By: Zaffirini S.B. No. 22

A BILL TO BE ENTITLED

AN ACT

relating to outcomes-based funding for general academic teaching institutions.

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

SECTION 1. Subchapter D, Chapter 62, Education Code, is amended to read as follows:

SUBCHAPTER D. OUTCOMES-BASED FUNDING FOR GENERAL ACADEMIC

TEACHING INSTITUTIONS [PERFORMANCE INCENTIVE FUNDING]

Sec. 62.071. DEFINITIONS. In this subchapter:

(1) "At-risk student" means an undergraduate student of an eligible institution:

(A) whose score on the Scholastic Assessment Test (SAT) or the American College Test (ACT) is less than the national mean score of students' scores on that test;

(B) who has been awarded a grant under the federal Pell Grant program;

(C) who was 20 years of age or older on the date the student initially enrolled in the institution;

(D) who is enrolled as a part-time student; or

(E) who did not receive a high school diploma but received a high school equivalency certificate [within the last six years].

(2) ["Critical field" means:

[(A) the field of engineering, computer science, mathematics, physical science, allied health, nursing, or teacher certification in a field of science or mathematics; and

[(B) any other field of study identified as a critical field by the coordinating board in "Closing the Gaps," the state's master plan for higher education.

[(3) "Eligible institution" means a general academic teaching institution other than a public state college.

[(4)] "General academic teaching institution" has [and "public state college" have] the meaning [meanings] assigned by Section 61.003.

Sec. 62.072. BIENNIAL DISTRIBUTION OF FUNDS TO GENERAL ACADEMIC TEACHING INSTITUTIONS BASED ON OUTCOMES METRICS POINTS. (a) Except as provided by Section 62.073, for each state fiscal biennium, the coordinating board shall distribute any funds appropriated to the coordinating board by the legislature for the purposes of this subchapter, and any other funds made available for the purposes of this subchapter, to general academic teaching institutions in proportion to each institution's percentage of the total number of outcomes metrics points assigned to all general academic teaching institutions under Section 62.074 for that state fiscal biennium.

(b) Notwithstanding Subsection (a), for the state fiscal biennium ending August 31, 2017, the percentage share of outcomes-based funding allocated to a general academic teaching institution under that subsection may not be less than 99.5 percent of the percentage share of instruction and operations funding under Section 61.059 appropriated to all general academic teaching institutions for undergraduate education for that biennium that is allocated to the institution. The coordinating board may adjust in an equitable manner the distribution amounts to which institutions would otherwise be entitled under Subsection (a) as necessary to comply with this subsection. This subsection expires September 1, 2017.

(c) Notwithstanding Subsection (a), for the state fiscal biennium ending August 31, 2019, the percentage share of outcomes-based funding allocated to a general academic teaching institution under that subsection may not be less than 99 percent of the percentage share of instruction and operations funding under Section 61.059 appropriated to all general academic teaching institutions for undergraduate education for that biennium that is allocated to the institution. The coordinating board may adjust in an equitable manner the distribution amounts to which institutions would otherwise be entitled under Subsection (a) as necessary to comply with this subsection. This subsection expires September 1, 2019. [FUNDING. (a) For each state fiscal year, the coordinating board shall distribute any performance incentive funds appropriated by the legislature for purposes of this subchapter, and any other funds made available for the purposes of this subchapter, to eligible institutions as follows:

[(1) 50 percent to be distributed among eligible institutions in proportion to the increase, if any, in the average number of degrees awarded annually by each institution in the two most recent fiscal years from the average number of degrees awarded annually by that institution in the two fiscal years immediately preceding those fiscal years, using the weights assigned to each degree under the table prescribed by Subsection (b); and

[(2) the remaining 50 percent to be distributed among eligible institutions in proportion to the average number of degrees awarded annually by each institution in the three most recent fiscal years, using the weights assigned to each degree under the table prescribed by Subsection (b).

[(b) A number of points is assigned for each degree awarded by an eligible institution according to the following table:

[POINTS [Noncritical Field/Not At-Risk Student 1.0 [Noncritical Field/At-Risk Student 2.0 [Critical Field/Not At-Risk Student 2.0 [Critical Field/At-Risk Student 3.0]

Sec. 62.073. DISTRIBUTION OF FUNDS CONTINGENT ON FULL FUNDING OF BASE FORMULA FUNDING. Funds may be distributed under this subchapter for a state fiscal biennium only if the instruction and operations formula for all general academic teaching institutions for undergraduate education under Section 61.059 is funded by appropriation for that biennium at a level, per weighted semester credit hour, that is equal to or greater than the level at which that formula was funded by appropriation for all general academic teaching institutions in the preceding state fiscal biennium, as that level is adjusted for inflation.

Sec. 62.074. OUTCOMES METRICS POINTS; COMPUTATION METHODOLOGY. (a) For each state fiscal biennium, scaled points are assigned to each general academic teaching institution for each of the following outcomes-based metrics, computed as follows:

(1) Total Number of Undergraduate Degrees--the total number of undergraduate degrees awarded by the institution, including degrees awarded to students who transferred to the institution;

(2) Total Number of Undergraduate Degrees Adjusted By Graduation Rate--the total number of undergraduate degrees awarded to students by the institution, or awarded by another institution to a student who completed at least 50 percent of the student's degree requirements as a first-time, full-time student at the institution, multiplied by the institution's three-year graduation rate for undergraduates, if the institution is a public state college, or by the institution's six-year graduation rate for undergraduates, if the institution is not a public state college, the product of which is multiplied by 7;

(3) Total Number of Undergraduate Degrees Per 100 Undergraduate Full-time Student Equivalents--the total number of undergraduate degrees awarded by the institution divided by the number of full-time undergraduate student equivalents enrolled in the fall semester, as reported in the coordinating board's higher education accountability system, the quotient of which is multiplied by 100, and the product of which is multiplied by 25;

(4) Total Number of Undergraduate Degrees Awarded To At-risk Students--the total number of undergraduate degrees awarded by the institution to at-risk students, multiplied by 7;

(5) 25 Percent Degree Completion--the total number of undergraduate students at the institution having successfully completed at least 25 percent of the student's degree requirements or having earned at least 30 credit hours toward a 120-credit-hour degree, including hours earned toward the degree at another institution before transferring to the institution, multiplied by 1.5;

(6) 50 Percent Degree Completion--the total number of undergraduate students at the institution having successfully completed at least 50 percent of the student's degree requirements or having earned at least 60 credit hours toward a 120-credit-hour degree, including hours earned toward the degree at another institution before transferring to the institution, multiplied by 2.5; and

(7) 75 Percent Degree Completion--the total number of undergraduate students having successfully completed at least 75 percent of the student's degree requirements or having earned at least 90 credit hours toward a 120-credit-hour degree, including hours earned toward the degree at another institution before transferring to the institution, multiplied by 4.

(b) For each state fiscal biennium, each metric prescribed by Subsection (a) is computed using the average of the applicable variables for the three most recent academic years for which the information is available, as determined on the January 1 preceding the biennium.

(c) Each state fiscal biennium, a general academic teaching institution shall compute the institution's scaled points on each of the metrics under Subsection (a). After computing its scaled points for each of the metrics, the institution shall assign one of the following percentage weights to each of the metrics' scaled points:

(1) 25 percent;

(2) 25 percent;

(3) 20 percent;

(4) 15 percent;

(5) 10 percent;

(6) five percent; and

(7) zero percent.

(d) In assigning the percentage weights under Subsection (c), a general academic teaching institution:

(1) shall prioritize the metrics the institution considers most advantageous to maximizing the institution's total number of points under this section; and

(2) may not assign the zero percentage to the Total Undergraduate Degrees Awarded To At-risk Students metric.

(e) After assigning the percentage weights to its metrics under Subsection (c), a general academic teaching institution shall multiply the scaled points for each of its metrics by the applicable percentage weight to determine its weighted total points for each metric. The institution's total number of outcomes metrics points under this section is the sum of the institution's weighted total points for all metrics.

(f) Notwithstanding Subsection (c) , in the two state fiscal bienniums following the initial state fiscal biennium for which percentage weights are assigned under Subsection (c), a general academic teaching institution must assign the same percentage weight to each metric as was assigned by the institution under Subsection (c) in the initial biennium.

Sec. 62.075. COORDINATING BOARD MONITORING; REPORTING. The coordinating board shall monitor and evaluate the equity and effectiveness of outcomes-based funding under this subchapter and report its results, including relevant details and recommendations for legislative action, to each legislative standing committee or subcommittee with primary jurisdiction over higher education not later than October 1 of each even-numbered year. The coordinating board's report must include any recommendations for refining the definition of "at-risk students" under Section 62.071.

Sec. 62.076. RULES. The coordinating board shall adopt rules for the administration of this subchapter, including any rules the coordinating board considers necessary regarding:

(1) standardization of the computation of metrics under Section 62.074; and

(2) the submission to the coordinating board by general academic teaching [eligible] institutions of any information [student data] required for the coordinating board to carry out its duties under this subchapter.

SECTION 2. 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, 2015.