H.B. No. 9
AN ACT
relating to student success-based funding for and reporting
regarding public institutions of higher education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act shall be known as the Higher Education
Outcomes-Based Funding Act.
SECTION 2. Section 61.059, Education Code, is amended by
amending Subsections (a) and (c) and adding Subsection (b-1) to
read as follows:
(a) To finance a system of higher education and to secure an
equitable distribution of state funds deemed to be available for
higher education, the board shall perform the functions described
in this section. Funding policies shall:
(1) allocate resources efficiently and provide
incentives for programs of superior quality and for institutional
diversity;
(2) provide incentives for supporting the five-year
master plan developed and revised under Section 61.051; [and]
(3) discourage unnecessary duplication of course
offerings between institutions and unnecessary construction on any
campus; and
(4) emphasize an alignment with education goals
established by the board.
(b-1) A committee under Subsection (b) must be composed of
representatives of a cross-section of institutions representing
each of the institutional groupings under the board's
accountability system. The commissioner of higher education shall
solicit recommendations for the committee's membership from the
chancellor of each university system and from the president of each
institution of higher education that is not a component of a
university system. The chancellor of a university system shall
recommend to the commissioner at least one institutional
representative for each institutional grouping to which a component
of the university system is assigned. The president of an
institution of higher education that is not a component of a
university system shall recommend to the commissioner at least one
institutional representative for the institutional grouping to
which the institution is assigned.
(c) Formulas for basic funding shall:
(1) reflect the role and mission of each institution;
(2) [, shall] emphasize funding elements that directly
support faculty;
(3) [, and shall] reflect both fixed and variable
elements of cost; and
(4) incorporate, as the board considers appropriate,
goals identified in the board's long-range statewide plan developed
under Section 61.051.
SECTION 3. Subchapter C, Chapter 61, Education Code, is
amended by adding Section 61.0593 to read as follows:
Sec. 61.0593. STUDENT SUCCESS-BASED FUNDING
RECOMMENDATIONS. (a) The legislature finds that it is in the
state's highest public interest to evaluate student achievement at
institutions of higher education and to develop higher education
funding policy based on that evaluation. Funding policies that
promote postsecondary educational success based on objective
indicators of relative performance, such as degree completion
rates, are critical to maintaining the state's competitiveness in
the national and global economy and supporting the general welfare
of this state. Therefore, the purpose of this section is to ensure
that institutions of higher education produce student outcomes that
are directly aligned with the state's education goals and economic
development needs.
(b) In this section:
(1) "At-risk student" means an undergraduate student
of an institution of higher education:
(A) who has been awarded a grant under the
federal Pell Grant program; or
(B) who, on the date the student initially
enrolled in the institution:
(i) was 20 years of age or older;
(ii) had a score on the Scholastic
Assessment Test (SAT) or the American College Test (ACT) that was
less than the national mean score for students taking that test;
(iii) was enrolled as a part-time student;
or
(iv) had not received a high school diploma
but had received a high school equivalency certificate within the
last six years.
(2) "Critical field" means a field of study designated
as a critical field under Subsection (c).
(c) Except as otherwise provided under Subdivision (2), the
fields of engineering, computer science, mathematics, physical
science, allied health, nursing, and teaching certification in the
field of science or mathematics are critical fields. Beginning
September 1, 2012, the board, based on the board's determination of
those fields of study in which the support and development of
postsecondary education programs at the bachelor's degree level are
most critically necessary for serving the needs of this state, by
rule may:
(1) designate as a critical field a field of study that
is not currently designated by this subsection or by the board as a
critical field; or
(2) remove a field of study from the list of fields
currently designated by this subsection or by the board as critical
fields.
(d) This subsection applies only to a general academic
teaching institution other than a public state college. In
devising its funding formulas and making its recommendations to the
legislature relating to institutional appropriations of funds
under Section 61.059 for institutions to which this subsection
applies, the board, in the manner and to the extent the board
considers appropriate and in consultation with those institutions,
shall incorporate the consideration of undergraduate student
success measures achieved during the preceding state fiscal
biennium by each of the institutions. At the time the board makes
those recommendations, the board shall also make recommendations
for incorporating the success measures, to the extent the board
considers appropriate in consultation with those institutions,
into the distribution of any incentive funds available for those
institutions, including performance incentive funds under
Subchapter D, Chapter 62. The board's recommendations must provide
alternative approaches for applying the success measures and must
compare the effects on funding of applying the success measures
within the formula for base funding to applying the success
measures as a separate formula. The success measures considered by
the board under this subsection may include:
(1) the total number of bachelor's degrees awarded by
the institution;
(2) the total number of bachelor's degrees in critical
fields awarded by the institution;
(3) the total number of bachelor's degrees awarded by
the institution to at-risk students; and
(4) as determined by the board, the six-year
graduation rate of undergraduate students of the institution who
initially enrolled in the institution in the fall semester
immediately following their graduation from a public high school in
this state as compared to the six-year graduation rate predicted
for those students based on the composition of the institution's
student body.
(e) Notwithstanding Subsection (d):
(1) not more than 10 percent of the total amount of
general revenue appropriations of base funds for undergraduate
education recommended by the board for all institutions to which
Subsection (d) applies for a state fiscal biennium may be based on
student success measures; and
(2) the board's recommendation for base funding for
undergraduate education based on student success measures does not
reduce or otherwise affect funding recommendations for graduate
education.
(f) This subsection applies only to public junior colleges,
public state colleges, and public technical institutes. In
devising its funding formulas and making its recommendations to the
legislature relating to institutional appropriations of incentive
funds for institutions to which this subsection applies, the board,
in the manner and to the extent the board considers appropriate and
in consultation with those institutions, shall incorporate the
consideration of the undergraduate student success measures
achieved during the preceding state fiscal biennium by each of the
institutions. The success measures considered by the board under
this subsection may include:
(1) the following academic progress measures achieved
by students at the institution:
(A) successful completion of:
(i) developmental education in
mathematics;
(ii) developmental education in English;
(iii) the first college-level mathematics
course with a grade of "C" or higher;
(iv) the first college-level English course
with a grade of "C" or higher; and
(v) the first 30 semester credit hours at
the institution; and
(B) transfer to a four-year college or university
after successful completion of at least 15 semester credit hours at
the institution; and
(2) the total number of the following awarded by the
institution:
(A) associate's degrees;
(B) bachelor's degrees under Section 130.0012;
and
(C) certificates identified by the board for
purposes of this section as effective measures of student success.
(g) Biennially, the board, in consultation with
institutions to which Subsections (d) and (f) apply, shall review
the student success measures considered by the board under those
subsections.
(h) The board shall include in its findings and
recommendations to the legislature under Section 61.059:
(1) an evaluation of the effectiveness of the student
success measures described by this section in achieving the purpose
of this section during the preceding state fiscal biennium; and
(2) any related recommendations the board considers
appropriate.
(i) The board shall adopt rules for the administration of
this section, including rules requiring each institution of higher
education to submit to the board any student data or other
information the board considers necessary for the board to carry
out its duties under this section.
SECTION 4. Subchapter C, Chapter 61, Education Code, is
amended by adding Section 61.0905 to read as follows:
Sec. 61.0905. REPORTS TO JOINT OVERSIGHT COMMITTEE. (a)
Not later than September 30, 2011, and subsequently not later than
July 1, 2012, the board shall submit to the Joint Oversight
Committee on Higher Education Governance, Excellence, and
Transparency a written report reviewing, comparing, and
highlighting national and global best practices on:
(1) improving student outcomes, including student
retention, graduations, and graduation rates; and
(2) higher education governance, administration, and
transparency.
(b) This section expires August 31, 2013.
SECTION 5. 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, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 9 was passed by the House on May 13,
2011, by the following vote: Yeas 118, Nays 22, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 9 on May 27, 2011, by the following vote: Yeas 127, Nays 14, 2
present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 9 was passed by the Senate, with
amendments, on May 24, 2011, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor