By: Zaffirini, et al. S.B. No. 1443
A BILL TO BE ENTITLED
AN ACT
relating to the academic costs charged to resident undergraduate
students by general academic teaching institutions, to student
financial assistance funded by tuition set-asides, and to certain
reports regarding certain costs of those institutions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 54, Education Code, is
amended by adding Section 54.016 to read as follows:
Sec. 54.016. LIMITATION ON INCREASE IN TOTAL ACADEMIC COSTS
CHARGED TO RESIDENT UNDERGRADUATE STUDENTS. (a) In this section:
(1) "General academic teaching institution" has the
meaning assigned by Section 61.003.
(2) "Core operational costs" means those costs as
estimated by the Legislative Budget Board under Section 51.973.
(3) "Total academic costs":
(A) includes:
(i) tuition for which the rates are
prescribed by this chapter;
(ii) tuition charged by a general academic
teaching institution under Section 54.0513 or another law
authorizing a general academic teaching institution to establish
tuition rates;
(iii) mandatory academic fees; and
(iv) any other academic-related general
fees and course fees, including fees for laboratories, field trips,
access to Internet or multimedia service, equipment replacement,
and instructional technology; and
(B) does not include optional fees charged to a
student for voluntary services or a fee approved by students of the
institution in a referendum held at the institution for that
purpose.
(b) Subject to the additional limitations provided by
Subsections (c) and (d), if for any state fiscal biennium the
legislature appropriates to a general academic teaching
institution from undedicated general revenue an amount that is less
than the amount necessary to fully fund the institution's core
operational costs for that biennium, the total academic costs
charged by the institution to undergraduate students who are
residents of this state for an academic year of that biennium may
not exceed the amount that, when added to the amount of undedicated
general revenue appropriated to the institution for the
corresponding state fiscal year for that purpose, is equal to the
institution's core operational costs for that corresponding state
fiscal year.
(c) This subsection applies only to a general academic
teaching institution whose per student total academic costs for the
academic years covered by the most recent state fiscal biennium are
more than the amount of those per student costs charged by the
general academic teaching institution or institutions that are at
the median for those costs for those years, according to the list of
institutions certified by the Legislative Budget Board under
Section 51.973(a)(2). The limitation provided by this subsection
is in addition to the limitations provided by Subsections (b) and
(d) on the total academic costs that may be charged by a general
academic teaching institution. The total academic costs charged by
a general academic teaching institution in an academic year to an
undergraduate student who is a resident of this state may not exceed
the total academic costs that the institution would have charged to
a similarly situated student in the preceding academic year, as
that amount is adjusted for the current academic year for inflation
as provided by this subsection. Not later than January 15 of each
year, the Legislative Budget Board shall publish and certify to the
governing board of each general academic teaching institution the
inflation rate to be used for purposes of this subsection for the
next academic year. For purposes of this subsection, the inflation
rate is the average of the percentage increase, if any, as expressed
in decimal form rounded to the nearest thousandth, in the consumer
price index, as defined by Section 341.201, Finance Code, for each
of the three most recent preceding calendar years as compared to the
consumer price index for the year preceding each of those years. If
the average percentage increase for those three years is less than
zero, the inflation rate to be used for purposes of this subsection
for the next academic year is zero.
(d) This subsection applies only to a general academic
teaching institution whose per student total academic costs for the
academic years covered by the most recent state fiscal biennium are
more than the amount of those per student costs charged by the
general academic teaching institution or institutions that are at
the median for those costs for those years according to the list of
institutions certified by the Legislative Budget Board under
Section 51.973(a)(2). The limitation provided by this subsection
is in addition to the limitations provided by Subsections (b) and
(c) on the total academic costs that may be charged by a general
academic teaching institution. The total academic costs charged by
a general academic teaching institution in an academic year to an
undergraduate student who is a resident of this state may not exceed
the total academic costs that the institution would have charged to
a similarly situated student in the preceding academic year by more
than five percent.
(e) Notwithstanding Section 54.0513(c), the legislature in
an appropriations Act may provide for an adjustment of general
revenue appropriated to a general academic teaching institution for
a state fiscal year to account for an increase in the amount of
total academic costs charged by the institution in that fiscal year
to an individual student of the institution to whom this section
applies, in excess of an amount specified in the appropriations
Act, if the legislature specifies such an amount in that Act.
(e-1) This subsection applies to total academic costs
charged to students for the 2009-2010 academic year by a general
academic teaching institution other than an institution to which
Subsection (e-3) applies. Subsections (b), (c), and (d) do not
apply to those costs charged by an institution to which this
subsection applies in an academic year to which this subsection
applies. In an academic year to which this subsection applies, the
total academic costs charged by a general academic teaching
institution to an undergraduate student who is a resident of this
state may not exceed the total academic costs that the institution
would have charged to a similarly situated student in the 2008-2009
academic year by more than the greater of:
(1) five percent; or
(2) $315.
(e-2) This subsection applies to total academic costs
charged to students for the 2010-2011 academic year by a general
academic teaching institution to which Subsection (e-3) does not
apply that did not increase the rate of designated tuition charged
to any student under Section 54.0513 in the 2008-2009 academic year
from the rate charged by the institution to a similarly situated
student under that section in the 2007-2008 academic year. This
subsection also applies to total academic costs charged to students
for the 2010-2011 academic year by a general academic teaching
institution that in the 2008-2009 academic year did not yet operate
as an independent general academic teaching institution and at
which the rate of designated tuition charged to any student under
Section 54.0513 in the 2008-2009 academic year did not exceed the
rate charged to a similarly situated student under that section in
the 2007-2008 academic year. Subsections (b), (c), and (d) do not
apply to those costs charged by an institution to which this
subsection applies in an academic year to which this subsection
applies. In an academic year to which this subsection applies, the
total academic costs charged by a general academic teaching
institution to an undergraduate student who is a resident of this
state may not exceed the total academic costs that the institution
would have charged to a similarly situated student in the preceding
academic year by more than the greater of:
(1) five percent; or
(2) $315.
(e-3) This subsection applies to total academic costs
charged to students for the 2009-2010 and 2010-2011 academic years
by a general academic teaching institution that before April 15,
2009, established rates for total academic costs for the 2009-2010
academic year that will result in an amount of total academic costs
charged for that academic year to an undergraduate student who is a
resident of this state that exceeds the total academic costs that
the institution would have charged to a similarly situated student
in the preceding academic year by more than five percent.
Subsections (b), (c), and (d) do not apply to those costs charged by
an institution in an academic year to which this subsection
applies. In an academic year to which this subsection applies, the
total academic costs charged by a general academic teaching
institution to an undergraduate student who is a resident of this
state may not exceed the total academic costs that the institution
would have charged to a similarly situated student in the 2008-2009
academic year by more than $630.
(e-4) This subsection and Subsections (e-1), (e-2), and
(e-3) expire September 1, 2011.
(f) For purposes of this section, students are similarly
situated if they share the same residency status, degree program,
course load, course level, tuition exemption status, and other
circumstances affecting the total academic costs charged to the
student.
(g) This section does not ensure that the total academic
costs charged to an individual student will not increase by more
than the limitation prescribed by Subsection (b) or (c) based on a
change in the student's residency status, degree program, course
load, course level, tuition exemption status, or other circumstance
affecting the total academic costs charged to the student.
SECTION 2. Subchapter A, Chapter 54, Education Code, is
amended by adding Section 54.017 to read as follows:
Sec. 54.017. STABILIZATION OF TOTAL ACADEMIC COSTS; STUDENT
OPTION. (a) In this section:
(1) "Academic fees":
(A) include mandatory academic fees and any other
academic-related general fees and course fees, including fees for
laboratories, field trips, access to Internet or multimedia
service, equipment replacement, and instructional technology; and
(B) do not include optional fees charged to a
student for voluntary services or a fee approved by students of the
institution in a referendum held at the institution for that
purpose.
(2) "Coordinating board" means the Texas Higher
Education Coordinating Board.
(3) "General academic teaching institution" has the
meaning assigned by Section 61.003.
(4) "Tuition" includes:
(A) tuition for which the rates are prescribed by
this chapter; and
(B) tuition charged by a general academic
teaching institution under Section 54.0513 or another law
authorizing a general academic teaching institution to establish
tuition rates.
(b) The governing board of a general academic teaching
institution may offer an eligible student the option to pay tuition
and academic fees as provided by this section.
(c) This section applies only to an undergraduate student
who:
(1) enrolls at a general academic teaching
institution;
(2) after satisfying the requirement of Subdivision
(1), remains continuously enrolled at a general academic teaching
institution until graduation, except as provided under rules
adopted under Subsection (j);
(3) at all times while the student is enrolled at a
general academic teaching institution, is a resident of this state
for purposes of Subchapter B or is otherwise entitled to pay tuition
and fees at the rate provided for residents of this state; and
(4) elects to pay tuition and academic fees under this
section.
(d) Except as provided by Subsection (h) or by rules adopted
under Subsection (j), this section applies only to the amount of
tuition and academic fees charged under this chapter to a student as
follows:
(1) for a student enrolled in a four-year degree
program, on or before the fourth anniversary of the date the student
first enrolls in a general academic teaching institution;
(2) for a student enrolled in a degree program of any
other length, not later than the end of the standard completion
period for that program, as established by the general academic
teaching institution awarding the degree; or
(3) if the student is a transfer student, not later
than the end of the period established by the general academic
teaching institution for the completion of the student's degree
program based on the academic credit the student receives from the
transfer of courses.
(e) Notwithstanding any other provision of this chapter but
subject to the applicability provisions of this section, a general
academic teaching institution may not charge to a student for any
course in which the student enrolls after the student's freshman
year tuition at a rate that exceeds the rate in effect for that
course during the student's freshman year or, for a course that was
not offered during the student's freshman year, a rate that exceeds
the rate in effect for an equivalent course during the student's
freshman year.
(f) Notwithstanding any other provision of this chapter but
subject to the applicability provisions of this section, if a
student transfers to a general academic teaching institution from
another institution of higher education and the student has
remained continuously enrolled in an institution of higher
education beginning with the student's freshman year, the general
academic teaching institution to which the student transfers may
not charge to the student for any course in which the student
enrolls after the student's freshman year tuition at a rate that
exceeds the rate in effect for that course at the receiving
institution during the student's freshman year or, for a course
that was not offered at the receiving institution during the
student's freshman year, a rate that exceeds the rate in effect for
an equivalent course at the receiving institution during the
student's freshman year.
(g) Notwithstanding any other provision of this chapter, in
any semester or other academic term in which the amount of tuition
that a general academic teaching institution may charge a student
is limited by Subsection (e) or (f), the institution may not charge
the student an academic fee in an amount that exceeds the amount of
the fee that the institution would have charged the student in the
student's freshman year, regardless of whether the student was
enrolled in that institution in the student's freshman year. For an
academic fee that was not charged in the student's freshman year,
after the fee is initially charged, the institution may not
increase the amount of the fee charged to the student in any
subsequent semester or other term to which this subsection applies.
(h) Notwithstanding any other provision of this chapter,
after the period described by Subsection (d), a general academic
teaching institution may not charge a student to whom this section
applies:
(1) tuition for any course at a rate that exceeds the
rate the institution charges for the same or a similar course to a
student who enrolls as a first-time resident freshman in the same
academic year; or
(2) an academic fee in an amount that exceeds the
amount of the fee the institution charges a first-time resident
freshman student enrolled in the same degree program and with the
same course load in the same semester or other academic term.
(i) In consultation with general academic teaching
institutions, the coordinating board shall adopt any rules
necessary to administer this section, including:
(1) rules relating to the equivalency of courses
offered during a student's freshman year and courses in which the
student enrolls after the student's freshman year;
(2) rules consistent with Subsection (f) that:
(A) provide for determining tuition rates for
students who transfer between institutions of higher education; and
(B) prescribe the types of documentation a
transfer student must submit to establish eligibility under that
subsection; and
(3) rules as described by Subsection (j) to allow
students to suspend their enrollment or giving students additional
time to complete their degree programs.
(j) The coordinating board shall adopt rules to allow a
student to pay tuition at the rates provided by Subsection (e) or
(f), as applicable, and to pay academic fees in the amounts provided
by Subsection (g) if the student satisfies the other requirements
of this section but, solely as a result of a hardship or other good
cause shown, is unable to remain continuously enrolled at a general
academic teaching institution as required by Subsection (c)(2) or
other institution of higher education as required by Subsection
(f), or to complete the student's degree program before the
applicable date described by Subsection (d). For purposes of this
subsection, a hardship or other good cause shown includes a showing
of:
(1) a severe illness or other debilitating condition
that affects the student's ability to satisfy the requirement of
Subsection (c)(2), (d), or (f); or
(2) the student's responsibility for the care of a
sick, injured, or needy person if the provision of care affects the
student's ability to satisfy the requirement of Subsection (c)(2),
(d), or (f).
(k) The limitations on total academic costs that may be
charged to a student provided under Sections 54.016(c) and (d) and
under Section 54.016(e-1), (e-2), or (e-3), as applicable to the
institution, do not apply to a student who elects to pay tuition and
academic fees under this section during the period described by
Subsection (d) applicable to the student. Beginning with the
2010-2011 academic year, the amount of tuition and academic fees
charged by an institution to a freshman student under this section
for an academic year may not exceed the amount of tuition and
academic fees that the institution would have charged to a
similarly situated freshman student under this section in the
preceding academic year by more than five percent.
(l) This section does not apply to a student who enters an
institution of higher education for the first time before the 2009
fall semester. This subsection expires January 1, 2015.
SECTION 3. Section 54.0513, Education Code, is amended by
amending Subsection (c) and adding Subsection (g) to read as
follows:
(c) Amounts collected by an institution of higher education
under this section are institutional funds as defined by Section
51.009 [of this code] and shall be accounted for as designated
funds. These funds shall not be accounted for in a general
appropriations act in such a way as to reduce the general revenue
appropriation to a particular institution except as provided by
Section 54.016(e).
(g) In setting the rate or rates of tuition to be charged
under this section for an academic year, the governing board of each
institution to which this section applies shall take into account
any reduction in the percentage of that tuition that will be
required to be set aside for student financial assistance under
Subchapter B, Chapter 56, from the percentage required to be set
aside in the preceding academic year, and shall ensure that any
increase in the rate or rates of tuition charged under this section
that the governing board would otherwise have made for that
academic year is reduced accordingly.
SECTION 4. Section 54.0515, Education Code, is amended by
amending Subsections (e) and (f) and adding Subsections (f-1) and
(f-2) to read as follows:
(e) It is the legislature's intent that each institution of
higher education[, as a condition to tuition deregulation under
Section 54.0513,] reasonably implement the following:
(1) each institution shall make satisfactory progress
towards the goals provided in its master plan for higher education
and in "Closing the Gaps," the state's master plan for higher
education; and
(2) each institution shall meet acceptable
performance criteria, including measures such as graduation rates,
retention rates, enrollment growth, educational quality, efforts
to enhance minority participation, opportunities for financial
aid, and affordability.
(f) The committee shall:
(1) meet at the call of either chair;
(2) monitor and regularly report to the legislature on
each institution of higher education's compliance with the
requirements of Subsection (e); and
(3) receive and review information concerning the
affordability and accessibility of higher education[, including
the impact of tuition deregulation].
(f-1) The committee shall oversee the Legislative Budget
Board's development of:
(1) the methodology under Section 51.973(a)(1) used
for estimating the core operational costs of general academic
teaching institutions under that subdivision; and
(2) the list of general academic teaching institutions
certified under Section 51.973(a)(2) used for determining the
institutions to which Sections 54.016(c) and (d) apply.
(f-2) It is the intent of the legislature, not later than
the 2014-2015 academic year, to phase out the requirements provided
by Subchapter B, Chapter 56, that a portion of tuition charged under
Section 54.0513 be set aside for student financial assistance. The
committee shall examine and make recommendations for an appropriate
timetable and procedures for phasing out the set-aside
requirements, including recommendations regarding replacing
revenue lost as a result of the phase-out from the general revenue
fund or other appropriate sources. For that purpose, the committee
shall solicit relevant information and recommendations from
affected institutions of higher education, including information
regarding the types of financial assistance that are funded from
the amounts set aside, and the impact that phasing out the set-aside
requirement would have on the financial assistance program of each
institution.
SECTION 5. Subchapter Z, Chapter 51, Education Code, is
amended by adding Section 51.973 to read as follows:
Sec. 51.973. BIENNIAL REPORT BY LEGISLATIVE BUDGET BOARD
REGARDING CERTAIN UNIVERSITY COSTS. (a) Not later than September
1 of each even-numbered year, the Legislative Budget Board shall
submit to the Senate Finance Committee, the House Appropriations
Committee, and the standing committee of each house with primary
jurisdiction over higher education:
(1) for consideration by the members of those
committees in determining the amount of general revenue
appropriations to general academic teaching institutions and
tuition rates at those institutions, the Legislative Budget Board's
estimate of the core operational costs for the next state fiscal
biennium for each general academic teaching institution, based on a
methodology that:
(A) projects for each year of the next biennium:
(i) changes in student enrollment for each
institution; and
(ii) a rate of inflation; and
(B) uses data from each institution's annual
financial report regarding costs for instruction, academic
support, institutional support, operations and maintenance of
physical plants, and student services; and
(2) for purposes of determining the general academic
teaching institutions to which Sections 54.016(c) and (d) apply, a
certified list of all general academic teaching institutions ranked
according to the amount of total academic costs charged per student
in the academic years covered by the current state fiscal biennium,
including an indication of the institutions to which Sections
54.016(c) and (d) apply.
(b) Beginning in 2013, the Legislative Budget Board shall
submit with its estimate under Subsection (a)(1) a comparison of
each institution's actual core operational costs for the preceding
state fiscal biennium to the board's previous estimate of the
institution's core operational costs for that biennium.
SECTION 6. Subsection (a), Section 56.011, Education Code,
is amended to read as follows:
(a) The governing board of each institution of higher
education shall cause to be set aside not less than 15 [20] percent
of any amount of tuition charged to a resident undergraduate
student under Section 54.0513 in excess of $46 per semester credit
hour. The funds set aside under this section by an institution
shall be used to provide financial assistance for resident
undergraduate students enrolled in the institution.
SECTION 7. Section 56.465, Education Code, is repealed.
SECTION 8. Not later than September 1, 2010, each general
academic teaching institution shall submit to the Legislative
Budget Board, the Senate Committee on Finance, the House
Appropriations Committee, and the standing committee of each house
with primary jurisdiction over higher education a detailed plan for
reducing the institution's operational costs by at least five
percent.
SECTION 9. The Texas Higher Education Coordinating Board
shall adopt the rules required by Section 54.017, Education Code,
as added by this Act, as soon as practicable after this Act takes
effect. For that purpose, the coordinating board may adopt the
initial rules in the manner provided by law for emergency rules.
SECTION 10. (a) The changes in law made by this Act to
Subsection (a), Section 56.011, Education Code, apply beginning
with tuition charged for the 2010-2011 academic year.
(b) The repeal by this Act of Section 56.465, Education
Code, applies beginning with tuition charged for the 2010-2011
academic year.
SECTION 11. This Act does not make an appropriation. This
Act takes effect only if a specific appropriation for the
implementation of the Act is provided in a general appropriations
act of the 81st Legislature.
SECTION 12. (a) Except as provided by Section 11 of this
Act and by Subsection (b) of this section, this Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2009, except
as provided by Section 11 of this Act and by Subsection (b) of this
section.
(b) Sections 6, 7, and 10 of this Act take effect August 1,
2010, but only if the 81st Legislature, in an appropriations act
enacted on or before that date, appropriates state revenue to the
institutions of higher education to which Section 56.465, Education
Code, applies for the express purpose of providing additional
revenue for the Texas B-On-time loan program to replace the portion
of tuition set aside for that program under Section 54.465,
Education Code.