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Regular Session, 2014
SENATE BILL NO. 337
BY SENATORS APPEL AND THOMPSON
POSTSECONDARY ED. Provides for the development of an outcomes-based funding
formula for postsecondary education. (gov sig)
AN ACT1
To enact R.S. 17:3129.2, relative to public postsecondary education; to provide for the2
development of an outcomes-based funding formula for postsecondary education;3
to provide relative to formula components and a time line for implementation of the4
formula; to provide for submission to the Board of Regents; to provide for reporting5
requirements; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 17:3129.2 is hereby enacted to read as follows:8
ยง3129.2. Postsecondary education; outcomes-based funding formula; creation;9
components; approval; implementation; reports10
A. The legislature finds that:11
(1) There is a direct correlation between postsecondary educational12
attainment, individual earning power and quality of life, and the overall13
economic health and prosperity of the state.14
(2) Alignment of postsecondary program offerings with economic15
development and workforce needs and increased emphasis on the production16
of postsecondary degrees and certifications that provide the holder with greater17 SB NO. 337
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earning potential are necessary and essential to the state's economic well-being1
and the welfare of the people of Louisiana.2
(3) The number of Louisiana residents with postsecondary degrees and3
certificates must significantly increase in order to meet the state's current and4
projected workforce demands.5
(4) Any measurement of the success of Louisiana's postsecondary6
educational system must necessarily include indicators that compare the7
performance of individual institutions to that demonstrated by statistically peer8
institutions across the country.9
(5) The current retention, completion, and graduation rates of most of10
Louisiana's public colleges and universities are below regional and national11
averages, and it is both responsible and in the best interest of the state to12
allocate educational resources in a manner that effectively supports our public13
postsecondary institutions and promotes and prioritizes outcomes at the campus14
level.15
(6) The state's Master Plan for Postsecondary Education and16
postsecondary education funding formula must reflect student and state17
priorities and promote and drive the changes needed to make Louisiana's public18
postsecondary educational system more productive, more efficient, more19
affordable, more accountable, and better aligned with the state's economic20
development and workforce needs.21
B. The commissioner of higher education and the president of each22
public postsecondary education system shall jointly and collaboratively:23
(1) Review the postsecondary education funding formula and develop24
a comprehensive outcomes-based funding formula that ensures the equitable25
allocation of state funds to public postsecondary educational institutions,26
appropriately considers costs, places significant emphasis on student and27
institutional outcomes, and aligns with the state's economic development and28
workforce needs.29 SB NO. 337
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(2) Consult with and solicit meaningful feedback and guidance from1
institutional presidents, chancellors, faculty, chief academic officers, chief2
financial officers, students, and business and civic leaders.3
(3) Make recommendations for any changes needed in the Master Plan4
for Postsecondary Education and the Louisiana Granting Resources and5
Autonomy for Diplomas Act as provided in R.S. 17:3139, et seq., to support and6
facilitate implementation of the outcomes-based funding formula.7
C. In creating the outcomes-based funding formula, the commissioner8
of higher education and the postsecondary system presidents shall focus upon9
developing the optimal methodology by which to allocate postsecondary funding10
in a manner that provides incentives for institutions to achieve desired11
outcomes. The following factors shall be considered and included in the formula12
as deemed appropriate:13
(1) Student success factors, including retention, timely progression14
toward degree completion, cost of completion, certificate and degree15
production, and successful transfer of students from community and technical16
colleges to four-year degree-granting institutions.17
(2) Alignment with economic development and workforce needs,18
including certificate and degree production in science, technology, engineering,19
mathematics, and other high-demand fields and the potential earning power of20
graduates.21
(3) Research and innovation, including research expenditures,22
technology transfer, and commercialization.23
(4) Funding, including credit hour costs and cost of certificate and24
degree completion.25
(5) Any other factor or metric that would promote desired student and26
institutional outcomes.27
D. The outcomes-based funding formula shall:28
(1) Appropriately consider the role, scope, and mission of each29 SB NO. 337
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postsecondary institution.1
(2) Establish a concise set of outcomes to be measured for each2
postsecondary institution and define metrics for each outcome that are reliable,3
accurate, nationally recognized, and benchmark the performance of each4
institution compared to its statistical peers in other states, wherever valid5
comparable data is available.6
(3) Determine the optimal allocation of state appropriated funds to each7
postsecondary institution based upon operational costs, performance outcomes,8
and performance-based, targeted incentives. However, the amount to be9
allocated based upon performance outcomes must be sufficient to incentivize10
increased performance at the campus level.11
(4) Consider the characteristics unique to each individual postsecondary12
institution, including community and technical colleges and professional13
schools, such as student enrollment characteristics and geographic location and14
delivery area.15
(5) Include safeguards to prevent sudden, dramatic changes in the16
funding level of any postsecondary institution.17
(6) Contain a timeline for full formula implementation.18
E. Implementation of the outcomes-based funding formula shall begin19
as soon as practicable, but not later than the beginning of the 2016-2017 fiscal20
year.21
F.(1) Not later than December 31, 2015, the commissioner of higher22
education shall submit a written report containing the proposed outcomes-based23
funding formula and related recommendations for related policy and statutory24
changes to the Board of Regents for its consideration and approval.25
(2) The Board of Regents shall review the report and subsequently26
submit the report, the proposed outcomes-based funding formula, and the27
board's comments and recommendations to the Senate Committee on28
Education, the Senate Committee on Finance, the House Committee on29 SB NO. 337
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Education, and the House Committee on Appropriations, not later than1
January 31, 2016.2
G. The commissioner of higher education and the postsecondary system3
presidents shall collectively re-evaluate the postsecondary education funding4
formula at least once every two years and submit a written report regarding the5
formula's effectiveness and the performance of each postsecondary institution6
to the Senate Committee on Education, the Senate Committee on Finance, the7
House Committee on Education, and the House Committee on Appropriations.8
Section 2. This Act shall become effective upon signature by the governor or, if not9
signed by the governor, upon expiration of the time for bills to become law without signature10
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If11
vetoed by the governor and subsequently approved by the legislature, this Act shall become12
effective on the day following such approval.13
The original instrument was prepared by Jeanne Johnston. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Ann S. Brown.
DIGEST
Appel (SB 337)
Proposed law provides for the creation and implementation of an outcomes-based funding
formula for postsecondary education as follows:
(1)Requires the commissioner of higher education and the presidents of each
postsecondary education system to:
(a)Review the postsecondary education funding formula and develop a
comprehensive outcomes-based funding formula that ensures the equitable
allocation of state funds to public postsecondary educational institutions,
appropriately considers costs, places significant emphasis on student and
institutional outcomes, and aligns with the state's economic development and
workforce needs.
(b)Consult with and solicit meaningful feedback and guidance from institutional
presidents, chancellors, faculty, chief academic officers, chief financial
officers, students, and business and civic leaders.
(c)Make recommendations for any changes needed in the Master Plan for
Postsecondary Education and the Louisiana Granting Resources and
Autonomy for Diplomas Act as provided in R.S. 17:3139, et seq., to support
and facilitate implementation of the outcomes-based funding formula.
(d)Focus upon developing the optimal methodology by which to allocate
postsecondary funding in a manner that provides incentives for institutions SB NO. 337
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words in boldface type and underscored are additions.
to achieve desired outcomes.
(2)Requires that the following factors be considered and included in the formula as
deemed appropriate.
(a)Student success factors, including retention, timely progression toward
degree completion, cost of completion, certificate and degree production, and
successful transfer of students from community and technical colleges to
four-year degree-granting institutions.
(b)Alignment with economic development and workforce needs, including
certificate and degree production in science, technology, engineering,
mathematics, and other high-demand fields and the potential earning power
of graduates.
(c)Research and innovation, including research expenditures, technology
transfer, and commercialization.
(d)Funding, including credit hour costs and cost of certificate and degree
completion.
(e)Any other factor or metric that would promote desired student and
institutional outcomes.
(3)Requires the outcomes-based formula to:
(a)Appropriately consider the role, scope, and mission of each postsecondary
institution.
(b)Establish a concise set of outcomes to be measured for each postsecondary
institution and define metrics for each outcome that are reliable, accurate,
nationally recognized, and benchmark the performance of each institution
compared to its statistical peers from other states, wherever valid comparable
data is available.
(c)Determine the optimal allocation of state appropriated funds to each
postsecondary institution based upon operational costs, performance
outcomes, and performance-based, targeted incentives. However, the amount
to be allocated based upon performance outcomes must be sufficient to
incentivize increased performance at the campus level.
(d)Consider the characteristics unique to each individual postsecondary
institution, including community and technical colleges and professional
schools, such as student enrollment characteristics and geographic location
and delivery area.
(e)Include safeguards to prevent sudden, dramatic changes in the funding level
of any postsecondary institution.
(f)Contain a timeline for full formula implementation.
(4)Requires that formula implementation shall begin as soon as practicable, but not later
than the beginning of the 2016-2017 fiscal year.
(5)Requires the commissioner of higher education, not later than December 31, 2015,
to submit a written report containing the proposed outcomes-based funding formula
and related recommendations for related policy and statutory changes to the Board
of Regents for its consideration and approval. SB NO. 337
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words in boldface type and underscored are additions.
(6)Requires the Board of Regents to review the report and subsequently submit the
report, the proposed outcomes-based funding formula, and the board's comments and
recommendations to the Senate Committee on Education, the Senate Committee on
Finance, the House Committee on Education, and the House Committee on
Appropriations, not later than January 31, 2016.
(7)Requires the commissioner of higher education and the postsecondary system
presidents to collectively re-evaluate the postsecondary education funding formula
at least once every two years and submit a written report regarding the formula's
effectiveness and the performance of each postsecondary institution to the Senate
Committee on Education, the Senate Committee on Finance, the House Committee
on Education, and the House Committee on Appropriations.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 17:3129.2)
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Makes technical changes.