88R18694 KJE-F

By: VanDeaver, Kuempel, Buckley, Bonnen, H.B. No. 8

Longoria, et al.

Substitute the following for H.B. No. 8:

By: Kuempel C.S.H.B. No. 8

A BILL TO BE ENTITLED

AN ACT

relating to the administration, coordination, and support of public higher education, including the public junior college state finance program and a Financial Aid for Swift Transfer (FAST) program to enable certain students to enroll at no cost to the student in dual credit courses offered by certain public institutions of higher education.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 28.009(b-2), Education Code, is amended to read as follows:

(b-2) Any agreement, including a memorandum of understanding or articulation agreement, between a school district and public institution of higher education to provide a dual credit program described by Subsection (b-1) must:

(1) include specific program goals aligned with the statewide goals developed under Subsection (b-1);

(2) establish common advising strategies and terminology related to dual credit and college readiness;

(3) provide for the alignment of endorsements described by Section 28.025(c-1) offered by the district, and dual credit courses offered under the agreement that apply towards those endorsements, with postsecondary pathways and credentials at the institution and industry certifications;

(4) identify tools, including tools developed by the agency, the Texas Higher Education Coordinating Board, or the Texas Workforce Commission, to assist school counselors, students, and families in selecting endorsements offered by the district and dual credit courses offered under the agreement;

(5) establish, or provide a procedure for establishing, the course credits that may be earned under the agreement, including by developing a course equivalency crosswalk or other method for equating high school courses with college courses and identifying the number of credits that may be earned for each course completed through the program;

(6) describe the academic supports and, if applicable, guidance that will be provided to students participating in the program;

(7) establish the district's and the institution's respective roles and responsibilities in providing the program and ensuring the quality and instructional rigor of the program;

(8) state the sources of funding for courses offered under the program, including, at a minimum, the sources of funding for tuition, transportation, and any required fees or textbooks for students participating in the program;

(9) require the district and the institution to consider the use of free or low-cost open educational resources in courses offered under the program;

(10) ensure the accurate and timely exchange of information necessary for an eligible student to enroll at no cost to the student in a dual credit course as provided by Section 28.0095;

(11) be posted each year on the district's and the institution's respective Internet websites; and

(12) [(11)] designate at least one employee of the district or institution as responsible for providing academic advising to a student who enrolls in a dual credit course under the program before the student begins the course.

SECTION 2. Subchapter A, Chapter 28, Education Code, is amended by adding Section 28.0095 to read as follows:

Sec. 28.0095. FINANCIAL AID FOR SWIFT TRANSFER (FAST) PROGRAM. (a) In this section:

(1) "Charter school" means a charter school operating under Chapter 12.

(2) "Coordinating board" means the Texas Higher Education Coordinating Board.

(3) "Dual credit course" includes a course offered for joint high school and junior college credit under Section 130.008 or another course offered by an institution of higher education for which a high school student may earn credit toward satisfaction of:

(A) a requirement necessary to obtain an industry-recognized credential or certificate or an associate degree;

(B) a foreign language requirement at an institution of higher education;

(C) a requirement in the core curriculum, as that term is defined by Section 61.821, at an institution of higher education; or

(D) a requirement in a field of study curriculum developed by the coordinating board under Section 61.823.

(4) "Institution of higher education" has the meaning assigned by Section 61.003.

(b) The agency and the coordinating board shall jointly establish the Financial Aid for Swift Transfer (FAST) program to allow eligible students to enroll at no cost to the student in dual credit courses at participating institutions of higher education.

(c) A student is eligible to enroll at no cost to the student in a dual credit course under the program if the student:

(1) is enrolled:

(A) in high school in a school district or charter school; and

(B) in a dual credit course at a participating institution of higher education; and

(2) was educationally disadvantaged at any time during the four school years preceding the student's enrollment in the dual credit course described by Subdivision (1)(B).

(d) An institution of higher education is eligible to participate in the program only if the institution charges for each dual credit course offered by the institution an amount of tuition that does not exceed the amount prescribed by coordinating board rule.

(e) Each school district or charter school shall:

(1) on a high school student's enrollment in a dual credit course, determine whether the student meets the criteria for the program under Subsection (c)(2); and

(2) notify the institution of higher education that offers the dual credit course in which the student is enrolled of the district's or school's determination under Subdivision (1).

(f) A school district or charter school may make the determination under Subsection (e)(1) based on the district's or school's records, the agency's records, or any other method authorized by commissioner rule. If the district or school bases the determination on a method other than the agency's records, the district or school shall report the method used and the data on which the method is based to the agency for purposes of verification.

(g) On receipt of notice under Subsection (e)(2), a participating institution of higher education shall certify to the agency and the coordinating board the student's eligibility for the program.

(h) The coordinating board shall distribute money transferred to the coordinating board under Section 48.308 to the participating institutions of higher education in proportion to the number of dual credit courses in which eligible students are enrolled at the institution.

(i) The commissioner and the commissioner of higher education shall coordinate as necessary to:

(1) confirm an eligible student's enrollment in a participating institution of higher education; and

(2) obtain or share data necessary to verify a student's eligibility under Subsection (c)(2).

(j) The commissioner and the coordinating board shall adopt rules as necessary to implement this section.

SECTION 3. Section 28.010(a), Education Code, is amended to read as follows:

(a) Each school year, a school district shall notify the parent of each district student enrolled in grade nine or above of:

(1) the availability of:

(A) programs in the district under which a student may earn college credit, including advanced placement programs, dual credit programs, joint high school and college credit programs, and international baccalaureate programs;

(B) career and technology education programs or other work-based education programs in the district, including any internship, externship, or apprenticeship programs or a P-TECH program under Subchapter N, Chapter 29; [and]

(C) subsidies based on financial need available for fees paid to take college advanced placement tests or international baccalaureate examinations under Section 28.054; and

(D) funding for enrollment in dual credit courses under Section 28.0095; and

(2) the qualifications for:

(A) enrolling in programs described by Subdivision (1)(A) or (B); or

(B) funding described by Subdivision (1)(D).

SECTION 4. Subchapter G, Chapter 48, Education Code, is amended by adding Section 48.308 to read as follows:

Sec. 48.308. ALLOTMENT FOR FINANCIAL AID FOR SWIFT TRANSFER (FAST) PROGRAM. (a) In this section:

(1) "Coordinating board" means the Texas Higher Education Coordinating Board.

(2) "FAST program" means the Financial Aid for Swift Transfer (FAST) program under Section 28.0095.

(b) An institution of higher education participating in the FAST program is entitled to an allotment in an amount equal to the amount of tuition set by coordinating board rule under Section 28.0095(d) for each dual credit course in which a student eligible to participate in the FAST program is enrolled at the institution.

(c) The agency shall transfer the amount appropriated to the agency for purposes of this section to the coordinating board for distribution in accordance with Section 28.0095(h).

(d) The agency and the coordinating board shall coordinate as necessary to implement this section.

(e) It is the intent of the legislature that the state ensure ongoing funding for the FAST program as an allotment under the Foundation School Program.

SECTION 5. Section 51.907, Education Code, is amended by adding Subsections (c-1) and (c-2) to read as follows:

(c-1) An institution of higher education may not count toward the number of courses permitted to be dropped under Subsection (c) or a policy adopted under Subsection (d) a course that a student dropped while enrolled in a baccalaureate degree program previously earned by the student.

(c-2) An institution of higher education may not count toward the number of courses permitted to be dropped under Subsection (c) or a policy adopted under Subsection (d) a dual credit course that a student dropped before graduating from high school.

SECTION 6. Section 54.3531(b), Education Code, is amended to read as follows:

(b) Notwithstanding Subsection (a), a student may not receive an exemption under this section for any course if the student has previously attempted a number of semester credit hours for courses taken at any institution of higher education while classified as a resident student for tuition purposes in excess of the maximum number of those hours specified by Section 61.0595(a) as eligible for funding under the formulas established under Section 61.059 or Chapter 130A.

SECTION 7. Section 61.003(2), Education Code, is amended to read as follows:

(2) "Public junior college" means any junior college listed as a public junior college [certified by the board] in accordance with Section 61.063 [of this chapter].

SECTION 8. Section 61.051, Education Code, is amended by adding Subsection (b) to read as follows:

(b) The board may participate in the establishment and operation of an affiliated nonprofit organization whose purpose is to raise money for or provide services or other benefits to the board.

SECTION 9. Section 61.0571, Education Code, is amended by adding Subsections (c), (d), (e), and (f) to read as follows:

(c) The board may provide administrative support and services to institutions of higher education as necessary to implement this chapter, Chapter 130, or Chapter 130A.

(d) The board may establish an institutional collaboration center within the board to support the implementation of Chapter 130A and the efficient and effective operations of institutions of higher education.

(e) From money appropriated or otherwise available for the purpose, the board may procure goods and services for the direct benefit of an institution of higher education and enter into an interagency contract under Chapter 771, Government Code, with the institution to reimburse the board for the cost of the goods and services.

(f) An affiliated nonprofit organization described by Section 61.051(b) may accept gifts, grants, or donations from any public or private source to pay for goods or services procured for the direct benefit of an institution of higher education under Subsection (e).

SECTION 10. Section 61.059, Education Code, is amended by amending Subsections (b), (b-1), and (r) and adding Subsection (s) to read as follows:

(b) The board shall devise, establish, and periodically review and revise formulas for the use of the governor and the Legislative Budget Board in making appropriations recommendations to the legislature for [all] institutions of higher education other than public junior colleges funded under Chapter 130A[, including the funding of postsecondary vocational-technical programs]. As a specific element of the periodic review, the board shall study and recommend changes in the funding formulas based on the role and mission statements of those institutions of higher education. In carrying out its duties under this section, the board shall employ an ongoing process of committee review and expert testimony and analysis.

(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, other than public junior colleges funded under Chapter 130A. 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 may [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 may [shall] recommend to the commissioner at least one institutional representative for the institutional grouping to which the institution is assigned.

(r) The board shall exclude contact hours or semester credit hours related to a course for which a student is generating formula funding for the third time from the contact hours or semester credit hours reported to the Legislative Budget Board for formula funding purposes.

(s) Notwithstanding any other law, the board may not exclude from the number of semester credit hours reported [to the Legislative Budget Board] for formula funding under this section or Chapter 130A semester credit hours for any course taken up to three times by a student who:

(1) has reenrolled at an institution of higher education following a break in enrollment from the institution or another institution of higher education covering the 24-month period preceding the first class day of the initial semester or other academic term of the student's reenrollment; and

(2) successfully completed at least 50 semester credit hours of course work at an institution of higher education before that break in enrollment.

SECTION 11. Sections 61.0595(a), (d), and (f), Education Code, are amended to read as follows:

(a) In the formulas established under Section 61.059 or Chapter 130A, the board may not include funding for semester credit hours earned by a resident undergraduate student who before the semester or other academic session begins has previously attempted a number of semester credit hours for courses taken at any institution of higher education while classified as a resident student for tuition purposes that exceeds the number of semester credit hours required for completion of the degree program or programs in which the student is enrolled, including minors and double majors, and for completion of any certificate or other special program in which the student is also enrolled, including a program with a study-abroad component, by at least:

(1) for an associate degree program, 15 hours; or

(2) for a baccalaureate degree program, 30 hours.

(d) The following are not counted for purposes of determining whether the student has previously earned the number of semester credit hours specified by Subsection (a):

(1) semester credit hours earned by the student before receiving a baccalaureate degree that has previously been awarded to the student;

(2) semester credit hours earned by the student by examination or under any other procedure by which credit is earned without registering for a course for which tuition is charged;

(3) credit for a remedial education course, a technical course, a workforce education course funded according to contact hours, or another course that does not count toward a degree program at the institution;

(4) semester credit hours earned by the student at a private institution or an out-of-state institution;

(5) semester credit hours earned by the student before graduating from high school and used to satisfy high school graduation requirements; [and]

(6) the first additional 15 semester credit hours earned toward a degree program by a student who:

(A) has reenrolled at an institution of higher education following a break in enrollment from the institution or another institution of higher education covering the 24-month period preceding the first class day of the initial semester or other academic term of the student's reenrollment; and

(B) successfully completed at least 50 semester credit hours of course work at an institution of higher education before that break in enrollment; and

(7) semester credit hours earned by the student before receiving an associate degree that has been previously awarded to the student.

(f) In the formulas established under Section 61.059 or Chapter 130A, the board shall include without consideration of Subsection (a) funding for semester credit hours earned by a student who initially enrolled as an undergraduate student in any institution of higher education before the 1999 fall semester.

SECTION 12. Section 61.063, Education Code, is amended to read as follows:

Sec. 61.063. LISTING [AND CERTIFICATION] OF PUBLIC JUNIOR COLLEGES; ELIGIBILITY FOR STATE APPROPRIATIONS. (a) The commissioner of higher education shall file with the [state] comptroller and the state auditor on or before September [October] 1 of each year a list of each [the] public junior college [colleges] in this state that has certified to the board under Section 130.003 that the college is in compliance with the requirements of Subsection (b) of that section. [The commissioner shall certify the names of those colleges that have complied with the standards, rules, and regulations prescribed by the board.]

(b) Only a public junior college included on the list under Subsection (a) is [those colleges which are so certified shall be] eligible for and may receive money appropriated [any appropriation made] by the legislature to public junior colleges.

SECTION 13. Section 61.882(d), Education Code, is amended to read as follows:

(d) In awarding grants under this subchapter, the board:

(1) shall, to the greatest extent practicable:

(A) award grants to at least one eligible entity in each region of the state; and

(B) ensure that each training program:

(i) matches regional workforce needs;

(ii) is supported by a labor market analysis of job postings and employers hiring roles with the skills developed by the program; and

(iii) does not duplicate existing program offerings except as necessary to accommodate regional demand; and

(2) may give preference to applicants that:

(A) represent a consortium of lower-division institutions of higher education;

(B) prioritize training to displaced workers;

(C) offer affordable training programs to students; or

(D) partner with employers, local chambers of commerce, trade associations, economic development corporations, and local workforce boards to analyze job postings and identify employers hiring roles with the skills developed by the training programs.

SECTION 14. Section 130.001(b), Education Code, is amended to read as follows:

(b) The coordinating board shall have the responsibility for adopting policies, enacting regulations, and establishing general rules necessary for carrying out the duties with respect to public junior colleges as prescribed by the legislature, and with the advice and assistance of the commissioner of higher education, shall have authority to:

(1) authorize the creation of public junior college districts as provided in the statutes, giving particular attention to the need for a public junior college in the proposed district and the ability of the district to provide adequate local financial support;

(2) dissolve any public junior college district which has failed to establish and maintain a junior college within three years from the date of its authorization;

(3) adopt standards for the operation of public junior colleges and prescribe the rules and regulations for such colleges;

(4) require of each public junior college such reports as deemed necessary in accordance with the coordinating board's rules and regulations; and

(5) establish a standing advisory committee [commissions] composed of representatives of public junior colleges [and other citizens of the state] to provide advice and counsel to the coordinating board with respect to the funding of public junior colleges necessary to carry out this chapter and Chapter 130A.

SECTION 15. Sections 130.003(a), (b), (e), and (f), Education Code, are amended to read as follows:

(a) There shall be appropriated biennially from money in the state treasury not otherwise appropriated an amount sufficient to supplement local funds for the proper support, maintenance, operation, and improvement of those public junior colleges of Texas that meet the standards prescribed by this chapter. The sum shall be allocated in accordance with Chapter 130A [on the basis of contact hours within categories developed, reviewed, and updated by the coordinating board].

(b) To be eligible for and to receive money appropriated under Subsection (a) [a proportionate share of the appropriation], a public junior college must certify to the coordinating board, in the manner prescribed by coordinating board rule, that the college:

(1) offers [be certified as a public junior college as prescribed in Section 61.063;

[(2) offer] a minimum of 24 semester hours of vocational and/or terminal courses;

(2) collects [(3) have complied with all existing laws, rules, and regulations governing the establishment and maintenance of public junior colleges;

[(4) collect], from each full-time and part-time student enrolled, tuition [matriculation] and other [session] fees in the amounts required by law or in the amounts set by the governing board of the junior college district as authorized by this title;

(3) grants [(5) grant], when properly applied for, the scholarships and tuition exemptions provided for in this code;

(4) [and

[(6)] for a public junior college established on or after September 1, 1986, levies and collects [levy and collect] ad valorem taxes as provided by law for the operation and maintenance of the [public junior] college; and

(5) has complied with all laws and coordinating board rules for the establishment and operation of a public junior college.

(e) The primary purpose of each public junior [community] college shall be to provide:

(1) technical programs up to two years in length leading to associate degrees or certificates;

(2) vocational programs leading directly to employment in semi-skilled and skilled occupations;

(3) [freshman and sophomore] courses in the core curriculum or a field of study curriculum, as those terms are defined by Section 61.821 [arts and sciences];

(4) continuing adult education programs for occupational or cultural upgrading;

(5) compensatory education programs designed to fulfill the commitment of an admissions policy allowing the enrollment of disadvantaged students;

(6) a continuing program of counseling and guidance designed to assist students in achieving their individual educational goals;

(7) work force development programs designed to meet local and statewide needs;

(8) adult literacy and other basic skills programs for adults; and

(9) such other purposes as may be prescribed by the coordinating board [Texas Higher Education Coordinating Board] or local governing boards in the best interest of post-secondary education in this state [Texas].

(f) This section does not affect the application of [alter, amend, or repeal] Section 54.231 [54.060 of this code].

SECTION 16. Section 130.0031, Education Code, is amended to read as follows:

Sec. 130.0031. TRANSFERS: WHEN MADE. (a) In consultation with the advisory committee established under Section 130.001(b)(5), the Texas Higher Education Coordinating Board by rule shall adopt a payment schedule by which money appropriated to junior college districts under this chapter and Chapter 130A is distributed to those districts [In this section:

[(1) "Category 1 junior college" means a junior college having not more than 2,500 students in fall head count enrollment for the previous fiscal year and not more than $300,000 of local taxes collected, excluding taxes for debt service, in the previous fiscal year.

[(2) "Category 2 junior college" means a junior college having more than 2,500 students in fall head count enrollment for the previous fiscal year or more than $300,000 of local taxes collected, excluding taxes for debt service, in the previous fiscal year].

(b) The Texas Higher Education Coordinating Board may modify the [Money appropriated for payment to junior colleges under the authority of Section 130.003 of this code shall be paid to each eligible category 1 junior college out of the public junior college reimbursement fund as follows:

[(1) 24 percent of the yearly entitlement of the junior college shall be paid in two equal installments to be made on or before the 25th day of September and October; and

[(2) 76 percent of the yearly entitlement of the junior college shall be paid in eight equal installments to be made on or before the 25th day of November, December, January, February, March, April, May, and June.

[(c) Money appropriated for payment to junior colleges under the authority of Section 130.003 of this code shall be paid to each eligible category 2 junior college out of the public junior college reimbursement fund as follows:

[(1) 24 percent of the yearly entitlement of the junior college shall be paid in two equal installments to be made on or before the 25th day of September and October; and

[(2) 76 percent of the yearly entitlement of the junior college shall be paid in eight equal installments to be made on or before the 25th day of November, December, March, April, May, June, July, and August.

[(d) The] amount of any installment required under the payment schedule adopted under Subsection (a) [by this section may be modified] to, in accordance with this chapter, Chapter 130A, the General Appropriations Act, or coordinating board rule:

(1) provide the junior college district with the proper amount to which the junior college district may be entitled by law; and

(2) [to] correct errors in the allocation or distribution of funds.

(c) If the amount of an installment under the payment schedule adopted under Subsection (a) [this section] is required to be equal to the amount of another installment [other installments], the amount of the other installment [installments] may be adjusted to provide for that equality. A payment under this section is not invalid because it is not equal to other installments.

SECTION 17. Section 130.0033(c), Education Code, is amended to read as follows:

(c) Charging tuition at a reduced rate under this section does not affect the right of the public junior college to an allocation [a proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003] for the contact hours attributable to students paying tuition at the reduced rate.

SECTION 18. Section 130.0034(a), Education Code, is amended to read as follows:

(a) The governing board of a [public] junior college district may charge a student a higher rate of tuition than the tuition that would otherwise be charged for a course in which the student enrolls if:

(1) the student has previously enrolled in the same course or a course of substantially the same content and level two or more times; and

(2) the student's enrollment in the course is not included in the contact hours used to determine the junior college's allocation [proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003].

SECTION 19. Section 130.0051(a), Education Code, is amended to read as follows:

(a) The board of trustees of a junior college district by resolution may change the name of the district or a college within the district [by eliminating the words "community" or "junior" from the name of the district or college], unless the change would cause the district or college to have the same or substantially the same name as an existing district, college, or other public or private institution of higher education in this state.

SECTION 20. Section 130.008(c), Education Code, is amended to read as follows:

(c) The contact hours attributable to the enrollment of a high school student in a course offered for joint high school and junior college credit under this section, excluding a course for which the student attending high school may receive course credit toward the physical education curriculum requirement under Section 28.002(a)(2)(C), shall be included in the contact hours used to determine the junior college's allocation [proportionate share] of the state money appropriated and distributed to public junior colleges under this chapter and Chapter 130A [Sections 130.003 and 130.0031], even if the junior college waives all or part of the tuition or fees for the student under Subsection (b).

SECTION 21. Section 130.085(b), Education Code, is amended to read as follows:

(b) This action by the board of trustees does not affect their authority under Section 130.123 [of this code], nor does this section in any way supersede that section. This action of the board does not affect the right of the college to an allocation [a proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003 of this code].

SECTION 22. Section 130.090(c), Education Code, is amended to read as follows:

(c) The grant of an exemption from tuition under Subsection (b) does not affect the right of a junior college to an allocation [a proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003] attributable to the contact hours of the junior college with the student receiving the exemption.

SECTION 23. Sections 130.310(a) and (b), Education Code, are amended to read as follows:

(a) Except as provided by Subsection (b), a degree program created under this subchapter may be funded solely by a public junior college's allocation [proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003], local funds, and private sources. This subsection does not require the legislature to appropriate state funds to support a degree program created under this subchapter. The coordinating board shall weigh contact hours attributable to students enrolled in a junior-level or senior-level course offered under this subchapter used to determine a public junior college's allocation [proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003] in the same manner as a lower division course in a corresponding field.

(b) Notwithstanding Subsection (a), in its recommendations to the legislature relating to state funding for public junior colleges, the coordinating board shall recommend that a public junior college authorized to offer baccalaureate degree programs under Section 130.303(a) or 130.304 receive substantially the same state support for junior-level and senior-level courses in the fields of applied science, applied technology, dental hygiene, and nursing offered under this subchapter as that provided to a general academic teaching institution for substantially similar courses. For purposes of this subsection, in determining the contact hours attributable to students enrolled in a junior-level or senior-level course in the field of applied science, applied technology, dental hygiene, or nursing offered under this subchapter used to determine a public junior college's allocation [proportionate share] of state appropriations under this chapter and Chapter 130A [Section 130.003], the coordinating board shall weigh those contact hours as necessary to provide the junior college the appropriate level of state support to the extent state funds for those courses are included in the appropriations. This subsection does not prohibit the legislature from directly appropriating state funds to support junior-level and senior-level courses to which this subsection applies.

SECTION 24. Section 130.352, Education Code, is amended to read as follows:

Sec. 130.352. FORMULA FUNDING FOR WORKFORCE CONTINUING EDUCATION COURSES. Notwithstanding Section 130.003 or any other law, contact hours attributable to the enrollment of a student in a workforce continuing education course offered by a public junior college shall be included in the contact hours used to determine the college's allocation [proportionate share] of state money appropriated and distributed to public junior colleges under this chapter and Chapter 130A [Sections 130.003 and 130.0031], regardless of whether the college waives all or part of the tuition or fees for the course under Section 130.354.

SECTION 25. Section 130.355, Education Code, is amended to read as follows:

Sec. 130.355. RULES. The coordinating board shall adopt any rules the coordinating board considers necessary for the administration of this subchapter. [In adopting those rules, the coordinating board shall use the negotiated rulemaking procedures under Chapter 2008, Government Code.]

SECTION 26. Subtitle G, Title 3, Education Code, is amended by adding Chapter 130A to read as follows:

CHAPTER 130A. PUBLIC JUNIOR COLLEGE STATE FINANCE PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 130A.001. LEGISLATIVE INTENT. It is the intent of the legislature that, as public junior colleges are locally governed institutions, providing foundational funding for instruction and operations of public junior colleges should be primarily a local responsibility, supported through a combination of tuition, fees, and local property taxes, with state funding focused primarily on rewarding outcomes aligned with regional and state education and workforce needs.

Sec. 130A.002. PURPOSE. The purpose of the public junior college state finance program established under this chapter is to provide a modern and dynamic finance system that ensures that each public junior college has access to adequate state appropriations and local resources to support the education and training of the workforce of the future.

Sec. 130A.003. DEFINITIONS. In this chapter:

(1) "Commissioner" means the commissioner of higher education.

(2) "Coordinating board" means the Texas Higher Education Coordinating Board.

(3) "Program" means the public junior college state finance program established under this chapter.

(4) "Public junior college" has the meaning assigned by Section 61.003.

Sec. 130A.004. PROGRAM COMPONENTS. The program consists of:

(1) a base tier of state and local funding determined in accordance with Subchapter B that ensures each public junior college has access to a defined level of base funding for instruction and operations; and

(2) a performance tier of state funding determined in accordance with Subchapter C that constitutes the majority of state funding and is distributed based on measurable outcomes aligned with:

(A) regional and state workforce needs; and

(B) state goals aligned to the state's long-range master plan for higher education developed under Section 61.051.

Sec. 130A.005. ADMINISTRATION OF PROGRAM. (a) The coordinating board may adopt rules, require reporting, and take other actions consistent with Chapter 61, Chapter 130, and this chapter as necessary to implement and administer the program.

(b) The coordinating board may adopt rules under this section in consultation with the advisory committee established under Section 130.001(b)(5).

(c) Notwithstanding Section 61.033, the coordinating board is not required to use negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of rules under this section.

Sec. 130A.006. REQUIRED REPORTING. The coordinating board by rule shall require each junior college district to report to the coordinating board through the Education Data System, Community College Annual Reporting and Analysis Tool, Report of Fundable Operating Expenses, or any successor program, data necessary to:

(1) calculate funding under this chapter;

(2) provide timely data and analyses to inform management decisions by the governing body of each junior college district;

(3) administer or evaluate the effectiveness of the program; or

(4) audit the program.

Sec. 130A.007. COMMISSIONER AUTHORITY TO RESOLVE DATA REPORTING ERRORS AND UNINTENDED CONSEQUENCES FROM FUNDING FORMULAS. (a) The commissioner may review the accuracy of data reported to the coordinating board by junior college districts.

(b) The commissioner may adjust:

(1) the distribution of funding under this chapter for a state fiscal year as necessary to correct errors in data reporting identified through the commissioner's review under Subsection (a); and

(2) a junior college district's funding under this chapter if the funding formulas used to determine the district's entitlement would result in an unanticipated loss or gain for the district that would have a substantial negative impact on the district's operations.

(c) Before making an adjustment under this section, the commissioner must request and receive written approval from the Legislative Budget Board and the office of the governor. A request to make an adjustment is considered approved unless the Legislative Budget Board or the office of the governor issues a written disapproval within 60 business days after the date on which the request is received.

(d) If the commissioner makes an adjustment under Subsection (b), the commissioner shall provide to the legislature an explanation regarding the changes necessary to resolve the data reporting errors or the unintended consequences, as applicable.

Sec. 130A.008. CENSUS DATE ELIGIBILITY. A junior college district may report a student in attendance on the district's approved course census date for the purpose of funding under this chapter.

Sec. 130A.009. RECOVERY OF OVERALLOCATED FUNDS. (a) If a junior college district has received an overallocation of state funds, the coordinating board shall recover from the district an amount equal to the overallocation by withholding from subsequent allocations of state funds for the current or subsequent academic year or by requesting and obtaining a refund from the district.

(b) Notwithstanding Subsection (a), the coordinating board may recover an overallocation of state funds over a period not to exceed the subsequent five academic years if the commissioner determines that the overallocation was the result of exceptional circumstances reasonably caused by statutory changes to Chapter 130 or this chapter and related reporting requirements.

(c) If a junior college district fails to comply with a request for a refund under Subsection (a), the coordinating board shall report to the comptroller that the amount constitutes a debt for purposes of Section 403.055, Government Code. The coordinating board shall provide to the comptroller the amount of the overallocation and any other information required by the comptroller. The comptroller may certify the amount of the debt to the attorney general for collection. The junior college district's governmental immunity is waived to the extent necessary to collect the debt owed under this section.

(d) Subject to Subsection (e), the coordinating board may review a junior college district as necessary to determine if the district qualifies for each amount received by the district under this chapter. If the coordinating board determines that a junior college district received an amount to which the district was not entitled, the coordinating board may establish a corrective action plan or withhold the applicable amount of funding from the district.

(e) The coordinating board may not review junior college district expenditures that occurred seven or more years before the review.

Sec. 130A.010. GIFTS, GRANTS, AND DONATIONS. Except as provided by other law, an affiliated nonprofit organization described by Section 61.051(b) may solicit and accept gifts, grants, or donations of personal property from any public or private source to implement or administer this chapter.

SUBCHAPTER B. STATE FUNDING: BASE TIER

Sec. 130A.051. BASE TIER FORMULA. The amount of base tier state funding to which a junior college district is entitled for instruction and operations under this subchapter for a state fiscal year is an amount equal to the amount, if any, by which the district's guaranteed instruction and operations funding, as determined under Section 130A.052, exceeds the district's local share of base tier funding, as determined under Section 130A.056.

Sec. 130A.052. GUARANTEED INSTRUCTION AND OPERATIONS FUNDING FORMULA. The amount of a junior college district's guaranteed instruction and operations funding for a state fiscal year is equal to the sum of:

(1) the product of:

(A) the district's basic allotment under Section 130A.053; and

(B) the number of weighted full-time equivalent students enrolled at the district determined in accordance with Section 130A.054; and

(2) the district's contact hour funding under Section 130A.055.

Sec. 130A.053. BASIC ALLOTMENT. The basic allotment for a junior college district for a state fiscal year is an amount per weighted full-time equivalent student set by the General Appropriations Act or other legislative appropriation.

Sec. 130A.054. WEIGHTED FULL-TIME EQUIVALENT STUDENT; SCALE ADJUSTMENT. (a) The coordinating board by rule shall establish student weights for purposes of this chapter that reflect the higher cost of educating certain students.

(b) The student weights must be established in a manner that results in appropriate funding to a junior college district for the education of a student enrolled in an eligible credit or non-credit program who is:

(1) 25 years of age or older;

(2) economically disadvantaged, as defined by coordinating board rule; or

(3) academically disadvantaged, as defined by coordinating board rule.

(c) Subject to Subsection (d), the number of weighted full-time equivalent students enrolled at a junior college district for purposes of this subchapter is equal to the sum of:

(1) the number of full-time equivalent students enrolled in the district; and

(2) the sum of the weights assigned to students enrolled in the district.

(d) The coordinating board by rule shall establish an equitable adjustment to the number of weighted full-time equivalent students determined under this section for each junior college district with a total enrollment of fewer than 5,000 full-time equivalent students.

(e) Not later than November 1 of each even-numbered year, a junior college district that receives an adjustment under Subsection (d) shall submit to the commissioner a report on the district's participation in institutional partnerships and shared services available under Section 61.0571 or other partnerships to reduce costs and improve operational efficiency.

Sec. 130A.055. CONTACT HOUR FUNDING. (a) The legislature shall set by appropriation the amount of funding to be provided to a junior college district under this subchapter per contact hour.

(b) The amount of funding per contact hour must be weighted by discipline to reflect the cost of providing the applicable course.

(c) The coordinating board shall determine the total amount of contact hour funding to which each junior college district is entitled under this section.

Sec. 130A.056. LOCAL SHARE. A junior college district's local share of base tier funding is an amount equal to the sum of the amounts of revenue estimated to be generated by:

(1) imposing a maintenance and operations ad valorem tax in the district at a rate of $0.05; and

(2) assessing an amount of tuition and fees to each full-time equivalent student enrolled in the district equal to the statewide average amount of tuition and fees assessed by junior college districts to a full-time equivalent student, determined as provided by coordinating board rule.

SUBCHAPTER C. STATE FUNDING: PERFORMANCE TIER

Sec. 130A.101. PERFORMANCE TIER. (a) A junior college district is entitled to performance tier funding for a state fiscal biennium in an amount equal to the sum of the amounts determined under Subsection (b) for each measurable outcome described by Subsection (c).

(b) The amount of performance tier funding for each measurable outcome described by Subsection (c) is equal to the product of:

(1) the sum of:

(A) the number of times that outcome was achieved by the junior college district, determined as provided by coordinating board rule; and

(B) for an outcome described by Subsection (c)(1) or (2), the sum of the applicable student weights established by coordinating board rule for the students who achieved the outcome at the junior college district as determined under Paragraph (A) of this subdivision; and

(2) the amount set by the General Appropriations Act or other legislative appropriation for the outcome.

(c) The measurable outcomes considered for purposes of performance tier funding are:

(1) the number of credentials of value awarded, as determined by the coordinating board based on analyses of wages and costs associated with the credential, including degrees, certificates, and other credentials from credit and non-credit programs that equip students for continued learning and greater earnings in the state economy, with an additional weight for placement of students who earn that credential in a high-demand occupation, as defined by coordinating board rule, or an appropriate proxy determined by the coordinating board based on available data;

(2) the number of students who earn at least 15 semester credit hours or the equivalent at the junior college district and:

(A) subsequently transfer to a general academic teaching institution, as that term is defined by Section 61.003; or

(B) are enrolled in a structured co-enrollment program, as defined by coordinating board rule; and

(3) the number of students who complete a sequence of at least 15 semester credit hours or the equivalent for dual credit courses that apply toward academic or workforce program requirements at the postsecondary level.

SECTION 27. Sections 61.0593, 61.884(d), and 130.003(d), Education Code, are repealed.

SECTION 28. Sections 28.009(b-2) and 28.010(a), Education Code, as amended by this Act, and Section 28.0095, Education Code, as added by this Act, apply beginning with the 2023-2024 school year.

SECTION 29. The Texas Higher Education Coordinating Board may identify rules required by the passage of Chapter 130A, Education Code, as added by this Act, that must be adopted on an emergency basis for purposes of the state fiscal year beginning September 1, 2023, and may use the procedures established under Section 2001.034, Government Code, for adopting those rules. The coordinating board is not required to make the finding described by Section 2001.034(a), Government Code, to adopt emergency rules under this section.

SECTION 30. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2023, and applies to the allocation of state funding to junior college districts beginning with the state fiscal biennium beginning September 1, 2023.

(b) Sections 28.009(b-2) and 28.010(a), Education Code, as amended by this Act, and Section 28.0095, Education Code, as added by this Act, take effect immediately if this Act 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, those provisions take effect September 1, 2023.