By: Seliger, Nelson S.B. No. 19

A BILL TO BE ENTITLED

AN ACT

relating to performance-based tuition limitations for and a temporary limitation on the amount of tuition and fees charged by certain public institutions of higher education.

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

SECTION 1. Subchapter B, Chapter 54, Education Code, is amended by adding Sections 54.05131 and 54.0514 to read as follows:

Sec. 54.05131. PERFORMANCE-BASED DESIGNATED TUITION LIMITATIONS. (a) In this section:

(1) "Administrative costs" means the percentage of an institution's operating budget expended on institutional expenses, as designated in an institution's annual financial reports in the subcategories of executive management, fiscal operations, general administrative and logistical services, administrative computing support, and public relations/development.

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

(3) "General academic teaching institution" and "public state college" have the meanings assigned by Section 61.003.

(4) "Performance measure" means a performance measure defined by coordinating board rule under Subsection (b).

(b) The coordinating board, using the negotiated rulemaking procedures under Chapter 2008, Government Code, shall define the following performance measures to be used for purposes of this section:

(1) the total number of undergraduate degrees awarded by the institution;

(2) the total number of undergraduate degrees awarded by the institution, adjusted by the institution's six-year graduation rate under Subdivision (10);

(3) the total number of undergraduate degrees awarded by the institution per 100 undergraduate full-time student equivalents;

(4) the total number of undergraduate degrees awarded by the institution to at-risk students;

(5) 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;

(6) 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;

(7) the total number of undergraduate students at the institution 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;

(8) the average length of a student's enrollment, by number of semesters, for undergraduate degree completion;

(9) the four-year graduation rate of first-time, full-time, bachelor's degree-seeking students who enrolled in at least 12 semester credit hours in the student's first fall semester at the institution and who graduated from the institution or from any other institution of higher education or private or independent institution of higher education;

(10) the six-year graduation rate of first-time, full-time, bachelor's degree-seeking students who enrolled in at least 12 semester credit hours in the student's first fall semester at the institution and who graduated from the institution or from any other institution of higher education or private or independent institution of higher education; and

(11) the institution's administrative costs.

(c) This section applies only to a general academic teaching institution other than a public state college.

(d) Not later than November 1 of each even-numbered year, the coordinating board shall:

(1) in consultation with the president of each institution to which this section applies, establish a target level for each performance measure applicable to the institution for each of the two next academic years to encourage the institution to achieve reasonable incremental progress toward appropriate long-term goals for performance in each performance measure, taking into account the mission, resources, and circumstances of the particular institution; and

(2) submit to the standing committee of each house of the legislature with primary jurisdiction over higher education and to each institution to which this section applies a report that includes the target levels established by the coordinating board under Subdivision (1) for each institution.

(e) The coordinating board, using the negotiated rulemaking procedures under Chapter 2008, Government Code, by rule shall develop standards to be considered by the coordinating board in establishing an institution's target levels for performance measures under Subsection (d). In developing the standards, the negotiated rulemaking committee established for purposes of this subsection and the coordinating board shall consider institutional improvement on target levels. The coordinating board shall reconvene the negotiated rulemaking committee to assist the coordinating board whenever the coordinating board modifies or updates the standards.

(f) In adopting rules under this section, the coordinating board shall prescribe any necessary adjustments or exceptions for institutions that offer only upper-division courses and to which certain performance measures prescribed by Subsection (b) do not apply.

(g) As soon as practicable after each academic year, the coordinating board shall determine whether an institution has achieved the applicable target levels for that academic year. Using the negotiated rulemaking procedures under Chapter 2008, Government Code, the coordinating board by rule shall establish the process by which an institution's achievement on a performance measure is submitted to and verified by the coordinating board.

(h) After the coordinating board makes a determination for an institution under Subsection (g), the coordinating board shall notify the governing board of the institution that Subsection (i) or (j), as applicable, applies to the tuition charged by the institution for the second academic year following the academic year for which the determination is made and of the limitation prescribed by the applicable subsection on the amount of tuition that may be charged by the institution for that academic year.

(i) This subsection applies to tuition charged for an academic year by an institution to which this section applies only if the institution did not achieve, in the second academic year preceding that academic year, the target level assigned by the coordinating board for the administrative costs performance measure as applicable to the institution for that preceding academic year and a majority of the target levels assigned to the remaining performance measures by the coordinating board as applicable to the institution for that preceding academic year. For an academic year in which this subsection applies to the tuition charged by an institution, unless the institution has been granted an exception under Subsection (m) for that year, the amount of tuition the governing board of the institution charges under Section 54.0513 to a student for that academic year may not exceed the total amount of tuition that the governing board would have charged under that section to a similarly situated student in the preceding academic year, as that amount is adjusted for each academic year for inflation as determined under Subsection (l). The governing board may not increase the amount of tuition charged under this subsection to a student more than once in any academic year.

(j) This subsection applies to tuition charged for an academic year by an institution to which this section applies only if the institution achieved, in the second academic year preceding that academic year, the target level assigned by the coordinating board for the administrative costs performance measure as applicable to the institution for that preceding academic year and a majority of the target levels assigned to the remaining performance measures by the coordinating board as applicable to the institution for that preceding academic year. For an academic year in which this subsection applies to the tuition charged by an institution, the amount of tuition the governing board of the institution charges under Section 54.0513 to a student for that academic year may not exceed by more than one percent the total amount of tuition that the governing board would have charged under that section to a similarly situated student in the preceding academic year, as that amount is adjusted for each academic year for inflation as determined under Subsection (l). The governing board may not increase the amount of tuition charged under this subsection to a student more than once in any academic year.

(k) For purposes of this section:

(1) an institution is considered to have achieved a target level assigned to a performance measure if the institution has achieved at least 98 percent of the target level; and

(2) 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 tuition charged to the student.

(l) Not later than August 31 of each year, or as soon thereafter as practicable, the Legislative Budget Board shall publish and certify to the governing board of each institution to which this section applies the inflation rate to be used for purposes of this section for the next academic year. The inflation rate is the percentage increase, if any, as expressed in decimal form rounded to the nearest thousandth of one percent, in the consumer price index, as defined by Section 341.201, Finance Code, for the preceding 12-month period as compared to the consumer price index for the 12-month period preceding that period.

(m) The coordinating board, using the negotiated rulemaking procedures under Chapter 2008, Government Code, by rule shall establish an exception to the application of Subsection (i) for an institution to which that subsection would otherwise apply for an academic year in the event of a natural disaster or other extraordinary circumstance affecting the institution's achievement on performance measures. In an academic year for which an institution is granted an exception under this subsection, Subsection (j) applies to the institution.

Sec. 54.0514. TEMPORARY LIMITATION ON TOTAL AMOUNT OF TUITION. (a) In this section:

(1) "General academic teaching institution" has the meaning assigned by Section 61.003.

(2) "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 an institution to establish tuition rates.

(b) Notwithstanding Section 54.0513 or another law authorizing an institution to establish tuition rates, the total amount of tuition charged by a general academic teaching institution to a student for the 2018-2019 or 2019-2020 academic year may not exceed the total amount of tuition that the institution would have charged under this chapter to a similarly situated student for the 2016-2017 academic year.

(c) 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 tuition charged to the student.

(d) This section does not ensure that the total amount of tuition charged to an individual student does not increase based on a change in the student's residency status, degree program, course load, course level, tuition exemption status, or other circumstance affecting the tuition charged to the student.

(e) The Texas Higher Education Coordinating Board may adopt rules as necessary to administer this section.

(f) This section expires August 31, 2020.

SECTION 2. Subchapter E, Chapter 54, Education Code, is amended by adding Section 54.5001 to read as follows:

Sec. 54.5001. TEMPORARY LIMITATIONS ON FEE INCREASES. (a) In this section, "general academic teaching institution" has the meaning assigned by Section 61.003.

(b) Notwithstanding any other provision of this subchapter or other law, in each of the 2018-2019 and 2019-2020 academic years, the governing board of a general academic teaching institution may not charge a fee under this subchapter in an amount that is greater than the amount of the fee charged by the institution in the 2016-2017 academic year.

(c) The limitation provided by this section applies to a fee even if an increase in the amount of the fee is approved by a vote of the students, student government, or student fee advisory committee of the general academic teaching institution.

(d) This section expires August 31, 2020.

SECTION 3. Section 54.05131, Education Code, as added by this Act, applies beginning with tuition charged by a general academic teaching institution to which that section applies for the 2020-2021 academic year.

SECTION 4. 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, 2017.