. June 19, 1983.
Sec. 65.13. BOARD OFFICERS. The board shall elect a chairman
from its members to serve at the will of the board. The
comptroller shall be the treasurer of the university system.
Acts 1971, 62nd Leg., p. 3144, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1997, 75th Leg., ch. 1423, Sec.
5.16, eff. Sept. 1, 1997.
Sec. 65.14. EXPENSES. The reasonable expenses incurred by
members of the board in the discharge of their duties shall be
paid from the available university fund.
Acts 1971, 62nd Leg., p. 3144, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.15. SEAL. The board may make and use a common seal and
may alter it at will.
Acts 1971, 62nd Leg., p. 3145, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.16. SYSTEM CENTRAL ADMINISTRATION OFFICE; EXECUTIVE
OFFICER. (a) The board shall establish a central administration
of the university system to provide oversight and coordination of
the activities of the system and each component institution
within the system.
(b) The board shall appoint a chief executive officer and such
other executive officers of the system central administration as
the board considers appropriate. The board shall determine each
officer's term of appointment, salary, and duties.
(c) Subject to the power and authority of the board, the chief
executive officer is responsible for the general management of
the university system within the policies of the board and for
making recommendations to the board concerning the organization
of the university system and the appointment of the chief
administrative officer for each component institution within the
system.
(d) In addition to other powers and duties provided by this code
or other law, the central administration of the system shall
recommend policies and rules to the governing board of the system
to ensure conformity with all laws and rules and to provide
uniformity in data collection and financial reporting procedures.
Added by Acts 1989, 71st Leg., ch. 464, Sec. 1, eff. June 14,
1989.
SUBCHAPTER C. POWERS AND DUTIES OF BOARD
Sec. 65.31. GENERAL POWERS AND DUTIES. (a) The board is
authorized and directed to govern, operate, support, and maintain
each of the component institutions that are now or may hereafter
be included in a part of The University of Texas System.
(b) The board is authorized to prescribe for each of the
component institutions courses and programs leading to such
degrees as are customarily offered in outstanding American
universities, and to award all such degrees. It is the intent of
the legislature that such degrees shall include baccalaureate,
master's, and doctoral degrees, and their equivalents, but no new
department, school, or degree-program shall be instituted without
the prior approval of the Coordinating Board, Texas College and
University System.
(c) The board has authority to promulgate and enforce such other
rules and regulations for the operation, control, and management
of the university system and the component institutions thereof
as the board may deem either necessary or desirable. The board is
specifically authorized and empowered to determine and prescribe
the number of students that shall be admitted to any course,
department, school, college, degree-program, or institution under
its governance.
(d) The board is specifically authorized to make joint
appointments in the component institutions under its governance.
The salary of any person who receives such joint appointment
shall be apportioned to the appointing institutions on the basis
of services rendered.
(e) The board is specifically authorized, upon terms and
conditions acceptable to it, to accept, retain in depositories of
its choosing, and administer gifts, grants, or donations of any
kind, from any source, for use by the system or any of the
component institutions of the system.
(f) No component institution which is not authorized to offer a
four-year undergraduate program shall offer a four-year
undergraduate program without the specific authorization of the
legislature.
(g) The board by rule may delegate a power or duty of the board
to a committee, officer, employee, or other agent of the board.
Acts 1971, 62nd Leg., p. 3145, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1971, 62nd Leg., p. 3360, ch.
1024, art. 2, Sec. 37, eff. Sept. 1, 1971; Acts 1983, 68th Leg.,
p. 5010, ch. 900, Sec. 1, eff. Aug. 29, 1983; Acts 1995, 74th
Leg., ch. 213, Sec. 1, eff. May 23, 1995.
Sec. 65.32. REMOVAL OF OFFICERS, ETC. The board may remove any
officer, member of the faculty, or employee connected with the
system when in its judgment the interest of the system requires
the removal.
Acts 1971, 62nd Leg., p. 3145, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.33. EMINENT DOMAIN. (a) The board has the power of
eminent domain to acquire for the use of the university system
any land that may be necessary and proper for carrying out its
purposes in the manner prescribed by Chapter 21, Property Code.
(b) Whenever the board has been made trustees by a will,
instrument in writing, or otherwise of a trust for a scientific,
educational, philanthropic, or charitable purpose, or other trust
for a public purpose, it may act by a quorum of the board or a
majority of all members. Unless otherwise directed by the terms
of the will or instrument, as trustees the board may exercise for
the purpose of the trust the power of eminent domain and may
condemn land and other property as provided by Chapter 21,
Property Code.
(c) The taking of the property is declared to be for the use of
the state. The board is not required to deposit a bond or the
amount equal to the award of damages by the commissioners as
provided by Section 21.021, Property Code.
Acts 1971, 62nd Leg., p. 3145, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1985, 69th Leg., ch. 922, Sec. 1,
eff. Aug. 26, 1985.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
609, Sec. 2, eff. June 15, 2007.
Sec. 65.34. CONTRACTS. A contract must be approved by the board
or otherwise entered into in accordance with rules of the board
relating to contracting authority.
Acts 1971, 62nd Leg., p. 3146, p. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1977, 65th Leg., p. 562, ch. 197,
Sec. 2, eff. May 20, 1977; Acts 1995, 74th Leg., ch. 213, Sec. 2,
eff. May 23, 1995.
Sec. 65.35. EXPENDITURES. All expenditures may be made by the
order of the board and shall be paid on warrants from the
comptroller based on vouchers approved by the chairman of the
board or his delegate, or by the institutional head or his
delegate of the component institution making the expenditures.
Acts 1971, 62nd Leg., p. 3146, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.36. DONATIONS FOR PROFESSORSHIPS AND SCHOLARSHIPS. (a)
Donations of property may be made and accepted by the board for
the purpose of establishing or assisting in the establishment of
a professorship or scholarship in the university system or any of
its component institutions, or for creating in the university
system or any of its component institutions any trust for any
lawful, educational, or charitable purpose, either temporarily or
permanently, and the donations or trusts thereby created will be
governed by the rules prescribed by this section.
(b) The legal title to the property shall be vested in the board
acting as an entity, or the State of Texas, to be held in trust
for the purpose under any directions, limitations, and provisions
that may be declared in writing in the donation or trust
agreement, not inconsistent with the objectives and proper
management of the system or its component institutions.
(c) The donor may declare and direct the manner in which the
title to the property shall thereafter be transmitted from the
trustee in continued succession, to be held for and appropriated
to the declared purposes.
(d) The donor may declare and direct the person or class of
persons who shall receive the benefit of the donation and the
manner of their selection.
(e) The declarations, directions, and limitations shall not be
inconsistent with the objects and proper management of the system
or its institutions.
(f) In case of failure to transmit the title to the property or
to bestow its use in the manner declared and directed in the
donation, or in case the uses, or either of them, become
impracticable from the change of circumstances, the title to the
property, unless otherwise expressly directed by the donor, shall
vest in this state to be held in trust to carry into effect the
purposes of the donation as nearly as practicable by such
agencies as may be provided therefor.
(g) The title to the property donated shall be received, and the
trust conferred in the donation shall be assumed, subject to laws
that may be passed and carried into effect from time to time
which may be necessary to prevent the loss of, or damage to, the
property donated, or an abuse or neglect of the trust so as to
defeat, materially change, or prevent the objects of the
donation.
(h) Copies of the donation shall be filed with the board or the
branch to which the donation applies; and the board shall report
the condition and management of the property and the manner in
which the trust is being administered as part of the matters
reported pertaining to the institution.
Acts 1971, 62nd Leg., p. 3146, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971. Amended by Acts 1973, 63rd Leg., p. 1577, ch. 568,
Sec. 1, eff. Aug. 27, 1973.
Sec. 65.37. FUNDS RECEIVED FOR TRUST SERVICES. The board may
deposit in an appropriate university account all funds received
as administrative fees or charges for services rendered in the
management and administration of any trust estate under the
control of the university system or any institution of the
system. The funds so received as administrative fees or charges
may be expended by the board for any educational purpose of the
university system.
Acts 1971, 62nd Leg., p. 3147, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.38. NONSECTARIAN. No religious qualification shall be
required for admission to any office or privilege in the
university system. No course of instruction of a sectarian
character shall be taught in the system.
Acts 1971, 62nd Leg., p. 3147, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.39. MANAGEMENT OF LANDS OTHER THAN PERMANENT UNIVERSITY
FUND LANDS. The board of regents of The University of Texas
System has the sole and exclusive management and control of the
lands set aside and appropriated to, or acquired by, The
University of Texas System. The board may sell, lease, and
otherwise manage, control, and use the lands in any manner and at
prices and under terms and conditions the board deems best for
the interest of The University of Texas System, not in conflict
with the constitution. However, the land shall not be sold at a
price less per acre than that at which the same class of other
public land may be sold under the statutes. No grazing lease
shall be made for a period of more than 10 years.
Acts 1971, 62nd Leg., p. 3147, ch. 1024, art. 1, Sec. 1, eff.
Sept. 1, 1971.
Sec. 65.40. M.D. ANDERSON SCIENCE PARK. (a) The board is
hereby authorized to establish, maintain, and support an
environmental science park in Bastrop County, Texas, on lands
owned or controlled by it, the administration and business
management of which shall be delegated to The University of Texas
M. D. Anderson Cancer Center.
(b) The board shall have authority to cooperate with agencies,
institutions, instrumentalities, and subdivisions of this state,
other states, and the federal government; and with private
institutes, institutions, foundations, and organizations, in the
furtherance of this section, and the promotion of educational and
environmental science programs.
(c) The board is specifically authorized upon terms and
conditions acceptable to it, to accept and administer, gifts,
grants, or donations, of any kind, from any source, to aid in the
establishment, operation, maintenance, or administration of the
environmental science park.
Added by Acts 1971, 62nd Leg., p. 3336, ch. 1024, art. 2, Sec. 2,
eff. Sept. 1, 1971. Amended by Acts 1989, 71st Leg., ch. 644,
Sec. 4, eff. June 14, 1989.
Sec. 65.41. MEDICAL SCHOOL ADMISSION POLICIES. The Board of
Regents shall promulgate appropriate rules and regulations
pertaining to the admission of students to medical schools which
will provide for admission of those students to its entering
class each year who are equally or as well qualified as all other
students and who have entered a contract with or received a
commitment for a stipend, grant, loan or scholarship from the
State Rural Medical Education Board. The State Rural Medical
Education Board may contract with medical students providing for
such students to engage in a general or family practice of
medicine for not less than four years after licensing and a
period of medical residency, as determined by the rules and
regulations established by the State Rural Medical Education
Board, in cities of Texas which have a population of less than
5,000 or in rural areas, as that term may be defined by the State
Rural Medical Education Board, and said Board is hereby given the
authority to define and from time to time redefine the term rural
area, at the time the medical practice is commenced. This
contract shall provide for a monthly stipend of at least $100 to
be granted by the State Rural Medical Education Board to each
person under contract with the state while enrolled as a medical
school student.
Added by Acts 1975, 64th Leg., p. 2408, ch. 740, Sec. 3, eff.
Sept. 1, 1975.
Sec. 65.42. DELINQUENT ACCOUNTS; VENUE. A suit by The
University of Texas System on its own behalf or on behalf of a
component institution of The University of Texas System to
recover a delinquent loan, account, or debt owed to The
University of Texas System or a component institution of The
University of Texas System may be brought in Travis County.
Added by Acts 1987, 70th Leg., ch. 403, Sec. 3, eff. Sept. 1,
1987.
Sec. 65.43. SALE OF OBSOLETE MEDICAL EQUIPMENT. The board shall
have the authority to sell and transfer, after due notification
by journal or mail, on fair and reasonable terms, to any hospital
within the State of Texas operated by the state, a city, a
county, a hospital district, a nonprofit corporation, or a
tax-exempt charitable organization any medical equipment that has
been in use at an institution or facility governed by the board
and is obsolete with regard to the instructional objectives of
The University of Texas System.
Added by Acts 1981, 67th Leg., p. 2068, ch. 459, Sec. 1, eff.
June 11, 1981.
Sec. 65.45. SCIENCE AND TECHNOLOGY DEVELOPMENT, MANAGEMENT, AND
TRANSFER. (a) The legislature finds that it is essential to the
economic growth of the state that the potential for the
development and growth of high technology industry be promoted
and expanded. As a means of accomplishing this purpose, the board
may enter into agreements with individuals, corporations,
partnerships, associations, and local, state, or federal agencies
for funding the discovery, development, and commercialization of
new products, technology, and scientific information, including
an agreement to manage a national laboratory engaged in any of
those endeavors. At the discretion of the board, research
facilities, funding, and personnel at the various component
institutions of The University of Texas System may be utilized to
achieve the purposes of this section.
(b) As a means of carrying out the purposes of this section, the
board may, through one or more corporations incorporated by the
board or under any other cooperative arrangement:
(1) own and license rights to products, technology, and
scientific information;
(2) own shares in corporations engaged in the discovery,
development, manufacture, management, or marketing of products,
technology, or scientific information in this state or outside
this state;
(3) participate, either directly or through a subsidiary
corporation or other legal entity formed for that purpose, in the
discovery, development, manufacture, management, or marketing of
products, technology, or scientific information on behalf of the
United States or a state or local governmental entity; and
(4) carry on and support such other activities as the board may
deem appropriate for achieving the purposes of this section.
(c) The board may cooperate in any manner the board considers
appropriate with similar programs operated by other
state-supported institutions of higher education in this state or
in other states.
(d) To the extent provided for in an agreement authorized by
this section, a person employed by the entity with whom the
system enters such an agreement, or the person's spouse or child,
may pay the tuition and fees charged to residents of this state
when enrolled in a system institution.
Added by Acts 1985, 69th Leg., ch. 818, Sec. 1, eff. Aug. 26,
1985. Amended by Acts 2003, 78th Leg., ch. 1266, Sec. 4.04, eff.
June 20, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
888, Sec. 10, eff. September 1, 2005.
Sec. 65.46. POWERS RELATED TO ISSUANCE OF BONDS AND NOTES. (a)
In this section:
(1) "Bond" or "note" means a bond or note that the board is
authorized to issue according to law, including Article VII,
Section 18, of the Texas Constitution, Chapter 55 or 66 of this
code, or other applicable law.
(2) "Credit agreement" means a loan agreement, revolving credit
agreement, agreement establishing a line of credit, letter of
credit, reimbursement agreement, insurance contract, commitment
to purchase bonds or notes, purchase or sale agreement, or
another commitment, contract, or agreement authorized and
approved by the board in connection with the authorization,
issuance, security, exchange, payment, purchase, or redemption of
bonds or notes or interest on bonds or notes.
(b) To enhance the security for, or provide for the purchase,
payment, redemption, or remarketing of, bonds or notes and the
interest on bonds or notes, or to reduce the cost of interest
payable on bonds or notes, the board may enter into credit
agreements in relation to bonds or notes, and may secure its
obligations under the credit agreements by pledging, encumbering,
or granting liens on or security interests in revenues, funds, or
other property or security that may be pledged or encumbered or
made subject to a lien or security interest to secure the bonds
or notes that are secured by the credit agreement. The cost to
the board of the credit agreement and the obligations of the
board under the credit agreement may be paid from proceeds of the
sale of bonds or notes to which the credit agreement relates or
from any other source that is available for the purpose of paying
the bonds or notes and the interest on the bonds or notes or that
may otherwise be legally available to make those payments. The
credit agreement shall be submitted, together with the bonds or
notes, to the attorney general for review. If the attorney
general finds that the credit agreement conforms to applicable
law, the attorney general shall approve the credit agreement with
the bonds or notes. On approval and delivery, the credit
agreement is incontestable for any cause.
(c) The board may authorize bonds or notes to bear interest at a
rate or rates (either fixed, variable, floating, adjustable, or
otherwise, all as determined in accordance with the resolution
authorizing the issuance of the bonds or notes, which may provide
a formula, index, or contractual arrangement for the periodic
determination of interest rates without the requirement of
specific approval, by the board, of each determination) not to
exceed the maximum net effective interest rate allowed by law.
The resolution under which the bonds or notes are issued may
delegate to one or more designated officers, employees, or agents
of the board the authority to act on behalf of the board, while
the bonds or notes remain outstanding, in fixing dates, prices,
interest rates, interest payment periods, and other procedures
specified in the resolution so that, among other things, the
interest on the bonds or notes may be adjusted from time to time
by the officer, employee, or agent to permit the bonds or notes
to be sold or resold at par in conjunction with secondary market
transactions.
(d) The board may enter into financing programs under which the
board may issue notes for any lawful purpose for which bonds or
notes may be issued and may make provision for the notes
initially issued under the programs to be refinanced, renewed, or
refunded throughout the period of the programs by the issuance,
sale, and delivery of additional notes. The notes may be secured
in any manner provided by law for securing notes or bonds, and
also may be secured by the proceeds of the sale of notes, the
proceeds of the sale of bonds, or credit agreements, all as the
board provides in the resolution authorizing the financing
program and the issuance of notes under the program. The board
may:
(1) provide in the resolution authorizing the financing program
for the maximum principal amount of notes to be outstanding at
any time under the financing program;
(2) provide for the authorization of one or more officers or
employees of the board to act on behalf of the board in selling
and delivering notes and fixing their dates, prices, interest
rates, terms of payment, and other procedures relating to the
notes as specified in the resolution;
(3) contract for the future sale of notes under which designated
purchasers are committed to purchase notes from time to time on
the terms and conditions stated in the contract, including a
credit agreement executed in connection with the notes;
(4) provide for the payment of consideration that the board
considers proper for the purchase commitments, and provide for
the payment of the consideration out of proceeds from the sale of
notes or from any other source that is available for the purpose
of paying the notes or that may otherwise be legally available to
make the payments; and
(5) exercise any other rights and powers that are granted to
issuers of obligations under Chapter 1371, Government Code, which
also governs the approval by the attorney general of the notes,
related credit agreements, and other contracts or instruments and
the registration of the notes by the comptroller.
(e) This section shall be construed liberally to effect the
legislative intent and purposes of this section, and all powers
granted by this section shall be broadly interpreted to effect
that intent and those purposes and not as a limitation of powers.
Added by Acts 1985, 69th Leg., ch. 919, Sec. 1, eff. June 15,
1985. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.223, eff.
Sept. 1, 2001.
Sec. 65.461. BOND ENHANCEMENT AGREEMENTS. (a) In this section:
(1) "Bond" or "note" means a bond or note that the board is
authorized to issue according to law, including Section 18,
Article VII, Texas Constitution, Chapter 55 or 66 of this code,
or other applicable law.
(2) "Bond enhancement agreement" means an interest rate swap
agreement, a currency swap agreement, a forward payment
conversion agreement, an agreement providing for payments based
on levels of or changes in interest rates or currency exchange
rates, an agreement to exchange cash flows or a series of
payments, or other agreement, including an option, put, or call,
to hedge or modify payment, currency, rate, spread, or other
exposure.
(b) The board may at any time and from time to time enter into
one or more bond enhancement agreements that the board determines
to be necessary or appropriate to place the obligation of the
board, as represented by the bonds or notes issued or to be
issued, in whole or in part, on the interest rate, currency, cash
flow, or other basis desired by the board. A bond enhancement
agreement is an agreement for professional services and shall
contain the terms and conditions and be for the period that the
board authorizes. The fees and expenses of the board in
connection with a bond enhancement agreement, including any
payments due from the board under a bond enhancement agreement,
may be paid from and secured by a lien on and pledge of all or
any part of any of the revenue funds of the board and its
institutions, proceeds of the sale of bonds or notes to which the
bond enhancement agreement relates, or from any other source that
is legally available for the purpose of paying the bonds or notes
and the interest on the bonds or notes or that may otherwise be
legally available to make those payments. Payments due from the
board under a bond enhancement agreement relating to bonds or
notes issued pursuant to Section 18, Article VII, Texas
Constitution, are deemed to be for the support and maintenance of
The University of Texas System administration and may be paid
from the available university fund.
(c) The resolution of the board authorizing a bond enhancement
agreement may authorize one or more designated officers or
employees of the board to act on behalf of the board in entering
into and delivering the bond enhancement agreement and in
determining or setting the counterparty and terms of the bond
enhancement agreement specified in the resolution.
(d) The resolution of the board authorizing a financing program
pursuant to Section 65.46 may include authorization of one or
more bond enhancement agreements.
(e) Unless the board or its designee elects otherwise in its
authorization or approval of a bond enhancement agreement, the
bond enhancement agreement is not a credit agreement for purposes
of Chapter 1371, Government Code, or Section 65.46 of this
chapter, or any successor to such laws, regardless of whether the
bonds or notes relating to the bond enhancement agreement were
issued in part under either such law.
(f) This section shall be construed liberally to effect the
legislative intent and purposes of this section, and all powers
granted by this section shall be broadly interpreted to effect
that intent and those purposes and not as a limitation of powers.
Added by Acts 2007, 80th Leg., R.S., Ch.
1310, Sec. 8, eff. June 15, 2007.