This document reports on the governance of the Texas system of public higher education. The first section of the report describes the Texas public higher education system as it exists today. This section discusses the history of Texas education, its structure of governance, facilities, academic and research programs, health-realted institutions, and independent colleges and universities, and identifies problems with the current system of governance. The second section, which concerns the future, recommends five standards to improve governance in Texas higher education and proposes a governance structure for the 21st century. The proposed structure would group all institutions that have undergraduate teaching as their primary mission into one large system; reduces the number of higher education systems to four in order to faciliate planning, accountability, consolidation of duplicate programs, and efficient use of resources; and links comprehensive research institutions with those institutions expected to change the most, to promote flexibility in allocating resources and programs. Included are charts, graphs, and maps describing the proposed system; biographical sketches of members of the Texas Higher Education Coordinating Board Committee; a list of persons who offered testimony to the committee; a sample of reorganization plans; and the Texas Charter for Public Higher Education adopted by the 70th Texas Legislature, 1987. (LPT)