Relating to the amount and allocation of the annual constitutional appropriation to certain agencies and institutions of higher education and to the permissible uses of that money.

Contracts

• Change of Control Clauses: Vendors with long-term contracts at University of Houston–Victoria must review assignment clauses immediately. Section 6 contemplates a transfer of the institution to the Texas A&M System (contingent on SB 2361); ensure your contract survives this governance change without renegotiation.
• Payment Terms: Standardize contracts to align with the Comptroller’s "Delivery First" requirement. Prohibit pre-payment clauses for HEF-funded projects unless providing library materials or bond services.

Hiring/Training

• Sales Strategy: Direct business development teams to target institutions receiving the largest net increases (University of Houston, Texas Tech, Texas State) for capital project RFPs expected in Q3/Q4 2025.
• Invoicing Protocols: Train Accounts Receivable staff to segregate HEF-eligible capital expenses from general operating expenses to prevent payment delays from the Comptroller.

Reporting & Record-Keeping

• Proof of Delivery (POD): The law mandates that claims for HEF funds be presented only *after* delivery of goods or services. Implement strict POD documentation workflows; digital signatures or certified receipts must accompany all HEF invoices.
• Bond Covenants: Financial institutions holding university debt must update "Pledged Revenue" definitions in loan agreements to capture the increased, constitutionally guaranteed revenue stream.

Fees & Costs

• No New Fees: This bill does not impose new regulatory fees on businesses.
• Capital Liquidity: Expect increased liquidity in the higher education market, reducing credit risk for vendors serving these specific institutions.