85R22993 KSD-D
	By: Giddings, Johnson of Harris	H.B. No. 1241
	Substitute the following for H.B. No. 1241:
	By:  Lozano	C.S.H.B. No. 1241

	A BILL TO BE ENTITLED
	AN ACT
	relating to student success-based funding recommendations for
	certain public institutions of higher education.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 61.0593(a), Education Code, is amended
	to read as follows:
	(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 the number of degrees awarded [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.
	SECTION 2.  Section 61.0593(b)(1), Education Code, is
	amended to read as follows:
	(1)  "At-risk student" means an undergraduate student
	of an institution of higher education:
	(A)  who has previously received [been awarded] a
	grant under the federal Pell Grant program or met the Expected
	Family Contribution (EFC) criterion for a grant under that program;
	or
	(B)  whose [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 SAT [Scholastic
	Assessment Test (SAT)] or the ACT, excluding the optional essay
	test, is [American College Test (ACT) that was] less than the
	national mean of students' scores on the applicable [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].
	SECTION 3.  Section 61.0593, Education Code, is amended by
	amending Subsection (d) and adding Subsections (d-1), (d-2), and
	(d-3) to read as follows:
	(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 prescribe a formula for allocating funds to the institutions
	in proportion to the number of weighted points earned by each of the
	institutions according to the following success measures
	[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 to not at-risk students; and
	(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].
	(d-1)  In the formula prescribed under Subsection (d), the
	board shall:
	(1)  compute points for each success measure using the
	average number of degrees awarded for the three most recent
	academic years for which the information is available; and
	(2)  assign the following weights to each degree
	awarded by an institution to which that subsection applies:
	(A)  1.0, for a not at-risk student; and
	(B)  2.0, for an at-risk student.
	(d-2)  The board's recommendations under Subsection (d) must
	provide and compare the alternative approaches of applying the
	success measures described by that subsection within the formula
	for base funding and applying the success measures described by
	that subsection outside the formula for base funding.
	(d-3)  At the time the board makes its recommendations under
	Subsection (d) for institutions to which that subsection applies,
	the board shall also make recommendations for incorporating the
	success measures described by that subsection, 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.
	SECTION 4.  Sections 61.0593(b)(2), (c), and (e), Education
	Code, are repealed.
	SECTION 5.  The Texas Higher Education Coordinating Board
	shall adopt rules for the administration of Section 61.0593,
	Education Code, as amended by this Act, not later than May 1, 2018.
	SECTION 6.  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.