Proposed Rules Title 19

TITLE 19. EDUCATION

PART 1. TEXAS HIGHER EDUCATION COORDINATING BOARD

CHAPTER 2. ACADEMIC AND WORKFORCE EDUCATION

SUBCHAPTER I. REVIEW OF EXISTING DEGREE PROGRAMS

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to Texas Administrative Code, Title 19, Part 1, Chapter 2, Subchapter I, §2.181 and §2.182, concerning review of existing degree programs at public universities and public health-related institutions. Specifically, the amendments streamline graduate program review by eliminating duplicative reporting criteria. The amendments require Board staff to deliver an annual update on all new doctoral programs that are within the five-year post-implementation reporting period and provides the Board with authority to extent the reporting period beyond five years. The amendments authorize the Commissioner to grant an extension to the reporting deadline for institutions that demonstrate good cause.

Rule 2.181, Academic Programs at Public Universities and Public Health-Related Institutions, amendments remove duplicative language regarding reporting deadlines and requirements for existing graduate degree programs. Revisions include removing (10) which requires an institution to submit a graduate program review to the Coordinating Board no later than 180 days after receiving an evaluative report from an external review team and (11) which allows institutions to satisfy Coordinating Board graduate program reporting requirements by submitting reviews conducted for programmatic accreditation. These requirements are included in (8) of this section.

Rule 2.182, Doctoral and Professional Degree Programs, amendments add language requiring Board staff to submit annual reports to the Board on the progress of all new doctoral programs that are within the five-year post-implementation reporting period. The amendments give the Board authority to extend annual reporting requirements for new doctoral programs and provide the Commissioner with authority to extend an institution's reporting deadline.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section is improved administrability of the Coordinating Board's existing program review processes. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

Comments on the proposal may be submitted to Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, P.O. Box 12788, Austin, Texas 78711-2788, or via email at AHAcomments@highered.texas.gov. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendment is proposed under Texas Education Code, Section 61.002, which directs the Coordinating Board to coordinate higher education through efficient and effective use of resources and elimination of costly program duplication, and Section 61.0512(e), which requires the Coordinating Board to conduct reviews of programs at least every ten years after the program's establishment.

The proposed amendments affect Texas Education Code Sections 61.002 and 61.0512(e).

§2.181.Academic Programs at Public Universities and Public Health-Related Institutions.

(a) Each public institution of higher education, in accordance with the requirements of the institution's approved accreditor, shall have a process to review the quality and effectiveness of existing degree programs and for continuous improvement.

(b) Board staff [~~Staff~~] shall develop a process for conducting a periodic audit of the quality, productivity, and effectiveness of each existing master's, doctoral, and professional degree program at a public institution of higher education.

(c) Board staff [~~Staff~~] will meet the requirements of program review established by Texas Education Code, [~~Tex. Educ. Code~~] §61.0512(e), by reviewing program data reported in the Accountability System for each undergraduate degree offered by a public institution of higher education in Texas.

(d) Each public university and public health-related institution shall review each of its master's, doctoral and professional degree programs at least once every ten (10) years.

(1) On a schedule to be determined by the Commissioner, each institution [~~institutions~~] shall submit a schedule of review for each [~~all~~] graduate program [~~programs~~] to the Assistant Commissioner with oversight of academic program approval.

(2) Each institution shall begin each review of a graduate degree program with a rigorous self-study.

(3) As part of the required review process, an institution shall use at least two external reviewers with subject-matter expertise who are employed by institutions of higher education outside of Texas. Each institution shall provide its external [~~External~~] reviewers [~~must be provided~~] with the materials and products of the self-study and must participate in a site review.

(4) Each external reviewer shall [~~External reviewers must~~] be part of a program that is nationally recognized for excellence in the discipline.

(5) Each external reviewer shall [~~External reviewers must~~] affirm that they have no conflict of interest related to the Board, the institution, or program under review.

(6) Each institution may review a closely-related program [~~Closely-related programs~~], defined as sharing the same four-digit Classification of Instructional Programs code, [~~may be reviewed~~] in a consolidated manner at the discretion of the institution.

(7) Each institution [~~Institutions~~] shall review a master's and doctoral program [~~programs~~] in the same discipline simultaneously, using the same self-study materials and reviewers. Each institution [~~Institutions~~ ] may also, at their discretion, review a baccalaureate program [~~programs~~] in the same discipline as master's and doctoral programs simultaneously.

(8) Each institution [~~Institutions~~] shall submit a report on the outcomes of each review, including the evaluation of the external reviewers and actions the institution has taken or will take to improve the program, and shall deliver these reports to Board staff [~~Staff~~] no later than 180 days after the reviewers have submitted their findings to the institution.

(9) Each institution [~~Institutions~~] may submit a review [~~reviews~~] of a master's, doctoral, or [~~and~~] professional program [~~programs~~] performed for reasons of programmatic licensure or accreditation in satisfaction of the review and reporting requirements in this subsection.

[(10) Each institution shall submit a report of the outcomes of each review, including the evaluation of the external reviewer(s) and actions the institution has taken or will take to improve the program, and shall deliver these reports to the Assistant Commissioner with oversight of academic approval not later than 180 days after the reviewer(s) have submitted their findings to the institution.]

[(11) Each institution may submit reviews of graduate programs performed for reasons of programmatic licensure or accreditation in satisfaction of the review and reporting requirements in this subsection.]

(e) Board staff [~~Staff~~] shall review all reports submitted for a master's, doctoral, or professional degree program and shall conduct analysis as necessary to ensure high quality. The Commissioner may require an institution to take additional actions to improve its program as a result of Coordinating Board review.

§2.182.Doctoral and Professional Degree Programs.

(a) Board staff [~~Staff~~] shall monitor a new doctoral or professional degree program for a period of five (5) years following implementation of the program to ensure the institution has satisfied [~~that~~] any condition [~~conditions~~] of approval stipulated by the Board [~~have been satisfied~~] by the end of that period.

(b) The institution shall describe progress toward satisfaction of any condition [~~conditions~~] of approval to Board staff [~~Staff~~] in the new doctoral and professional program's annual reports to the Board.

(c) Board staff shall annually provide an update to the Commissioner and Board on the implementation status of approved doctoral and professional programs until the program has successfully completed the five-year progress monitoring period.

(d) [~~(c)~~] Board staff [~~Staff~~] shall not require a new doctoral or professional degree program that adequately satisfied all conditions of approval during the first five (5) years following program implementation to submit further annual reports unless directed to do so by the Commissioner or the Board.

(e) [~~(d)~~] The Commissioner may require any reporting necessary to determine whether the program remains in compliance with the terms of its program approval or these rules.

(f) The Commissioner may at his or her discretion grant a written extension of time to provide a report under this section if an institution demonstrates good cause.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402222

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6182

SUBCHAPTER P. APPROVAL PROCESS FOR OFF-CAMPUS COURSES, CERTIFICATES, AND DEGREE PROGRAMS

19 TAC §§2.380 - 2.393

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new rules in Texas Administrative Code, Title 19, Part 1, Chapter 2, Subchapter P, §§2.380 - 2.393, concerning approval of off-campus programs and courses. Specifically, this new section will establish updated procedures for approval of off-campus educational sites, courses, certificates and degree programs. These proposed rules will replace existing rules related to off-campus education in Chapter 4, Subchapter Q, which will be repealed in future rulemaking.

There are several significant changes related to how the Coordinating Board approves off-campus education in the proposed rules, compared to the existing rules. The first significant change is the removal of the Higher Education Regional Councils (HERCs) from the review process for off-campus courses and programs. While the HERCs provide a unique space to encourage collaboration across regions, the HERC role is an advisory committee and does not have statutory authority for participation in the approval of programs. It is the Coordinating Board's intent not to dissolve the HERCs but work with institutions of higher education to reimagine the role of the HERCs to provide consultation and feedback on key policy areas of the state higher education landscape. The Coordinating Board will develop a new role for the HERCs in a future rulemaking with stakeholder feedback.

The second change is the requirement that an institution notify the Coordinating Board of any new off-campus educational site where the institution will offer courses, certificates, or less than fifty (50) percent of a new degree program. Once the institution has notified the Coordinating Board of the site, the institution may offer courses, certificates, or less than fifty (50) percent of a degree program at that site without additional notification to the Coordinating Board or other institutions. This reduces the notification and approval burden for institutions, while still allowing the Coordinating Board to ensure it has a record of all off-campus sites to ensure compliance with federal requests related to student financial aid.

Once an institution plans to offer fifty (50) percent or more of an existing degree program or a proposed new degree program at an off-campus educational site, the institution must seek approval from the Coordinating Board as outlined in the rules. Prior to approving delivery of a new or existing off-campus degree program, the Coordinating Board will send a notice to all regions where the degree program will be delivered. This process streamlines the submission of off-campus degree program requests, especially for community colleges, but still allows the Coordinating Board to consider comments related to unnecessary duplication in the approval process.

Rule 2.380, Purpose, establishes the purpose of the subchapter, to provide rules and regulations for public Institutions of higher education delivering self-supporting programs.

Rule 2.381, Authority, contains the legal authority for Chapter 2, Subchapter P, which is contained in Texas Education Code, §§61.0512(g) and 51.661.

Rule 2.382, Applicability, identifies for which types of courses and credentials these rules apply.

Rule 2.383, Definitions, provides definitions specific to off-campus education and includes types of off-campus educational sites also found in Chapter 5, Subchapter D, §5.73.

Rule 2.384, Standards and Criteria for Delivery of Off-Campus Education, modifies existing standards and criteria from Chapter 4, Subchapter Q, to simplify and align only with off-campus education.

Rule 2.385, Approval Required for A New Off-Campus Educational Site, provides steps required to notify the Coordinating Board of a new off-campus educational site where off-campus education will be delivered.

Rule 2.386, Discontinuation of An Off-Campus Educational Site, provides steps to notify the Coordinating Board of closure of an off-campus educational site.

Rule 2.387, Approval Required for A New Degree Program Offered at An Off-Campus Educational Site, outlines steps to request approval of off-campus delivery within new degree program requests. This process already exists in new degree program approval required documents.

Rule 2.388, Approval Required for An Existing Degree Program Offered at An Off-Campus Educational Site, outlines steps to request delivery of a previously approved degree program at an off-campus location if fifty (50) percent or more of the degree program will be delivered at that site. Courses, certificates and degree programs with less than fifty (50) percent of the program delivered at an off-campus educational site do not require approval prior to delivery.

Rule 2.389, Approval Required for Off-Campus Education in the Texas State Technical College System, clarifies that Texas State Technical College System must adhere to additional guidelines as required in Chapter 11.

Rule 2.390, Modifications and Phase Out of Off-Campus Degree Programs, outlines steps for institution to modify or phase out an existing degree program offered at an off-campus educational site.

Rule 2.391, Notification Required for Off-Campus Clinical Courses, outlines the process for institutions to notify the Coordinating Board of off-campus clinical courses.

Rule 2.392, Approval Required and Criteria for Off-Campus Programs Outside the State of Texas, outlines the approval required for courses and programs offered outside the state of Texas such as study abroad courses.

Rule 2.393, Approval of Employer-Requested Off-Campus Career and Technical Education Programs, outlines the steps required for approval of courses and programs requested by an employer in accordance with Texas Education Code, §51.981

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the subchapter will be simplification of the approval and reporting requirements for institutions while ensuring compliance with state and federal regulations. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

The new sections are proposed under Texas Education Code §61.,0512(g), which states that institutions may offer off-campus credit courses only with prior approval from the Coordinating Board and Texas Education Code, §51.661, which authorizes the Coordinating Board to adopt state uniform service regions for Higher Education.

The proposed new sections affect Texas Education Code, §61.0512(g) and §51.661.

§2.380.Purpose.

This subchapter establishes rules for an institution of higher education governing the approval and delivery of credit courses, certificate programs, and degree programs offered at an off-campus educational site.

§2.381.Authority.

Authority for this subchapter is Texas Education Code, §61.0512(g), which states that an institution may offer off-campus credit courses only with prior approval from the Coordinating Board. Texas Education Code, §51.661, authorizes the Board to adopt state uniform service regions for higher education.

§2.382.Applicability.

(a) This subchapter applies to any institution of higher education seeking approval to offer a formula-funded or self-supporting for credit course, certificate, or degree program at an off-campus educational site, as defined in §2.383(8) of this subchapter (relating to Definitions).

(b) This subchapter does not apply to the following certificate types offered by a public junior college or technical college, as defined in Texas Education Code, §§61.003(2) and (16):

(1) Enhanced Skills Certificate;

(2) Advanced Technical Certificate;

(3) Occupational Skills Award;

(4) Institution Credential for Licensure or Credentialing; or

(5) Third-party credential offered by a public community or technical college at an off-campus educational site.

§2.383.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Community College Service Area--The territory served by a community college district as defined in Texas Education Code, §130.161.

(2) Extension Program--For Texas State Technical Colleges, as defined in §11.3(6) of this title (relating to Definitions), credit and non-credit instruction in technical and vocational education offered at an extension center.

(3) Higher Education Region--The Board adopts the economic regions of this state as defined by the Texas Comptroller of Public Accounts as the higher education state uniform service regions as set out in §2.3 of this chapter (relating to Definitions).

(4) Memorandum of Understanding (MOU)--Formal Agreement between two or more institutions of higher education that define their roles in the establishment and operation of a multi-institutional teaching center. One or more private institutions may be included in the memorandum of understanding.

(5) Off-Campus Clinical Site--An off-campus educational site in which students engage in work-based learning experiences for medical, nursing, allied health, and other health-related programs.

(6) Off-Campus Degree Program--A degree program that delivers fifty (50) percent or more of required instruction or coursework in-person at an off-campus educational site.

(7) Off-Campus Education--A course, certificate, or degree program offered at an off-campus educational site.

(8) Off-Campus Educational Site--A location where an institution delivers required instruction for a credit-bearing course, certificate, or degree program in person. For a public university, health-related institution, or a Lamar state college, an off-campus educational site is any location outside the parent institution. For a community college (public junior college), an off-campus educational site is a site outside the public junior college service area. An off-campus educational site includes, but is not limited to:

(A) Branch Campus--For a university, a major, secondary location of an institution offering multiple programs usually with its own administrative structure and usually headed by a dean. A branch campus must be established by the Legislature or approved by the Board. A junior college branch campus is approved and operated in accordance with Texas Education Code, chapter 130, subchapter K, and Board rules.

(B) Extension Center--For Texas State Technical College, as defined in §11.3(5), a site, operating under the administration of a campus, that has an extension program.

(C) Multi-Institution Teaching Center (MITC)--For a university, an off-campus educational unit administered under a memorandum of understanding (MOU) between two or more institutions of higher education. It may also involve one or more private or independent institution of higher education. It has minimal administration and locally provided facilities.

(D) Regional Academic Health Center (RAHC)--A special purpose campus of a parent health-related institution(s) that may be used to provide undergraduate clinical education, graduate education, including a residency training program, or other level of medical education in specifically identified counties.

(E) Single institution center--An off-campus educational unit administered by a single parent institution. It has minimal administration and locally provided facilities.

(F) Special Purpose Campus--A major, secondary location of an institution offering programs related to specific and limited field(s) of study, usually with its own administrative structure and usually headed by a dean. Regional Academic Health Centers are considered special-purpose campuses. Special Purpose Campuses must be established by the Legislature or approved by the Board.

(G) University System Center (USC)--An off-campus educational unit administered by a single university system comprised of two or more of the system's parent institutions. A memorandum of understanding must be established between all parties that governs the operations of the USC. It has minimal administration and locally provided facilities.

(9) Off-Campus Student--A regularly enrolled student who is admitted to an institution and fifty (50) percent or more of the student's instruction is delivered in person at an off-campus location.

(10) On-Campus Student--A regularly enrolled student who is admitted to an institution and fifty (50) percent or more of instruction is delivered at an institution's main campus or on one or more of the campuses within a multi-campus public junior college.

(11) Parent Institution--The primary campus or campuses of an institution of higher education providing courses, certificates, and degree programs at an off-campus educational site.

(12) Study-Abroad Courses--Off-campus, academic credit instruction delivered outside the United States primarily to on-campus students. Study-Abroad Courses receive formula funding.

(13) Study-In-America Courses--Off-campus, academic credit instruction delivered outside Texas but in the United States primarily to on-campus students. Study-in-America Courses receive formula funding.

§2.384.Standards and Criteria for Delivery of Off-Campus Education.

A Texas institution of higher education providing off-campus education shall:

(1) Comply with the standards, criteria, and approval requirements of one of the Coordinating Board recognized regional accrediting organizations as defined in §4.192 of this title (relating to Recognized Accrediting Agencies);

(2) Ensure each instructional site for an off-campus program be of sufficient quality for the programs and courses offered;

(3) Provide each student with equivalent academic support services as a student enrolled in an on-campus course or program;

(4) Ensure students in an off-campus course or program satisfies equivalent institutional enrollment requirements as an on-campus student; and

(5) Select and evaluate faculty by equivalent standards, review, and approval procedures used by the institution to select and evaluate faculty responsible for on-campus courses and programs.

§2.385.Approval Required for A New Off-Campus Educational Site.

(a) Prior to delivery of a course, certificate, or less than fifty (50) percent of a degree program at a new off-campus educational site, each public institution of higher education shall notify the Coordinating Board of the new off-campus educational site.

(1) In the notification to the Coordinating Board, each institution shall provide the name and address of the off-campus educational site and shall certify compliance with Standards and Criteria for Delivery of Off-Campus Education as defined in §2.384 of this subchapter (relating to Standards and Criteria for Delivery of Off-Campus Education).

(2) For a new off-campus program offered at a new off-campus educational site, the institution shall provide notification of the off-campus educational site in the request for the new degree program as outlined in §2.387 of this subchapter (relating to Approval Required for A New Degree Program Offered at An Off-Campus Educational Site).

(3) A new off-campus educational site is subject to Notification Only approval as outlined in §2.4(1) of this chapter (relating to Types of Approval Required).

(b) This subchapter does not apply to a course offered as a dual credit course to a high school student pursuant to chapter 4, subchapter D (relating to Dual Credit Partnerships Between Secondary Schools and Public Colleges).

(c) In addition to the approval required under this subchapter, Texas State Technical College shall comply with Texas Education Code, chapter 135 and chapter 11.

§2.386.Discontinuation of An Off-Campus Educational Site.

Discontinuation of an off-campus educational site is subject to Notification Only approval as outlined in §2.4(1) of this chapter (relating to Types of Approval Required).

§2.387.Approval Required for A New Degree Program Offered at An Off-Campus Educational Site.

(a) An institution of higher education shall obtain Coordinating Board approval to offer a new degree program at an off-campus educational site in its request for a new degree program if fifty (50) percent or more of the degree program will be delivered at the off-campus educational site. To request delivery of the off-campus degree program an institution shall:

(1) Provide the name and address of the off-campus educational site(s) where the program will be delivered in the new degree proposal form provided by the Coordinating Board.

(2) Certify that the institution is in compliance with the standards and criteria as set out in §2.384 of this subchapter (relating to Standards and Criteria for Delivery of Off-Campus Education).

(b) The Coordinating Board shall provide an informal notice and comment to institutions in the higher education region(s) where the off-campus degree program will be delivered as outlined in §2.7 of this chapter (relating to Informal Notice and Comment on Proposed Local Programs).

(c) A request for a new degree program offered at an off-campus educational site is subject to the designated approval required for the degree level as set out in subchapters D - G of this chapter (relating to Approval Process for New Associate Degrees, Approval Process for New Baccalaureate Programs at Public Junior Colleges, Approval Process for New Baccalaureate And Master's Degree Programs at Public Universities and Public Health-Related Institutions, and Approval Process for New Doctoral and Professional Degree Programs, respectively).

§2.388.Approval Required for An Existing Degree Program Offered at An Off-Campus Educational Site.

(a) Prior to delivery of fifty (50) percent or more of an existing degree program at an off-campus educational site, an institution of higher education shall submit a request for approval to the Coordinating Board.

(c) Off-campus delivery of an existing degree program is subject to Assistant Commissioner approval or denial pursuant to approval procedures in §2.9 of this chapter (relating to Revisions and Modifications of Degree Programs).

(d) If the Assistant Commissioner denies the request, an institution may appeal to the Commissioner. The Commissioner's decision is final and may not be appealed.

§2.389.Approval Required for Off-Campus Education in the Texas State Technical College System.

(a) Texas State Technical College shall request approval of an off-campus educational site in a manner prescribed by the Coordinating Board, pursuant to §11.23 of this title (relating to Approval and Operation of Extension Programs and Centers).

(b) Texas State Technical College shall request approval of an off-campus program or course in accordance with Texas Education Code, chapter 135 and chapter 11.

§2.390.Modifications and Phase Out of Off-Campus Degree Programs.

An institution may request a revision, modification, or phase out of an approved off-campus degree program pursuant to §2.9 of this chapter (relating to Revisions and Modifications of Degree Programs).

§2.391.Notification Required for Off-Campus Clinical Courses.

(a) An institution of higher education shall notify the Coordinating Board, in a manner prescribed by the Board each year, of off-campus clinical courses prior to delivery at an off-campus educational site.

(b) In the notification to the Coordinating Board the institution shall provide the following:

(1) The name and address of the off-campus educational site where the clinical course will be delivered;

(2) The anticipated number of students with placements at the off-campus clinical site;

(3) Whether the students enrolled in the clinical course are currently employed at the off-campus clinical site; and

(4) If applicable, written documentation from the clinical facility that there will be no reduction in the number of clinical opportunities available for use by area institutions.

§2.392.Approval Required and Criteria for Off-Campus Programs Outside the State of Texas.

(a) An institution offering a credit-bearing out-of-state or out-of-country course, degree program, or certificate shall:

(1) Adhere to the standards and criteria for off-campus education set forth in §2.384 of this subchapter (relating to Standards and Criteria for Delivery of Off-Campus Education);

(2) Have appropriate authorization from the state or country in which the off-campus education occurs;

(3) Notify the Board of all Study Abroad courses offered to regularly enrolled students. Study abroad courses are subject to notification only approval as outlined in §2.4(1) of this chapter (relating to Types of Approval Required); and

(4) Notify the Board of all Study-in-America courses offered to regularly enrolled students. Study in America courses are subject to notification only approval as outlined in §2.4(1) of this chapter.

(b) Self-supporting programs offered outside the state of Texas must adhere to rules related to self-supporting programs in subchapter O of this chapter (relating to Approval Process and Required Reporting for Self-Supporting Degree Programs).

§2.393.Approval of Employer-Requested Off-Campus Career and Technical Education Programs.

(a) The Coordinating Board shall approve an off-campus career and technical education program at a site requested by an employer that meets the requirements of this section for an institution that requests it if:

(1) The employer has solicited an agreement to offer the program at that site with another institution of higher education that offers the same or substantially similar program;

(2) The proposed site of the program meets one of the following criteria:

(A) The proposed site for the off-campus program is located within the uniform state service region in which the institution described by paragraph (1) of this subsection is located;

(B) If the institution is a public junior college, within the junior college district's service area; or

(C) If the institution is a public technical institute, the institution has approval required by statute and Board rule; and

(3) The institution of higher education described by paragraph (1) of this subsection does not finalize an agreement with the employer within six (6) weeks to provide the career and technical education program in the initial solicitation.

(b) The institution requesting approval for the program shall submit the application on the form prescribed by the Commissioner.

(c) A proposed program is subject to approval required under chapter 2 of this title (relating to Academic and Workforce Education) based on the type of program.

(d) The Board shall not require approval of a higher education regional council for the approval of a program under this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402223

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6182

CHAPTER 4. RULES APPLYING TO ALL PUBLIC INSTITUTIONS OF HIGHER EDUCATION IN TEXAS

SUBCHAPTER B. TRANSFER OF CREDIT, CORE CURRICULUM AND FIELD OF STUDY CURRICULA

19 TAC §§4.32, 4.33, 4.35

The Texas Higher Education Coordinating Board proposes amendments to Texas Administrative Code, Title 19, Part 1, Chapter 4, Subchapter B, §§4.32, 4.33, and 4.35, regarding Field of Study Curricula. Specifically, this amendment will implement the alternative field of study curriculum framework approved by the Texas Transfer Advisory Committee.

Section 4.32 amendments are designed to allow for two different framework structures for field of study curricula as approved by the Texas Transfer Advisory Committee (TTAC). Subsection (d) outlines semester credit hours for components of the standard field of study curriculum and subsection (e) outlines semester credit hour requirements for components of the alternative field of study curriculum approved by the TTAC.

Amendments to §§4.32(b)(2)(e), 4.33, and 4.35, are designed to change the name of what has previously been called the "alternative" Discipline Foundation Courses to "substitute" Discipline Foundation Courses as to not cause confusion by having an "alternative Field of Study" and "alternative Discipline Foundation Courses." The renamed substitute Discipline Foundation Courses apply only to each institution that requests approval for them. Institutional substitute discipline foundation courses must still be approved by the Commissioner of Higher Education as outlined in §4.35.

Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section will be the providing more curricular flexibility for fully transferable field of study curricula, therefore increasing the number of disciplines available to students for block transfer of courses from a community college to a university. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

Comments on the proposal may be submitted to Elizabeth Mayer, Assistant Commissioner for Academic and Health Affairs, P.O. Box 12788, Austin, Texas 78711-2788, or via email at AHAcomments@highered.texas.gov. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendment is proposed under Texas Education Code, Section 61.823, which provides the Coordinating Board with authority to approve Field of Study Curricula for certain fields of study or academic disciplines.

The proposed amendments affect Texas Education Code, Section 61.823.

§4.32.Field of Study Curriculum.

(a) In accordance with Texas Education Code, §61.823, the Board is authorized to approve Field of Study Curricula for certain fields of study/academic disciplines. The Board delegates to the Commissioner development of Field of Study Curricula with the assistance of the Texas Transfer Advisory Committee, as defined by Title 19, Subchapter V, Chapter 1. The Texas Transfer Advisory Committee is responsible for convening Discipline-Specific Subcommittees. Discipline-Specific Subcommittees shall provide subject-matter expertise to the Texas Transfer Advisory Committee in developing Field of Study Curricula in specific disciplines.

(b) A complete Field of Study Curriculum will consist of the following components:

(1) Selected Texas Core Curriculum courses.

(A) Selected Texas Core Curriculum courses relevant to the discipline may be included in the Field of Study Curriculum for that discipline.

(B) Discipline-Specific Subcommittees are responsible for identifying discipline-relevant courses from a list of all Texas Core Curriculum courses provided by the Board that may be used to satisfy core curriculum requirements. Each Discipline-Specific Subcommittee shall recommend identified Texas Core Curriculum courses to the Texas Transfer Advisory Committee.

(C) The Texas Transfer Advisory Committee shall recommend the Texas Core Curriculum courses selected for inclusion in a Field of Study Curriculum to the Commissioner who may approve or deny the inclusion of the recommended Texas Core Curriculum courses in the Field of Study Curriculum.

(D) Each institution of higher education must publish on its public website in manner easily accessed by students the Texas Core Curriculum courses selected for inclusion in a Field of Study Curriculum with the cross-listed TCCNS course number.

(2) Discipline Foundation Courses (DFC).

(A) Discipline Foundation Courses are a set of courses within a major course of study[~~, consisting of up to twelve (12) semester credit hours,~~] selected for inclusion in a Field of Study Curriculum for that discipline. These courses will apply toward undergraduate degrees within the Field of Study Curriculum at all Texas public institutions that offer a corresponding major or track, except for those institutions approved to require alternative Discipline Foundation Courses under [~~Title 19, Chapter 4, Subchapter B,~~] §4.35 of this subchapter (relating to Petition for Substitute [~~Alternative~~] Discipline Foundation Courses).

(B) Each receiving institution must apply the semester credit hours a student has completed in a Discipline Foundation Course upon the student's transfer into a corresponding major or track. The sending institution must indicate Discipline Foundation Courses on the transfer student's transcript.

(C) Discipline-Specific Subcommittees are responsible for identifying discipline-relevant courses for inclusion on the Discipline Foundation Courses list. The Discipline-Specific Subcommittees must select from courses listed in the Lower-Division Academic Course Guide Manual. Each Discipline-Specific Subcommittee shall report this course list to the Texas Transfer Advisory Committee.

(D) The Texas Transfer Advisory Committee shall recommend the Discipline Foundation Courses selected by the Discipline Specific Subcommittees for inclusion in a Field of Study Curriculum to the Commissioner. The Commissioner may approve or deny the Discipline Foundation Courses recommended by the Texas Transfer Advisory Committee for inclusion in a Field of Study Curriculum.

(E) General academic teaching institutions may submit a request for a substitute [~~an alternative~~] set of Discipline Foundation Courses for a specific program of study according to the process in [~~Title 19, Chapter 4, Subchapter B,~~] §4.35 of this subchapter.

(F) Each institution of higher education must report to the Coordinating Board and publish on its public website in manner easily accessed by students the Discipline Foundation Courses with the cross-listed TCCNS course numbers for each course.

(G) The Commissioner must publish the list of Discipline Foundation Courses for each approved Field of Study Curriculum on the agency website with the cross-listed TCCNS course number for each course.

(3) Directed Electives.

(A) Directed Electives are a set of courses that apply toward a major course of study within a Field of Study Curriculum at a specific general academic teaching institution.

[(B) The Directed Electives for each Field of Study Curriculum must consist of at least six (6) semester credit hours. The Directed Electives and Discipline Foundation Courses components combined may not exceed twenty (20) semester credit hours in total.]

(B) [~~(C)~~] Faculty from each general academic teaching institution may select a list of Directed Electives for the major course of study corresponding to each Field of Study curriculum. Faculty must select the Directed Electives only from courses listed in the Lower-Division Academic Course Guide Manual.

(C) [~~(D)~~] The Chief Academic Officer of the institution shall submit the list of Directed Electives for inclusion in a Field of Study Curriculum with the cross-listed TCCNS course number to the Commissioner not later than forty-five (45) [45] days after being sent the request from the Coordinating Board. The Coordinating Board shall publish the list of each institution's Directed Electives for each approved Field of Study Curriculum on the agency website with the cross-listed TCCNS course numbers for each course.

(D) [~~(E)~~] An institution that does not submit its Directed Electives in accordance with subparagraph (C) [~~(D)~~] shall be required to accept any Directed Elective courses that appear on the Board's list for the Texas Direct Associate Degree for any institution's Field of Study Curriculum.

(E) [~~(F)~~] Each institution of higher education must publish on its public website in a manner easily accessed by students Directed Electives with the cross-listed TCCNS course number.

(F) [~~(G)~~] An institution shall accept and apply directed electives for fields of study upon transfer as long as the directed elective was active on the Coordinating Board's inventory of directed electives at the time the student completed the course at the community college.

(1) Selected core curriculum courses as prescribed in subsection (b)(1) of this section.

(2) Up to twelve (12) semester credit hours of Discipline Foundation Courses as prescribed in subsection (b)(2) of this section.

(3) At least six (6) semester credit hours of Directed Electives as prescribed in subsection (b)(3) of this section.

(4) The Directed Electives and Discipline Foundation Courses combined components of the standard field of study curriculum may not exceed twenty (20) semester credit hours in total.

(d) Alternative Field of Study Curriculum. The alternative framework for field of study curriculum shall include the following:

(1) Up to thirty (30) semester credit hours of selected Texas Core Curriculum Courses as prescribed by subsection (b) of this section.

(2) A minimum of eighteen (18) semester credit hours, not to exceed twenty-four (24) semester credit hours of Discipline Foundation Courses as prescribed in subsection (b)(2) of this section.

(3) Up to twelve (12) semester credit hours of Directed Electives as prescribed in subsection (b)(3) of this section.

(e) [~~(c)~~] A receiving general academic teaching institution shall determine whether a transfer student is Field of Study Curriculum complete upon the transfer student's enrollment. If a student successfully completes an approved Field of Study Curriculum, a general academic teaching institution must substitute that block of courses for the receiving institution's lower-division requirements for the degree program for the corresponding Field of Study Curriculum into which the student transfers. Upon enrollment, the general academic teaching institution must grant the student full academic credit toward the degree program for the block of courses transferred.

(f) [~~(d)~~] If a student transfers from one institution of higher education to another without completing the Field of Study Curriculum, the receiving institution must grant academic credit in the Field of Study Curriculum for each of the courses that the student has successfully completed in the Field of Study Curriculum of the sending institution. After granting the student credit for these courses, the institution may require the student to satisfy remaining course requirements in the current Field of Study Curriculum of the receiving general academic teaching institution, or to complete additional requirements in the receiving institution's program, as long as those requirements do not duplicate course content the student previously completed through the Field of Study Curriculum.

(g) [~~(e)~~] Each institution must note the selected Texas Core Curriculum component and Discipline Foundation Courses components of the Field of Study Curriculum courses on student transcripts as recommended by the Texas Association of Collegiate Registrars and Admissions Officers (TACRAO).

(h) [~~(f)~~] The Board shall publish on its website the components of each Field of Study Curriculum, including the selected Texas Core Curriculum courses, the Discipline Foundation Courses, and the Directed Electives of each general academic teaching institution.

(i) [~~(g)~~] Effective Dates.

(1) Unless repealed or replaced, Field of Study Curricula in effect as of March 1, 2021, will remain in effect until August 31, 2025, upon which date those Field of Study Curricula expire by operation of law. For Field of Study Curricula that are repealed, replaced, or expire by operation of law, the following transition or "teach out" provisions apply:

(A) A student who has earned credit on or before August 31, 2022, in one or more courses included in a Field of Study Curriculum that exists on March 1, 2021, is entitled to complete that Field of Study Curriculum on or before August 31, 2025.

(B) A student who has not, on or before August 31, 2022, earned any course credit toward a Field of Study Curriculum in effect on March 1, 2021, is not entitled to transfer credit for that Field of Study Curriculum.

(2) After an institution's Spring 2026 enrollment deadline, a receiving institution is not required to transfer a complete Field of Study Curricula that expired prior to that date. A receiving institution may, at its discretion, choose to accept a complete or partial Field of Study Curricula that has expired.

§4.33.Approval of Field of Study Curricula.

(a) In accordance with [~~Title 19, Chapter 1, Subchapter V,~~] §1.239 of this title (relating to Duties of the Texas Transfer Advisory Committee), the Texas Transfer Advisory Committee shall review relevant data, coordinate a schedule of discipline-specific course reviews, and recommend Field of Study Curricula to the Commissioner and Board. In creating the schedule for development of Field of Study Curricula, the Texas Transfer Advisory Committee shall prioritize the factors set out in [~~Chapter 1, Subchapter V,~~] §1.239(a)(4).

(b) At the direction of the Texas Transfer Advisory Committee and in accordance with [~~Title 19, Subchapter V, Chapter 1~~] §1.242 of this title (relating to Duties of the Discipline-Specific Subcommittees), a Discipline-Specific Subcommittee shall review institutions' current program requirements and data about transfer students' course-taking and success in that discipline and recommend to the Texas Transfer Advisory Committee courses required in the Field of Study Curriculum for that major.

(c) The Texas Transfer Advisory Committee may consider for recommendation to the Commissioner Field of Study Curricula recommended by Discipline-Specific Subcommittees and any request by an institution for substitute [~~alternative~~] Discipline Foundation Courses as described in §4.35 of this subchapter (relating to Petition for Substitute Discipline Foundation Courses) [~~§4.34(d) - (k)~~].

(d) The Texas Transfer Advisory Committee's approval of a Field of Study Curriculum requires approval by a supermajority vote of two-thirds of the general academic teaching institution representatives who are present and voting and two-thirds of the public junior college representatives who are present and voting.

(1) If the Texas Transfer Advisory Committee fails to approve a Field of Study Curriculum, the Texas Transfer Advisory Committee may vote by a simple majority of all members present and voting to request that a Discipline Specific Subcommittee reconvene in an attempt to address any [~~and~~] concerns identified by the Texas Transfer Advisory Committee.

(2) Upon final recommendation of the Discipline-Specific Subcommittee, the Texas Transfer Advisory Committee may reconsider a vote to recommend to the Commissioner approval of a Field of Study Curriculum.

(e) The Commissioner may approve or deny a Field of Study Curriculum recommended by the Texas Transfer Advisory Committee.

(f) Before making a final determination whether to approve or deny a Field of Study Curriculum recommended by the Texas Transfer Advisory Committee, the Commissioner shall provide for informal notice and comment by publishing each proposed Field of Study Curriculum in the Texas Register In Addition section for a minimum of thirty (30) [30] days. The Commissioner shall consider any comments prior to approving or denying the Field of Study Curriculum. The Commissioner's decision is final and may not be appealed.

(g) The Commissioner shall report to the Board at each quarterly meeting on each Field of Study Curriculum the Commissioner approved since the last Board meeting.

(h) The Commissioner shall annually provide a written report to the Texas Transfer Advisory Committee members with information on all approved Field of Study Curricula.

§4.35.Petition for Substitute [~~Alternative~~] Discipline Foundation Courses.

(a) An institution may request the Commissioner to approve substitute [~~alternative~~] Discipline Foundation Courses based upon the following criteria:

(1) The institution demonstrates that approved Discipline Foundation Courses significantly vary from the institution's lower-division curriculum for a given major; or

(2) The institution demonstrates based on evidence that students completing approved Discipline Foundation Courses are not successful in the institution's upper-division curriculum.

(b) The Chief Academic Officer of an institution that requests substitute [~~alternative~~] Discipline Foundation Courses based on the criteria in this rule must submit a petition for substitute [~~alternative~~] Discipline Foundation Courses in writing to the Commissioner, along with a written, evidence-based rationale. The Commissioner shall promptly notify the Texas Transfer Advisory Committee of the request for substitute [~~alternative~~] Discipline Foundation Courses.

(c) Upon notification by the Commissioner, the Texas Transfer Advisory Committee shall evaluate the institution's request for substitute [~~alternative~~] Discipline Foundation Courses based upon the number of students affected, how the substitute [~~alternative~~] Discipline Foundation Courses would impact transfer, and any other criteria as decided by a majority vote of public junior college representative members and general academic teaching institution members present and voting.

(d) After review of the criteria, the Texas Transfer Advisory Committee shall vote on whether to recommend the substitute Discipline Foundation Courses [~~alternative DFC~~] to the Commissioner. A majority of the public junior college sector representatives and a majority of the general academic teaching institution sector representatives who are present and voting must both vote in favor for the substitute Discipline Foundation Courses [~~alternative DFC~~] to advance to the Commissioner for approval.

(e) No more than thirty (30) [30] days after its vote on the petition, the Texas Transfer Advisory Committee shall provide a written report to the Commissioner explaining the rationale for the action taken by the Texas Transfer Advisory Committee on the request for substitute [~~alternative~~] Discipline Foundation Courses.

(f) No more than thirty (30) [30] days after receiving the written report from the Texas Transfer Advisory Committee, the Commissioner shall consider the Texas Transfer Advisory Committee report and make a final determination whether to approve the substitute Discipline Foundation Courses [~~alternative DFC~~]. The Commissioner's decision is final and may not be appealed.

(g) The Commissioner shall inform the Board at the next quarterly meeting of all decisions to approve or deny petitions for substitute Discipline Foundation Courses [~~alternative DFC~~].

(h) The Coordinating Board shall maintain a public website that includes a list of all substitute [~~alternative~~ ] Discipline Foundation Courses approved by the Commissioner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402224

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6182

CHAPTER 10. GRANT PROGRAMS

SUBCHAPTER D. RURAL RESIDENT PHYSICAN GRANT PROGRAM

19 TAC §§10.90 - 10.98

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new rules in Texas Administrative Code, Title 19, Part 1, Chapter 10, Subchapter D, §§10.90 - 10.98, concerning the administration of the Rural Resident Physician Grant Program established by House Bill 1065, 86th Texas Legislature. Specifically, this new subchapter establishes rules related to administration of the Rural Residency Physician Grant Program. The Coordinating Board used negotiated rulemaking to develop these proposed rules. The Coordinating Board will make reports of negotiated rulemaking committees available upon request.

Texas Education Code, Chapter 58A, Subchapter E, establishes the Rural Residency Physician Grant Program and authorizes the Coordinating Board to adopt rules for implementation. The proposed rules outline the application and evaluation processes, reporting, and other requirements for eligible entities to receive funding under the grant program

Rule 10.90, Purpose, establishes the purpose for the subchapter is to administer the Rural Resident Physician Grant Program which provides funding for the establishment or expansion of graduate medical education programs in rural Texas.

Rule 10.91, Authority, establishes authority for this subchapter is found in Texas Education Code, §58A.081, which grants the Coordinating Board with authority to adopt rules to administer the grant program.

Rule 10.92, Definitions, defines terms related to administration of the grant program.

Rule 10.93, Eligibility, establishes eligibility criteria to receive grant funding.

Rule 10.94, Application Process, describes main criteria that must be included in the grant application, including the number of residency positions created or maintained, budget, documentation on existing staffing and resources to support new residency positions, and evidence of support from the institution and community.

Rule 10.95, Evaluation of Applications, establishes selection criteria for awards.

Rule 10.96, Grant Awards, establishes how grant funding is awarded and defines allowable expenditures. Grantees may expend grant funds on resident physician salaries or other direct costs to create or maintain the residency position(s).

Rule 10.97, Reporting, establishes reporting requirements for grantees.

Rule 10.98, Additional Requirements, establishes criteria for returning unspent funds at the end of the grant term.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the subchapter will be grant management that is aligned with statute. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state’s economy.

The new section is proposed under Texas Education Code, Section 58A.081, which provides the Coordinating Board with the authority to administer the Rural Resident Physician Grant Program and adopt program rules.

The proposed new rules affect Texas Education Code, Section 58A.081.

§10.90.Purpose.

The purpose of this subchapter is to administer the Rural Resident Physician Grant Program to provide and oversee grants for the establishment or expansion of new graduate medical education programs in rural and non-metropolitan areas to help meet the health-care needs of rural communities in Texas.

§10.91.Authority.

The authority for this subchapter is found in Texas Education Code, chapter 58A, §58A.081.

§10.92.Definitions.

Definitions set forth in Texas Education Code, chapter 58A (relating to Programs Supporting Graduate Medical Education) are hereby incorporated into this rule. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Rural--A rural or non-metropolitan Texas region or community as defined by the Accreditation Council for Graduate Medical Education as a Health Professional Shortage Area or a Medically Underserved Area/Population.

(2) Rural Training Tracks--As defined in rules and regulations of the Centers for Medicare and Medicaid Services (CMS) in 42 CFR §413.79(k), is an ACGM-accredited program in which all or some residents/fellows gain both urban and rural experience with more than half of the education and training for the applicable resident(s)/fellow(s) taking place in a rural area.

§10.93.Eligibility.

(a) To be eligible to apply for and receive grant funding an entity must:

(1) be a new or expanded physician residency program at teaching hospitals and other appropriate health care entities; and

(2) have a resident physician site in a rural or nonmetropolitan area as defined by Accreditation Council for Graduate Medical Education (ACGME).

(b) The Coordinating Board will designate an eligible site in cooperation with residency program directors and the ACGME.

§10.94.Application Process.

(a) Unless otherwise specified in the RFA, an eligible entity may submit a maximum of two (2) applications.

(b) To qualify for funding consideration, an eligible applicant must submit an application to the Coordinating Board. Each application shall:

(1) be submitted electronically in a format specified in the RFA;

(2) adhere to the grant program requirements contained in the RFA; and

(3) be submitted with approval of the President or Chief Executive Officer or designee on or before the day and time specified by the RFA.

(1) The number of residency positions that will be created or maintained if grant funds are awarded;

(2) A budget that includes the requested grant amount broken down by resident and type of residency position;

(3) documentation that an applicant's existing staffing and infrastructure is sufficient to support new or maintained residency positions and satisfy applicable accreditation requirements;

(4) detailed plans on how the new or maintained residency positions will produce physicians who are prepared for and plan to practice in rural areas;

(5) Evidence of support for residency training by both the institution and the community; and

(6) any other requirements as set forth in the RFA.

§10.95.Evaluation.

(a) The Coordinating Board shall competitively select applicants for funding based on requirements and award criteria provided in the RFA.

(b) Award criteria will include whether the rural area has the resources to support a physician residency program that at minimum meets applicable residency program accreditation requirements.

(c) The evaluation criteria will include priority for applications that propose creating rural training tracks or additional residency positions within an existing rural residency program or track.

§10.96.Grant Awards.

(a) The amount of funding available for the rural resident physician grant program is dependent on the legislative appropriation for the program for each biennial state budget. The Coordinating Board will provide award levels and estimated number of awards in the RFA.

(b) Each grant award shall be subject to Coordinating Board approval pursuant to §1.16 of this title (relating to Contracts, Including Grants, for Materials and/or Services).

(d) The Coordinating Board may advance a grant award to a grantee.

(e) The Coordinating Board will first award grants for all residency positions awarded a grant under this subchapter in the preceding year before awarding a grant for a residency position that did not receive a grant in the preceding year, provided that the applicable grant recipient from the preceding year meets eligibility requirements for a new grant award and complied with all grant and application requirements set forth in this subchapter and the terms of the grant previously awarded. The Coordinating Board shall award all remaining funds pursuant to the evaluation criteria set forth in §10.95 of this subchapter (relating to Evaluation).

(f) The Coordinating Board will award any grant funds returned pursuant to §10.98 of this subchapter (relating to Additional Requirements) equitably to current awardees.

(g) A grantee shall only expend grant funds on the salary of the resident physician and other direct costs that are necessary and reasonable to create or maintain the residency position as stated in grantee's budget.

§10.97.Reporting Requirements.

A grantee shall file program, expenditure, and resident reports in the format required by the Coordinating Board by the deadlines set forth in the RFA. A grantee shall provide information that includes, but is not limited to, the following:

(1) The project is well-defined and includes research-based evidence to indicate the project will improve rural resident training and expand rural residency training tracks in the state.

(2) The proposed project can be completed within the grant period.

(3) The proposed project clearly outlines objectives, outcomes, and provides information on the characteristics of the program's community service area, overall medical provider ability, challenges to recruitment, and other relevant issues.

(4) The proposed project goals align with overall goals of the RFA to develop innovative approaches to addressing the needs of underserved rural communities or regions.

(5) The proposed project goals are realistic and appropriate to the goals of the applicant and are described in sufficient detail.

(6) The proposed project activities will likely continue after the grant period ends and are replicable in other sites.

(7) The proposed project evaluation for determining the project's success is described in sufficient detail and includes relevant information/data.

(8) The expected outcomes are achievable using the resources and plans the applicant submits.

(9) The expected outcomes would significantly improve rural residency training and healthcare in underserved regions and communities.

(10) The applicant's budget indicates financial resources are appropriately allocated to meet project goals and objectives.

§10.98.Additional Requirements.

(a) Cancellation or Suspension of Grant Solicitations. The Coordinating Board has the right to reject all applications and cancel a grant solicitation at any point.

(b) Forfeiture and Return of Funds.

(1) The grantee shall return any award funds remaining unspent at the end of the grant term as set forth in the RFA or Notice of Grant Award (NOGA) to the Coordinating Board within sixty (60) days.

(2) The grantee shall fill all funded residency positions no later than the first reporting deadline as set forth in the RFA. A grantee forfeits and must return, if grant funds were received, a proportionate share of the grant award for each unfilled residency position as determined by the Coordinating Board.

(3) A grantee shall notify the Coordinating Board within thirty (30) days of any funded residency positions becoming vacant. A grantee forfeits and shall return, if grant funds were received, a proportionate share of the grant award for each unfilled residency position as determined by the Coordinating Board.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402225

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6182

SUBCHAPTER E. PROFESSIONAL NURSING SHORTAGE REDUCTION PROGRAM

19 TAC §§10.110 - 10.117

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new rules in Texas Administrative Code, Title 19, Part 1, Chapter 10, Subchapter E, §§10.110 - 10.117, concerning the administration of the Professional Nursing Shortage Reduction Program. Specifically, the proposed rules will replace the existing Professional Nursing Shortage Reduction Program rules currently in Chapter 22, Subchapter S, which will be repealed in future rulemaking. The proposed rules clarify grant award requirements based on statute and provide alignment with budgetary provisions included in rider. The Coordinating Board used negotiated rulemaking to develop these proposed rules. The Coordinating Board will make reports of negotiated rulemaking committees available upon request.

Rule 10.110, Purpose, establishes the purpose for the subchapter is to administer the Professional Nursing Shortage Reduction Program.

Rule 10.111, Authority, establishes authority for this subchapter is found in Texas Education Code, §§61.9621 - 61.9628, which grants the Coordinating Board with authority to adopt rules to administer the Professional Nursing Shortage Reduction Program.

Rule 10.112, Definitions, defines terms related to administration of the grant program.

Rule 10.113, Eligibility, establishes eligibility criteria for grant funding. Language clarifies eligibility of existing and new professional nursing programs.

Rule 10.114, Application Process, contains requirements for application submission and funding increases.

Rule 10.115, Evaluation of Applications, establishes selection criteria for awards.

Rule 10.116, Grant Awards, establishes how grant funding is appropriated and distributed. This section clarifies allowable and reasonable costs associated with the award.

Rule 10.117, Reporting, establishes reporting requirements for grantees.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Elizabeth Mayer, Assistant Commissioner Academic and Health Affairs, has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administering the subchapter will be uniform processes for managing the grant that are more closely aligned with House Bill 1, 88th Legislature, Regular Session (2023). There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

The new sections are proposed under Texas Education Code, Sections 61.9621 - 61.9628, which provides the Coordinating Board with the authority to administer the Professional Nursing Shortage Reduction Program, supervise institutional reporting requirements, and adopt program rules.

The proposed new rules affect Texas Education Code, Sections 61.9621 - 61.9628.

§10.110.Purpose.

The purpose of this subchapter is to administer the Professional Nursing Shortage Reduction Program to provide and oversee grants to eligible entities to meet the needs of the state of Texas for initially registered nurses both in number and type.

§10.111.Authority.

The authority for this subchapter is found in Texas Education Code, chapter 61, §§61.9621 -61.9628, which provides the Board with the authority to adopt rules to administer the Professional Nursing Shortage Reduction Program.

§10.112.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Board--The governing body of the agency known as the Texas Higher Education Coordinating Board.

(2) CBM Reporting Manual--The Coordinating Board's manual that defines deadlines and procedures for submitting data into the CBM the CBM Reporting System.

(3) CBM Reporting System--The Coordinating Board's Management Reporting System for collecting institutional data.

(4) Commissioner--The Texas Commissioner of Higher Education.

(5) Coordinating Board--The agency and staff that report to the Board and Commissioner of the agency known as the Texas Higher Education Coordinating Board.

(6) New Professional Nursing Program--A professional nursing program that only has two (2) years of graduation data.

(7) Private or Independent Institution of Higher Education--Includes only a private or independent college or university as defined in Texas Education Code, §61.003(15).

(8) Professional Nursing Program--An educational program that prepares a student for initial licensure as a registered nurse.

(9) Public Institution of Higher Education--Any public technical institute, public junior college, public senior college or university, medical or dental unit, or other agency of higher education as defined in Texas Education Code, §61.003(8).

(10) Request for Applications (RFA)--A type of solicitation notice in which the Coordinating Board announces available grant funding, sets forth the guidelines governing the program, provides evaluation criteria for submitted applications, and provides instructions for eligible entities to submit applications for such funding. The guidelines governing the program may include a Letter of Intent, eligibility requirements, performance expectations, budget guidelines, reporting requirements, and other standards of accountability for this program.

§10.113.Eligibility.

(a) To be eligible to apply for and receive funding under the Program an applicant must:

(1) Be a Texas public or private institution of higher education as defined by Texas Education Code, §61.003, or an entity that was eligible to receive a grant under the Program prior to September 1, 2009;

(2) Have a professional nursing program or new professional nursing program that is approved by and in good standing with the Texas Board of Nursing;

(3) Submit required nursing program data in the CBM Reporting System as outlined in the CBM Reporting Manual, including;

(A) Enrollments; and

(B) Graduates; and

(4) Any other eligibility criteria set forth in the RFA.

(b) The RFA may allow for a consortium of institutions to collaborate on a joint or regional basis to increase professional nursing program enrollment or graduates. Any eligibility criteria for a consortium application shall be set forth in the RFA.

§10.114.Application Process.

(a) Unless otherwise specified in the RFA, an eligible applicant may submit a maximum of one application.

(b) To qualify for funding consideration, an eligible applicant shall submit an application to the Coordinating Board. Each application shall:

(1) Be submitted electronically in a format specified in the RFA;

(2) Adhere to the grant program requirements contained in the RFA; and

(3) Be submitted with proper authorization on or before the day and time specified in the RFA.

(1) State the number of additional enrollments or graduates over the prior academic year the professional nursing program intends to enroll or graduate if the institution receives a grant;

(2) List at least three benchmark targets and dates to monitor adequate progress toward reaching the goal set for in paragraph (1) of this subsection;

(3) Provide a budget, including a proposed payment schedule, for the grant funds reasonable and necessary to meet the planned increase in professional nursing program enrollment or graduation;

(4) Include a commitment letter signed by the applicant's President, Chief Executive Officer or designee that the applicant will meet or exceed the planned increase in enrollment or graduation for the professional nursing program for the grant term as specified in the RFA; and

(5) Meet any other requirement specified in the RFA.

§10.115.Evaluation of Applications.

The Commissioner shall approve applicants for funding based on requirements and award criteria provided in the RFA and in compliance with these rules.

§10.116.Grant Awards.

(a) The amount of funding available to the program is dependent on the legislative appropriation for the program for each biennial state budget.

(b) The Coordinating Board shall approve awards as authorized in §1.16 of this title (relating to Contracts, Including Grants, for Materials and/or Services).

(c) Subject to subsection (b) of this section, the Commissioner may negotiate or adjust a grant award to best fulfill the purpose of the RFA and ensure an equitable distribution of grant funds among the types of professional nursing programs in order to increase the number of enrolling and graduating students.

(d) The Coordinating Board may advance a grant award to a grantee.

(e) A grant shall demonstrate through reporting that the grantee is in compliance with the terms of the grant award and is, at a minimum, meeting application benchmark requirements before the Coordinating Board may issue the next periodic grant award installment.

(f) The Coordinating Board shall set forth the determination of the allowability of administrative costs in the RFA.

(g) A grantee may use a grant award only on necessary and reasonable costs exclusively related to:

(1) enrolling additional nursing students;

(2) evidenced-based practices in the recruitment and retention of students;

(3) identifying, developing, or implementing innovative or evidenced-based practices to make effective and efficient use of professional nursing program faculty, instructional or clinical space, or other necessary resources including:

(A) regional shared services, courses, personnel, facilities, and responsibilities among two or more professional nursing programs; or

(B) employing or contracting with preceptors or part-time faculty to provide clinical instruction to accommodate increased student enrollment; and

(4) education, recruitment, or retention of professional nursing program faculty.

§10.117.Reporting.

Each grantee shall file an annual report, pursuant to Texas Education Code, §61.9626, in the format required by the Coordinating Board by the deadline set forth in the RFA. Grantees shall provide information that includes the following:

(1) Status of the grant project activities;

(2) Budget expenditures by budget category;

(3) Student enrollment, retention, and demographic data as applicable;

(4) Graduation status, as applicable;

(5) Faculty hiring and retention data as applicable;

(6) Matching contributions, if applicable; and

(7) Any other information required by the RFA.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402226

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6182

CHAPTER 13. FINANCIAL PLANNING

SUBCHAPTER R. STATE PUBLIC JUNIOR COLLEGE FINANCE PROGRAM REPORTING, AUDIT, AND OVERALLOCATION

19 TAC §§13.522 - 13.525, 13.528, 13.529

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to Texas Administrative Code, Title 19, Part 1, Chapter 13, Subchapter R, §§13.522 - 13.525, 13.528, and 13.529, concerning audit and reporting provisions related to community college finance. Specifically, this amendment will clarify timelines related to ameliorating errors in data reporting and will align subchapter R with forthcoming rules the Coordinating Board intends to adopt.

Rule 13.522, Definitions, amends an existing definition for "Data Reporting Error" and adds a new definition for "Fundable Certified Data." These two definition changes will clarify elements of the timeline for making determinations of data reporting errors and ameliorating those errors: the window for determining a data reporting error has occurred will start on May 1 of the preceding fiscal year, which is the date fundable certified data will be considered finalized in the forthcoming subchapter U rules. This clarification of timeline allows the Coordinating Board flexibility to work with institutions in conducting the standard data collection process, while also setting in place a point at which any remaining errors need to be corrected through the formal data reporting error process outlined in §13.525. Additionally, a new definition is added for public junior colleges to clarify the reference to affected institutions.

Rule 13.523, Certification of Compliance, updates the email address where institutions may submit their attestations of certification of compliance and adds compliance monitoring findings under the list of disclosures. Statute grants the Coordinating Board authority to conduct compliance monitoring of institutions, including for accuracy of data reported for formula funding (Texas Education Code, §61.035). Adding a requirement for compliance monitoring findings under this provision ensures the Coordinating Board will have a full picture of potentially relevant findings.

Rules 13.523 and 13.524 are amended to make conforming changes regarding how public junior colleges are referenced.

Rule 13.525, Commissioner Review of Required Reporting; Data Reporting Errors, makes two key changes: the proposed rule opens the window to make a data reporting error determination starting from finalization of fundable certified data, which is set at May 1; and the Chief Executive Officer of an institution potentially affected by a data reporting error may initially notify the Commissioner of Higher Education of the data reporting error. The proposed rule thus grants an affected college an avenue to notify the Coordinating Board of any significant discrepancies in data potentially affecting funding, requiring that a single official have responsibility for official data error notifications to ensure clarity of communication.

Rule 13.528, Recovery of Overallocated Funds, adjusts internal cross-references relating to funding allocation cycle to reference the Coordinating Board's forthcoming subchapter U, which will contain relevant rules.

Rule 13.529, Payment of Under-allocated Funds, similarly updates internal cross-references to point to the forthcoming subchapter U.

Emily Cormier, Assistant Commissioner for Funding, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Emily Cormier, Assistant Commissioner for Funding, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section will be the clarification of data reporting and error amelioration timelines and align subchapter R with additional forthcoming community college finance rules. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

Comments on the proposal may be submitted to Emily Cormier, Assistant Commissioner for Funding, P.O. Box 12788, Austin, Texas 78711-2788, or via email at CCFinance@highered.texas.gov. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The amendment is proposed under Texas Education Code, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules and require reporting to implement the Public Junior College State Finance Program.

The proposed amendment affects Texas Education Code, Section 130A.006.

§13.522.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings:

(1) Audit--An engagement to audit the program conducted by the Coordinating Board's Internal Auditor and internal audit or compliance monitoring staff pursuant to either Texas Education Code, §§130A.006(4) or 61.035. This term may include a site visit, desk review, or examination of the institution's use of funds allocated by the Coordinating Board and data reported to the Coordinating Board. The term includes auditing undertaken to obtain evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policymaking decisions, including data used for formula funding allocations, to ensure the data is reported accurately.

(2) Census Date--Prior to September 1, 2024, as defined in subchapter P, §13.472, of this chapter (relating to Definitions). On or after September 1, 2024, as defined in subchapter S, §13.553, of this chapter (relating to Definitions).

(3) Chief Audit Executive--The Internal Auditor hired by the Coordinating Board to perform internal auditing and compliance monitoring on behalf of the Coordinating Board pursuant to Texas Education Code, chapters [~~Chapters~~] 61, 130, and 130A.

(4) Compliance Monitoring--A risk-based audit and compliance function conducted by the Coordinating Board pursuant to either Texas Education Code, §§130A.006(4) or 61.035, for the purpose of reviewing and assessing programmatic, legal, and fiscal compliance. This function may include conducting audits, site visits, desk reviews, or other examinations, to ensure that funds allocated or distributed by the Coordinating Board are allocated, distributed, and used in accordance with applicable law and Coordinating Board rule. The function includes obtaining evidence to sufficiently examine or verify data submitted to the Coordinating Board to be used by the Coordinating Board for funding or policymaking decisions, including data used for formula funding allocations, to ensure the data is reported accurately.

(5) Data Reporting Error--An error in fundable certified data or other data reported by an institution to be used to calculate formula funding for a fiscal year to the Coordinating Board after May 1 of the preceding fiscal year that the Commissioner of Higher Education in his or her discretion determines may result in a material impact in the formula funding a public junior college is entitled to or received. [An error in data or other information reported and certified by a public junior college to the Coordinating Board that the Commissioner of Higher Education in his or her discretion determines may result in a material impact in the formula funding a public junior college was entitled to or received.]

(6) Desk Review--An administrative review by the Coordinating Board that is based on information reported by an institution of higher education or a private or independent institution of higher education, including supplemental information required by the Coordinating Board for purposes of compliance monitoring, except that the term does not include information or accompanying notes gathered by the Coordinating Board during a site visit.

(7) Full-Time Student Equivalent (FTSE)--Prior to September 1, 2024, as defined in subchapter P, §13.472, of this chapter. On or after September 1, 2024, as defined in subchapter S, §13.553, of this chapter.

(8) Funding Adjustment--Any increase or decrease in funding by the Coordinating Board to an institution of higher education based on an over- or under-allocation of funds.

(9) Fundable Certified Data--As defined in subchapter U of this chapter (relating to Community College Finance Program: Forecasting Methodology and Finance Policy).

(10) [~~(9)~~] Over-allocation--The over-payment of funds to a public junior college due to a data reporting error or other error by either the institution or the Coordinating Board that results in payments beyond what the institution is due.

(11) Public Junior College--In this subchapter, means a public junior college, public junior college district, or community college as defined in Texas Education Code, chapters 130 or 130A, unless expressly provided otherwise.

(12) [~~(10)~~] Site Visit--An announced or unannounced in-person visit by a representative of the Coordinating Board or its agent to an institution of higher education or a private or independent institution of higher education for the purposes of conducting an audit.

(13) [~~(11)~~] Under-allocation--The under-payment of funds to a public junior college due to a data reporting error or other error by either the institution or the Coordinating Board that results in payments less than what the institution was owed for the fiscal year.

§13.523.Certification of Compliance.

(a) A public junior college is not eligible to receive funds under this subchapter unless that public junior college submits a certification of compliance with the requirements of Texas Education Code, §130.003(b,) and as stated herein.

(b) A public junior college must submit an attestation via email to ccfinance@highered.texas.gov [~~ccfinanceCTC@highered.texas.gov~~ ] certifying to compliance with Texas Education Code, §130.003(b), to the Coordinating Board by August 1 of each year. The certification must be signed by the public junior college's president, or Chief Executive Officer, as applicable. The certification must certify the following:

(1) That the public junior college is currently in compliance with each provision of Texas Education Code, §130.003; and

(2) The public junior college has complied with all laws and Coordinating Board rules for the establishment and operation of a public junior college.

(c) If a public junior college [~~district~~] has an unresolved or ongoing audit or compliance monitoring finding that the certifying official determines may preclude the public junior college's [~~district's~~] certification under Texas Education Code, §130.003(b), the public junior college [~~district~~] shall disclose the finding(s) and provide an explanation of the finding(s) and proposed resolution.

(1) The Commissioner of Higher Education shall determine whether the public junior college [~~district~~] can demonstrate that it [~~the district~~] will be in compliance for the purpose of receiving a scheduled payment.

(2) Any payment that the Coordinating Board makes to an institution pursuant to this subchapter is subject to recovery or recoupment if the certifying official does not make the required certification for the fiscal year for which the certification was required.

§13.524.Required Reporting.

(a) Required Reporting. A public junior college must submit data through required reporting mechanisms established by the Coordinating Board. The Coordinating Board may use information obtained through required reporting for:

(1) calculating funding disbursed under this chapter;

(2) providing timely data and analyses to inform management decisions by the governing body of each public junior college [~~district~~];

(3) administering or evaluating the effectiveness of programs; or

(4) auditing the program.

(b) Financial Reporting: The Community College Annual Reporting and Analysis Tool (CARAT) and Annual Financial Report (AFR) Reporting.

(1) Standards. Each public junior college [~~district~~] must submit their Annual Financial Report (AFR) for the preceding fiscal year by January 1. The public junior college must submit the AFR following the requirements provided in the Coordinating Board's Budget Requirements and Annual Financial Reporting Requirements for Texas Public Community Colleges, also known as the AFR Manual, for that fiscal year, in accordance with Texas Education Code, §61.065.

(2) Format. Each public junior college must report AFR data for each completed fiscal year as prescribed in the Community College Reporting and Analysis Tool (CARAT) by January 31 of the following fiscal year.

(3) Review Process. The Commissioner of Higher Education will update the AFR Manual, as required by Texas Education Code, §61.065. The AFR Manual will conform to Governmental Accounting Standards Board (GASB) statements and guidance.

(1) Standards. Each public junior college must report all instructional expenses from each completed fiscal year for each institutional discipline and unallocated administrative expenses as defined in the RFOE by January 31 of the following fiscal year.

(2) Coordinating Board staff shall use the data provided on expenses at public junior colleges to produce a study of costs for each instructional discipline each year. This study will review all expenses made by institutions for instruction and administration from all unrestricted sources of funds, including appropriated general revenue, tuition and fees, contract instruction, other educational and general revenue, and local tax revenue.

(d) Financial Reporting: Integrated Fiscal Reporting System (IFRS).

(1) Standards. Each public junior college shall [l] report comprehensive tuition and fee financial data each fiscal year through IFRS.

(2) The Coordinating Board may use data reported through IFRS to establish average annual tuition and fee charges as necessary to implement this chapter.

(e) Academic Reporting: Education Data System reporting.

(1) Standards. Each public junior college must use data standards established by the Commissioner of Higher Education to submit required information relating to the delivery of educational programs. The Commissioner of Higher Education shall adopt and publish annually data standards in official Coordinating Board publications, including through the Coordinating Board Management (CBM) Reporting and Procedures Manual for Texas Community, Technical, and State Colleges. The Coordinating Board will widely disseminate this publication, which will include:

(A) descriptions of the data collections and submission requirements;

(B) descriptions of data elements and the codes used to report them, including data used to calculate Full-Time Student Equivalent enrollments, Texas Success Initiative eligibility of students, student transfer, dual credit or dual enrollment, the number and type of credentials conferred, and other relevant student characteristics;

(C) detailed responsibilities of public junior colleges in connection to the data submission process, including each deadline for submission and resubmission; and

(D) descriptions of data submission requirements, including submission record layout specifications and data edit specifications.

(2) A public junior college may report a student in attendance on the approved course census date for the purpose of funding under this subchapter, in accordance with Texas Education Code, §130A.008.

(3) Review Process. The Commissioner of Higher Education shall review the CBM Reporting and Procedures Manuals annually. The Commissioner of Higher Education may approve changes to the data and reporting standards outside of the annual review process to expedite implementation of data collections and reporting.

(4) Certification. The reporting official for each public junior college must certify the accuracy of the report by a certification statement submitted to the Coordinating Board's Educational Data Center in accordance with the template and instructions provided in the CBM Reporting and Procedures Manual.

(f) Academic Reporting: Ad Hoc Reporting Requests. As necessary to implement this chapter, the Commissioner of Higher Education may determine the need for additional, limited, supplemental requests for data and information from public junior colleges. To the extent Ad Hoc Reporting Requests may determine or influence funding disbursements under this subchapter, the Coordinating Board shall require the reporting official or another Coordinating Board designated official for each public junior college to certify the accuracy of the information contained in the report.

§13.525.Commissioner Review of Required Reporting; Data Reporting Errors.

(a) Upon finalization of fundable certified data, the [~~The~~] Commissioner of Higher Education at his or her discretion or upon recommendation of the Chief Audit Executive may direct Coordinating Board staff to review the accuracy of the data reported to the Coordinating Board by a public junior college under this subchapter using any of the following methods or combination thereof:

(1) The Chief Audit Executive or Coordinating Board staff may conduct periodic file reviews, desk-reviews, site visits, or audits of the accuracy of the data and information submitted for funding purposes, including regular reviews of submitted data carried out through standard data management, supporting data, audits conducted under this subchapter, or as a result of any other audit. Upon identifying a potential data reporting error [~~that may impact formula funding~~], Coordinating Board staff shall notify the Commissioner of Higher Education as soon as practicable.

(2) Upon receiving a notification of a potential data reporting error from the Chief Audit Executive, [or] Coordinating Board staff, or the Chief Executive Officer of a public junior college whose data may be affected [~~of a potential data reporting error~~], the Commissioner of Higher Education may:

(A) direct staff to continue to gather additional information;

(B) determine that the discrepancy does not rise to the level of a data reporting error as defined in this chapter due to the materiality impact of the error; or

(C) determine that the discrepancy rises to the level of a data reporting error that requires a funding adjustment due to the materiality impact of the error or the amount of overallocation or under-allocation.

(b) The Coordinating Board may review and or require correction of a data reporting error that occurred not more than seven years prior to a review conducted by Coordinating Board staff.

(c) Upon the Commissioner of Higher Education's determination that the discrepancy constitutes a data reporting error requiring a funding adjustment, staff will notify the public junior college within thirty (30) [30] business days.

(d) The Commissioner of Higher Education may use any method provided in §13.528 or §13.529 of this subchapter (relating to Recovery of Overallocated Funds and Payment of Under-allocated Funds, respectively) to make the necessary funding adjustments to correct an over- or under-allocation.

§13.528.Recovery of Overallocated Funds.

(a) If the Coordinating Board determines after closing out a fiscal year pursuant to subchapter P, §13.477, of this chapter (relating to Close Out), or any close-out or settle-up provisions contained in subchapter U [S] of this chapter (relating to Community College Finance Program: Forecasting Methodology and Finance Policy), that a data reporting error or any other error resulted in an overallocation of funds to the institution, the Coordinating Board shall use any method authorized under statute or this rule to make a funding adjustment necessary to correct the over-allocation.

(b) The Coordinating Board shall notify the institution not later than thirty (30) [30] business days after the Commissioner of Higher Education makes a determination of a data reporting error under §13.525 of this subchapter (relating to Commissioner Review of Required Reporting; Data Reporting Errors) or otherwise identifies an error requiring a funding adjustment to recover an overallocation. This notification must contain the amount of the overallocation and the basis for the determination.

(c) The institution may submit a written appeal to the Commissioner of Higher Education within thirty (30) [30] business days of receiving notification of an overallocation. The institution may attach any data or other written documentation that supports its appeal. The Commissioner of Higher Education shall review the appeal and determine in his or her sole discretion whether to affirm, deny, or modify the determination of overallocation within thirty (30) [30] business days of receipt. The Commissioner of Higher Education or Chief Audit Executive shall make an annual report of overallocation determinations to the Board.

(d) If the institution does not appeal or the Commissioner of Higher Education affirms the determination that an overallocation requiring a funding adjustment has occurred, the Coordinating Board shall recover an amount equal to the amount overallocated to the public junior college through one of the following methods:

(1) The Coordinating Board shall:

(A) withhold an amount equivalent to the overallocation by withholding from subsequent allocations of state funds for the current fiscal year as part of any [~~the~~] close out or settle up provisions contained in subchapter U of this chapter, or as otherwise authorized by law of the current fiscal year; or

(B) request and obtain a refund from the public junior college during the current fiscal year an amount equivalent to the amount of the overallocation; or

(C) If the Commissioner of Higher Education in his or her sole discretion determines that the recovery of an overallocation in the current or subsequent fiscal year will have a substantial negative impact on the operations of the institution or the education of students, the Commissioner of Higher Education may instead recover the overallocation pursuant to paragraph (2) of this subsection [~~subsection (d)(2) of this section~~].

(2) If the Commissioner of Higher Education in his or her sole discretion determines that an overallocation pursuant to paragraphs (1) or (2) of this subsection [~~section~~] was the result of exceptional circumstances reasonably caused by statutory changes to Texas Education Code, Chapters 130 or 130A, and related reporting requirements, the Coordinating Board may recover the overallocation over a period not to exceed the subsequent five fiscal years.

(e) In addition to the recovery of an over-allocation under this section, the Commissioner of Higher Education may establish a corrective action plan for a public junior college that has received an overallocation of funds.

(f) If the public junior college fails to comply with an agreement to submit a refund established under this section, the Coordinating Board must report to the Comptroller of Public Accounts for recovery pursuant to Texas Education Code, Section 130A.009.

§13.529.Payment of Under-allocated Funds.

If the Commissioner of Higher Education determines that a data reporting error or any other error resulted in an under-allocation of funds, the Coordinating Board shall provide the funds to the institution pursuant to the close-out process in subchapter P, §13.477, of this chapter (relating to Close Out), any close-out or settle up provisions contained in subchapter U [S] of this chapter (relating to Community College Finance Program: Forecasting Methodology and Finance Policy), or as otherwise authorized by law.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402229

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6548

SUBCHAPTER S. COMMUNITY COLLEGE FINANCE PROGRAM: BASE AND PERFORMANCE TIER METHODOLOGY

19 TAC §§13.553 - 13.555, 13.559

The Texas Higher Education Coordinating Board (Coordinating Board) proposes amendments to Texas Administrative Code, Title 19, Part 1, Chapter 13, Subchapter S, §§13.553 - 13.555, and new rule §13.559, concerning the base tier, performance tier, and the rates for the community college finance program. Specifically, these amendments will set the amount of money allocated in a fiscal year for the base tier at 5 percent and for the performance tier at 95 percent. In addition, these rules adopt monetary rates for each fundable outcome achieved by a community college.

Rules 13.553, Definitions, and 13.554, Base Tier Allotment, contain amendments that would establish a 95 to 5 percent split between total allocations in a fiscal year for performance tier and base tier respectively. The performance tier component of the community college finance system is designed to give community colleges financial incentive for successful completion of certain fundable outcomes, like student transfer, dual credit provision, and attainment of credentials of value. The base tier component of the system provides baseline state support for community colleges depending on ability to raise local funds to support operations. These amendments would carry out legislative intent in implementing the new community college finance program, ensuring that state funding is primarily focused on rewarding outcomes serving state, regional, and workforce needs (Texas Education Code, §130A.001).

Rule 13.555, Performance Tier Funding, sets out the major components of the performance tier: to receive funding, institutions must achieve certain types of fundable outcomes, weighted according to certain characteristics, multiplied by the monetary rate for each fundable outcome set in rule. The proposed amendments clarify that the Coordinating Board will determine institutions' weighted fundable outcome completions based on the better of the average of three fiscal years or the current fiscal year. This feature ensures that community colleges may expect predictability in the expected data projections the Coordinating Board will use to determine funding amounts, while still incentivizing exceptional current performance.

Rule 13.559, Performance Tier: Rates, sets the monetary rates for each type of fundable outcome achieved by an institution. These fundable outcomes include the conferring of fundable credentials (including associate degrees, bachelor's degrees, and many types of workforce credentials), the credential of value premium, student completion of 15 dual credit hours, and successful student transfer to a public four-year institution. Rates are generally maintained for consistency with those set for fiscal year 2024 formula funding, with the exception of dual credit attainment and occupational skills awards (OSAs). The dual credit outcome rate is increased to match the transfer outcome rate to reflect the efficacy of dual credit at preparing high school students to enter postsecondary education and avoid penalizing colleges when dual credit students enroll at other institutions after high school. The OSA rate is increased to match the rate for the institutional credential leading to licensure and certification (ICLC) to equally fund the conferral of these two short-term workforce credential types.

The rate for third-party credentials, a new fundable outcome, is set at the same rate as the other short-term workforce credentials. The rate for the Opportunity High School Diploma, another new fundable outcome, is set to match the transfer fundable outcome rate. Rates for the new credential of value premiums are set at 25 percent of the rate for each credential of value baseline to which they apply to reflect the added expenditures for financial aid and other student support that may be associated with helping students complete credentials more quickly and with lower costs.

Emily Cormier, Assistant Commissioner for Funding, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Emily Cormier, Assistant Commissioner for Funding, has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administering the section will be the implementation of legislative intent by fixing specific percentages for base tier funding and performance tier funding under the community college finance program and setting monetary rates for fundable outcomes. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

The amendments are proposed under Texas Education Code, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules as necessary to implement and administer the community college finance program.

The proposed amendments affect Texas Education Code, Chapter 130A.

§13.553.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings:

(1) Academically Disadvantaged--A designation that applies to postsecondary students who have not met the college-readiness standard in one or more Texas Success Initiative (TSI) assessments as provided by §4.57 of this title (relating to Texas Success Initiative Assessment College Readiness Standards), and who were not classified as either waived or exempt pursuant to §4.54 of this title (relating to Exemption).

(2) Adult Learner--A student aged 25 or older on September 1 of the fiscal year for which the applicable data are reported, in accordance with Coordinating Board data reporting requirements.

(3) Advanced Technical Certificate (ATC)--A certificate that has a specific associate or baccalaureate degree or junior level standing in a baccalaureate degree program as a prerequisite for admission. An ATC consists of at least 16 semester credit hours (SCH) and no more than 45 SCH and must be focused, clearly related to the prerequisite degree, and justifiable to meet industry or external agency requirements.

(4) Associate Degree--An academic associate degree as defined under Texas Education Code, §61.003(11), or an applied associate degree as defined under Texas Education Code, §61.003(12)(B).

(5) Baccalaureate Degree--A degree program that includes any grouping of subject matter courses consisting of at least 120 SCH which, when satisfactorily completed by a student, will entitle that student to an undergraduate degree from a public junior college.

(6) Base Tier Funding--The amount of state and local funding determined by the Board for each public junior college that ensures the college has access to a defined level of funding for instruction and operations.

(7) Base Year--The time period comprising the year of contact hours used for calculating the contact hour funding to public junior colleges. The Base Year for a funded fiscal year consists of the reported Summer I and II academic term from the fiscal year two years prior to the funded fiscal year; the Fall academic term one fiscal year prior to the funded fiscal year; and the Spring academic term one fiscal year prior to the funded fiscal year.

(8) Basic Allotment--A calculation of the dollar value per Weighted FTSE, based on appropriations made in that biennium's General Appropriations Act pursuant to §13.554(c) of this subchapter (relating to Base Tier Allotment).

(9) Census Date--The date upon which a college may report a student in attendance for the purposes of formula funding, as specified in the Coordinating Board Management (CBM) manual for the year in which the funding is reported.

(10) Continuing Education Certificate--A credential awarded for completion of a program of instruction that meets or exceeds 360 contact hours and earns continuing education units. The certificate program is intended to prepare the student to qualify for employment; to qualify for employment advancement; or to bring the student's knowledge or skills up to date in a particular field or profession; and is listed in an institution's approved program inventory.

(11) Credential of Value Baseline--A credential earned by a student that would be expected to provide a positive return on investment. Credential of Value Baseline methodology is described in §13.556 of this subchapter (relating to Performance Tier: Fundable Outcomes).

(12) Credential of Value Premium Fundable Outcome--A fundable outcome earned by an institution for a credential earned by a student that would be expected to provide a wage premium. Credential of Value Premium methodology is described in §13.556 of this subchapter.

(13) Credentialing Examination--A licensure or registration exam required by a state or national regulatory entity or a certification exam required by an authorized professional organization. An authorized professional organization is a national, industry-recognized organization that sets occupational proficiency standards, conducts examinations to determine candidate proficiency, and confers an industry-based certification.

(14) Dual Credit or Dual Enrollment Fundable Outcome--An outcome achieved when a student earns at least 15 SCH or the equivalent of fundable dual credit or dual enrollment courses, defined as follows:

(A) Courses that qualify as dual credit courses as defined in §4.83(10) of this title (relating to Definitions); and:

(i) In fiscal year 2025 or later, apply toward an academic or career and technical education program requirement at the postsecondary level; or

(ii) In fiscal Year 2025 or later are completed by a student who graduates with a Texas First Diploma, as codified in chapter 21, subchapter D of this title (relating to Texas First early high school completion program).

(B) All dual credit courses taken by a student enrolled in an approved Early College High School program, as provided by Texas Education Code, §28.009, except a physical education course taken by a high school student for high school physical education credit.

(15) Economically Disadvantaged--A designation that applies to postsecondary students who received the federal Pell Grant under 20 U.S.C. §1070a.

(16) Equivalent of a Semester Credit Hour--A unit of measurement for a continuing education course, determined as a ratio of one continuing education unit to 10 contact hours of instruction, which may be expressed as a decimal. One semester credit hour of instruction equals 1.6 continuing education units of instruction. In a continuing education course, not fewer than 16 contact hours are equivalent to one semester credit hour.

(17) Formula Funding--The funding allocated by the Coordinating Board among all public junior colleges by applying provisions of the Texas Education Code, agency rule, and the General Appropriations Act to a sector-wide appropriation from the General Appropriations Act.

(18) Full-Time Student Equivalent (FTSE)--A synthetic measure of enrollment based on the number of instructional hours delivered by an institution of higher education divided by the number of hours associated with full-time enrollment for the time period in question.

(19) Fundable Credential--As defined in §13.556(b) of this subchapter.

(20) Fundable Outcome Weights--A multiplier applied to eligible fundable outcomes to generate a Weighted Outcome Completion for use in determining the Performance Tier allocation. The methodology for each Fundable Outcome Weight is defined in §13.557 of this subchapter (relating to Performance Tier: Fundable Outcome Weights).

(21) High-Demand Fields--A field in which an institution awards a credential that provides a graduate with specific skills and knowledge required for the graduate to be successful in a high-demand occupation, based on the list of high-demand fields as defined in subchapter T of this chapter (relating to Community College Finance Program: High-Demand Fields).

(22) Institutional Credentials Leading to Licensure or Certification (ICLC)--A credential awarded by an institution upon a student's completion of a course or series of courses that represent the achievement of identifiable skill proficiency and leading to licensure or certification. This definition includes a credential that meets the definition of an Occupational Skills Award in all respects except that the program may provide training for an occupation that is not included in the Local Workforce Development Board's Target Occupations list.

(23) Level 1 Certificate--A certificate designed to provide the necessary academic skills and the workforce skills, knowledge, and abilities necessary to attain entry-level employment or progression toward a Level 2 Certificate or an Applied Associate Degree, with at least 50% of course credits drawn from a single technical specialty. A Level 1 Certificate must be designed for a student to complete in one calendar year or less time and consists of at least 15 semester credit hours and no more than 42 semester credit hours.

(24) Level 2 Certificate--A certificate consisting of at least 30 semester credit hours and no more than 51 semester credit hours. Students enrolled in Level 2 Certificates must demonstrate meeting college readiness standards set forth in §4.57 of this title and other eligibility requirements determined by the institution.

(25) Local Share--The amount determined to be the institution's contribution of local funds to the Instruction and Operations (I&O) amount for each public junior college. The amount consists of estimated ad valorem maintenance and operations tax revenue and tuition and fees revenue, as determined by the Board.

(26) Non-Formula Support Item--An amount appropriated by line item in the General Appropriations Act to a single public junior college or limited group of colleges for a specific, named purpose.

(27) Occupational Skills Award (OSA)--A sequence of courses that meet the minimum standard for program length specified by the Texas Workforce Commission for the federal Workforce Innovation and Opportunity Act (WIOA) program (9-14 SCH for credit courses or 144-359 contact hours for workforce continuing education courses). An OSA must possess the following characteristics:

(A) The content of the credential must be recommended by an external workforce advisory committee, or the program must provide training for an occupation that is included on the Local Workforce Development Board's Target Occupations list;

(B) In most cases, the credential should be composed of Workforce Education Course Manual (WECM) courses only. However, non-stratified academic courses may be used if recommended by the external committee and if appropriate for the content of the credential;

(D) The credential prepares students for employment in accordance with guidelines established for the Workforce Innovation and Opportunity Act.

(28) Opportunity High School Diploma Fundable Outcome--An alternative means by which adult students enrolled in a workforce program at a public junior college may earn a high school diploma at a college through concurrent enrollment in a competency-based program, as codified in Texas Education Code, chapter 130, subchapter O, and Texas Administrative Code, Title 19, Part 1, Chapter 12.

(29) Semester Credit Hour (SCH)--A unit of measure of instruction, represented in intended learning outcomes and verified by evidence of student achievement, that reasonably approximates one hour of classroom instruction or direct faculty instruction and a minimum of two hours out of class student work for each week over a 15-week period in a semester system or the equivalent amount of work over a different amount of time. An institution is responsible for determining the appropriate number of semester credit hours awarded for its programs in accordance with Federal definitions, requirements of the institution's accreditor, and commonly accepted practices in higher education.

(30) Structured Co-Enrollment Fundable Outcome--A student who earns at least 15 semester credit hours at the junior college district in a program structured through a binding written agreement between a general academic teaching institution and a community college. Under such a program, students will be admitted to both institutions and recognized as having matriculated to both institutions concurrently. The Structured Co-enrollment Fundable Outcome does not include courses fundable under the Dual Credit or Dual Enrollment Fundable Outcome.

(31) Third-Party Credential--A certificate as defined in Texas Education Code, §61.003(12)(C), that is conferred by a third-party provider. The third-party provider of the certificate develops the instructional program content, develops assessments to evaluate student mastery of the instructional content, and confers the third-party credential. A third-party credential that meets the requirements of §13.556 of this subchapter is fundable in accordance with that section.

(32) Transfer Fundable Outcome--An institution earns a fundable outcome in the Performance Tier under §13.555 of this subchapter (relating to Performance Tier Funding) when a student enrolls in a general academic teaching institution, as defined in Texas Education Code, §61.003, after earning at least 15 semester credit hours from a single public junior college district as established under §13.556(e) of this subchapter. For the purpose of this definition, semester credit hours (SCH) shall refer to semester credit hours or the equivalent of semester credit hours.

(33) Weighted Full-Time Student Equivalent (Weighted FTSE or WFTSE)--A synthetic measure of enrollment equal to the number of instructional hours delivered by an institution of higher education divided by the number of hours associated with full-time enrollment for the fiscal year two years prior to the one for which formula funding is being calculated, where the hours delivered to students with certain characteristics carry a value other than one.

(34) Weighted Outcomes Completion--A synthetic count of completions of designated student success outcomes where outcomes achieved by students with certain characteristics carry a value other than one. The synthetic count may also represent a calculation, such as an average or maximizing function, other than a simple sum.

§13.554.Base Tier Allotment.

(a) Coordinating Board staff will calculate Base Tier funding for each public junior college district (district) as the greater of the Instruction and Operations (I&O) amount minus Local Share and zero.

(b) A district's I&O amount is the sum of the number of Weighted Full-Time Student Equivalents (Weighted FTSE) enrolled at the district multiplied by the Basic Allotment amount calculated by the Commissioner of Higher Education as provided in subsection (c) of this section and the district's total Contact Hour Funding as determined by the Coordinating Board.

(1) Weighted FTSE for each district is the sum of the district's full-time student equivalents weighted for the student characteristics under subparagraph (B) of this paragraph and the scale adjustment as provided in Texas Education Code, §130A.054.

(A) For purposes of determining annual Weighted FTSE as a component of formula funding for the fiscal year under this section, a district's full-time student equivalents (FTSE) is equal to the sum of:

(i) the total semester credit hours in which for-credit students were enrolled at the district as of the census dates of all academic semesters or other academic terms that were reported for the fiscal year two years prior, divided by 30; and

(ii) the total contact hours in which continuing education students were enrolled at the district as of the census dates of all academic semesters or other academic terms that were reported for the fiscal year two years prior, divided by 900.

(B) The Coordinating Board shall apply a weight to the calculation of Weighted FTSE as follows:

(i) if a student is classified as economically disadvantaged during the fiscal year two years prior, FTSE generated by that student shall have an additional value of 25%;

(ii) if a student is classified as academically disadvantaged during the fiscal year two years prior, FTSE generated by that student shall have an additional value of 25%; and

(iii) if a student is classified as an adult learner on September 1 of the fiscal year two years prior, FTSE generated by that student shall have an additional value of 50%.

(C) The Coordinating Board calculates a district's scale adjustment weight as the greater of the difference between 5,000 and the number of FTSE as defined in subparagraph (A) of this paragraph multiplied by .40, and zero.

(2) For the purpose of calculating formula funding amounts for the fiscal year, Coordinating Board staff will calculate Contact Hour Funding for a public junior college district by first multiplying the number of reported certified fundable contact hours generated by the district in each discipline during the Base Year of the fiscal year by the average cost of delivery per contact hour for each discipline respectively as described in the Report of Fundable Operating Expenses in accordance with §13.524(c) of this chapter (relating to Required Reporting) and summing across all disciplines. Contact hours attributable to students enrolled in a junior-level or senior-level course are weighed in the same manner as a lower division course in a corresponding field. That sum will then be multiplied by a rate calculated by the Commissioner of Higher Education as provided in subsection (c) of this section in accordance with the General Appropriations Act to calculate the district's Contact Hour Funding.

(c) For purposes of determining the rate to be used for the Basic Allotment and the rate to be used for calculating districts' Contact Hour Funding, the Commissioner shall calculate the Basic Allotment and the rate to be used for calculating districts' Contact Hour Funding such that the rates necessary to maintain an equal split between: [~~Contact Hour Funding and Basic Allotment Funding for the fiscal year.~~]

(1) Contact Hour Funding and is equivalent to Basic Allotment Funding for the fiscal year; and

(2) The sum of base tier funding to all districts for the fiscal year equals one-nineteenth of the sum of performance tier foundation payments calculated using funding certified data as described in subchapter U of this chapter (relating to Community College Finance Program: Forecasting Methodology and Finance Policy) by June 1 prior to the fiscal year.

(3) The Commissioner may modify the base tier funding on a pro rata basis in accordance with this subsection to account for any changes to performance tier totals arising from any amendments to rule adopted by the Board between June 1 and the beginning of the fiscal year.

(d) For the purpose of calculating formula funding amounts for the fiscal year, the Local Share for each public junior college district equals the sum of:

(1) the estimated amount of revenue that would have been generated by the district if it had assessed a $0.05 maintenance and operations ad valorem tax on each $100 of taxable property value in its taxing district, as reported under §13.524 of this chapter, which the Coordinating Board will calculate as the district's current tax collection for fiscal year two years prior multiplied by the ratio of the maintenance and operations tax rate to the total tax rate, divided by the product of the maintenance and operations tax rate and 100 and multiplied by five; and

(2) the amount of tuition and fee revenue calculated as the sum of:

(A) the district's FTSE two fiscal years prior as defined in subsection (b)(1)(A) of this section, except for semester credit hours derived from students enrolled in dual credit or dual enrollment courses, multiplied by a rate calculated by the Commissioner of Higher Education, which is the enrollment-weighted statewide average of tuition and fees charges to full-time equivalent students residing within the district of the public junior college they attend, as reported by the public junior colleges in the Integrated Fiscal Reporting System for the fiscal year two fiscal years prior; and

(B) the total semester credit hours of dual credit courses in which students were enrolled as of the census dates of all academic semesters or other academic terms that were reported in the fiscal year two years prior, multiplied by the Financial Aid for Swift Transfer (FAST) tuition rate as codified in §13.504 of this chapter (relating to Financial Aid for Swift Transfer (FAST) Tuition Rate) in the fiscal year two years prior. For fiscal year 2023, the FAST tuition rate is equal to the rate for fiscal year 2024.

§13.555.Performance Tier Funding.

(a) Each public junior college district shall receive Performance Tier funding under Texas Education Code, chapter 130A, subchapter C. A district increases its Performance Tier funding amount by producing Fundable Outcomes, with Fundable Outcomes achieved in certain categories eligible for an additional multiplier (Fundable Outcome Weights), as calculated by the Coordinating Board. A Fundable Outcome multiplied by the Fundable Outcome Weight constitutes a Weighted Outcome Completion. A district's Performance Tier funding amount equals the total of each Weighted Outcome Completion multiplied by the funding rates for that completion, as identified in §13.559 of this subchapter (relating to Performance Tier: Rates). Funding rates include an additional weight for fundable credentials delivered in a high-demand field.

(b) Fundable Outcomes. Section 13.556 of this subchapter (relating to Performance Tier: Fundable Outcomes) defines each Fundable Outcome type, including the methodology used to calculate each outcome.

(c) Fundable Outcome Weight. Section 13.557 of this subchapter (relating to Performance Tier: Fundable Outcome Weights) and subchapter T of this chapter (relating to Community College Finance Program: High-Demand Fields) define each Fundable Outcome Weight type, including the methodology used to calculate each outcome. Fundable Outcome Weights consist of the following categories:

(1) Fundable Outcomes achieved by economically disadvantaged students;

(2) Fundable Outcomes achieved by academically disadvantaged students; and

(3) Fundable Outcomes achieved by adult learners.

(d) For the purposes of calculating Weighted Outcome Completions for formula funding amounts for a fiscal year, the Coordinating Board shall calculate the funded number of Weighted Outcome Completions as the greater of the average of the district's Weighted Outcome Completion counts for the fiscal year being funded and two fiscal years prior, as calculated by subchapter U of this chapter (relating to Community College Finance Program: Forecasting Methodology and Finance Policy), and the count for the fiscal year being funded, as calculated according to subchapter U.

(e) Fundable Outcome Rates. Section 13.558 of this subchapter (relating to Performance Tier: High-Demand Fields) and §13.559 of this subchapter (relating to Performance Tier: Rates) defines fundable outcomes awarded in a high-demand field and the rates for each fundable outcome, including the higher rate for fundable credentials awarded in a high demand field.

§13.559.Performance Tier: Rates.

An institution receives the following rate for each fundable outcome, weighted according to the applicable provisions of §13.557 of this subchapter (relating to Performance Tier: Fundable Outcome Weights).

Figure: 19 TAC §13.559 (.pdf)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402227

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6548

SUBCHAPTER S. COMMUNITY COLLEGE FINANCE PROGRAM

19 TAC §§13.560 - 13.562

The Texas Higher Education Coordinating Board (Coordinating Board) proposes the repeal of Texas Administrative Code, Title 19, Part 1, Chapter 13, Subchapter S, §§13.560 - 13.562, concerning formula transition funding, payment schedules, and limitations on spending. Specifically, this repeal will reorganize rules relating to public junior college finance in order to group rules by thematic content. The Coordinating Board intends to adopt a separate forthcoming subchapter relating to financial allocations for public junior colleges; this forthcoming chapter will contain the content of the rules proposed for repeal instead.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Emily Cormier, Assistant Commissioner for Funding, has also determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of administering the section will be to improve readability of the rules through reorganization, by categorizing all rules related to financial allocations for the public junior college finance system in a forthcoming separate subchapter. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

The repeal is proposed under Texas Education Code, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules and take other actions consistent with Texas Education Code, Chapter 61, Chapter 130, and Chapter 130A to implement Tex. H.B. 8, 88th Leg., R.S. (2023).

The proposed repeal affects Texas Education Code, Sections 130.0031 and 130A.007.

§13.560.Formula Transition Funding.

§13.561.Payment Schedule.

§13.562.Limitations on Spending.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402228

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6548

SUBCHAPTER U. COMMUNITY COLLEGE FINANCE PROGRAM: FORECASTING METHODOLOGY AND FINANCE POLICY

19 TAC §§13.620 - 13.630

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new rules in Texas Administrative Code, Title 19, Part 1, Chapter 13, Subchapter U, §§13.620 - 13.630, concerning timeline of payments, methodologies, and processes necessary to calculate state formula funding for public community colleges. Specifically, these new sections will establish the structure necessary for a dynamic payment system, including parameters for forecasting and payment schedules for the coming fiscal years. The new dynamic payment system will minimize both the lag time between when colleges achieve fundable outcomes and when they receive performance funding and the impact from the changes to state funding that may result.

Rule 13.620, Purpose, states the purpose of the subchapter, which is to establish definitions, timeline of payments, methodologies, and other processes necessary to calculate and distribute formula funding to community colleges.

Rule 13.621, Authority, states the authority for the subchapter, contained in Texas Education Code, §130A.005. This provision allows the Coordinating Board to adopt rules to implement the State Public Junior College Finance Program, with relevant provisions in Texas Education Code, Chapters 61, 130, and 130A.

Rule 13.622, Applicability, establishes that, unless otherwise provided, the version of Subchapter U that was applicable to a fiscal year's formula funding is applicable to any adjustments to that funding that may be made during the subsequent fiscal year. This provides a reliable basis for colleges to estimate the future funding implications of strategic investments and programming decisions.

Rule 13.623, Definitions, list the definitions pertinent to the timeline of payments, forecasting outcomes, and the calculation of payments. The definitions include:

Certified Outcomes are the number of times a fundable outcome, as defined by Subchapter S, has occurred for a given year according to certified data.

Close Out Adjustment is defined as the amount of change between forecasting-based formula funding, inclusive of adjustments, and formula funding recalculated using entirely actual outcomes data instead of forecasted outcomes. This adjustment is applied to the first formula payment of the subsequent fiscal year.

Dynamic Adjustment is the update to the forecast-based formula funding for the current fiscal year that, if positive, is applied to the second of three payments in a fiscal year using more recent actual outcomes data to replace some forecasted outcomes and reforecast others.

Fundable Certified Data is data after May 1 of a fiscal year used to calculate formula funding for the next fiscal year. This is distinct from Certified Outcomes because institutions may correct their certified data after they submit it to the Coordinating Board. May 1 is a reasonable, operationally necessary deadline for these corrections to end, enabling official formula funding calculations to begin.

Foundation Payment is the term used to describe the sum of Base Tier and Performance Tier funding for a community college district in a fiscal year.

Error Adjustment is a correction to formula funding that takes place after the Close Out Adjustment.

Institution and Public Junior College are terms used to refer to the public community colleges.

Preliminary Outcomes are those outcomes used to calculate the dynamic adjustment, which is a mid-year correction to formula funding using less forecasted data and more actual data.

Settle Up Adjustment is the update to forecasting-based formula funding for the prior fiscal year that, if positive, is applied to the second of three payments in a fiscal year using more recent actual outcomes data to replace some forecasted outcomes and reforecast others.

Rule 13.624, Forecasting Fundable Outcomes, establishes the methodology by which fundable outcomes are forecasted. The methodology is time series projection with additive exponential triple smoothing towards the regression line where the independent variable is the year and the dependent variable is the performance for a given outcome. This method puts additional weight on more recent outcomes and accounts for seasonal patterns. The forecasted outcomes are bounded such that they cannot increase by more than 10 percent or decrease by 5 percent relative to the previous year, with an exception to provide an estimate when the value for the previous year is zero. Forecasts for the outcomes subtypes Academic Disadvantage, Economic Disadvantage, Adult Learner, and High-Demand Field assume that the ratio of total outcomes to each subtype outcome in the historical data is the same for the forecasted years.

Rule 13.625, Schedule and Composition of Payments for Fiscal Year 2025, establishes the specific structure of payments for FY 2025. For FY 2025 all non-formula funding would be distributed by September 25. Formula funding would be distributed in three payments: 50 percent of total formula funding in October (inclusive of any FY 2024 Close Out Adjustment amounts), 25 percent in February (inclusive of the FY 2025 Dynamic Adjustment), and 25 percent in June. The June payment may be prorated to bring total formula funding within legislative appropriation for community college formula funding. The addition of the Dynamic Adjustment in the spring payment creates a financial feedback mechanism at the earliest opportunity under the data collection timeline while avoiding undue disruption to college operations.

Rule 13.626, Schedule and Composition of Payments for Fiscal Year 2026, establishes the specific structure of payments for the indicated fiscal years. For FY 2026 all non-formula funding would be distributed by September 25. Formula funding would be distributed in three payments; 50 percent of total formula funding in October (inclusive of any FY 2025 Projected Settle Up Adjustment amounts), 25 percent in February (inclusive of the Dynamic Adjustment and FY 2025 Settle Up Adjustment amounts), and 25 percent in June. The rule establishes that the Commissioner of Higher Education may adjust any payment under this schedule to ensure that a college receives the amount it is entitled to. The addition of the Projected Settle Up Adjustment in the fall payment creates the first instance when formula funding can be reduced in response to performance that fails to meet projections. It includes two key safeguard features: it uses only fundable certified outcomes, whereas mid-year, positive-only adjustments can be made with preliminary outcomes; and it is applied to the first payment of a fiscal year, providing colleges with adequate notice of their upcoming funding for budget and planning purposes.

Rule 13.627, Schedule and Composition of Payments Beginning Fiscal Year 2027, establishes the specific structure of payments for all fiscal years beginning in FY 2027. All non-formula funding would be distributed by September 25. Formula funding would be distributed in three payments; 50 percent of total formula funding in October (inclusive of any prior-year Projected Settle Up Adjustment amounts and Close Out Adjustments from two years prior), 25 percent in February (inclusive of the Dynamic Adjustment and prior-year Settle Up Adjustment amounts), and 25 percent in June. The June payment may be prorated to bring total formula funding within the amount appropriated by the legislature for community college formula funding. The Close Out Adjustment in the first payment provides the final alignment between the sum of performance payments and adjustments for the fiscal year two years prior and performance funding based entirely on fundable certified outcomes data from that year.

Rule 13.628, Substantial Negative Impacts, establishes that the Commissioner of Higher Education may apply required reductions in performance funding over a longer period of time as governed by the data error policy should the Commissioner of Higher Education determine that the standard settle-up or close-out process would have a substantial negative impact on an institution's operations or students.

Rule 13.629, Formula Transition Funding, establishes that after calculating the base tier and performance tier funding for each community college, the Coordinating Board shall ensure that a community college district does not receive less in formula funding in FY 2025 than it received in FY 2023 appropriations for formula funding (contact hours, success points, core operations, and bachelor's of applied technology funding) and need-based supplements. The proposed new rule moves an existing formula transition funding provision from Subchapter S to Subchapter U, as the subject matter more closely pertains to payment provisions. This provision smooths the transition from the prior system of formula funding predominantly based on contact hour generation to the new system of performance-based funding. It ensures that no institution will experience a significant detrimental impact on its operations as the new system adjusts funding and moves to outcome-driven performance.

Rule 13.630, Limitations on Spending, describes the restrictions on how community college districts may expend state-appropriated funds, in alignment with state statute (Texas Education Code, §130.003(c); General Appropriations Act, 88th Leg. R.S., H.B. 1, art. III-231, ch. 1170, Rider 14). The Coordinating Board proposes this provision in response to requests from stakeholders for greater clarification of permissible expenditures. The proposed new rule moves existing limitations on spending provision from Subchapter S to Subchapter U, as the subject matter more closely pertains to payment-related provisions.

Emily Cormier, Assistant Commissioner for Funding, has determined that for each of the first five years the sections are in effect there could be fiscal implications for state appropriations depending on overall performance and student outcomes in the system as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There is no impact on small businesses, micro businesses, and rural communities. There is no anticipated impact on local employment.

Emily Cormier, Assistant Commissioner for Funding, has also determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administering the sections will be to establish a forecasting methodology and dynamic payment system for community colleges, and therefore minimizing the lag time between when colleges achieve fundable outcomes and when they receive performance funding and the impact from the changes to state funding that may result. There are no anticipated economic costs to persons who are required to comply with the sections as proposed.

Government Growth Impact Statement

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules could result in an increase in state appropriations depending on overall performance and student outcomes in the system;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will not limit an existing rule;

(7) the rules will not change the number of individuals subject to the rule; and

(8) the rules will not affect this state's economy.

The new sections are proposed under Texas Education Code, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules to carry out the Public Junior College State Finance Program.

The proposed new sections affect Texas Education Code, Chapter 130A, and Sections 61.059 and 130.0031.

§13.620.Purpose.

The purpose of this subchapter is to establish the definitions, timeline of payments, methodologies, and processes necessary to calculate and distribute state formula funding under the State Public Junior College Finance Program (the Program).

§13.621.Authority.

The Coordinating Board adopts this subchapter pursuant to Texas Education Code, §130A.005, requiring the Coordinating Board to adopt rules to implement the Community College Finance Program created in Texas Education Code, chapters 61, 130, and 130A.

§13.622.Applicability.

Unless otherwise provided, the Coordinating Board shall apply the rules in effect during a fiscal year to any payment adjustment based on differences between prior payments and payments recalculated as provided by this subchapter, including any adjustment made after the fiscal year has ended.

§13.623.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings:

(1) Certified Outcomes--Data reported by each institution for the number of fundable outcomes, or used to calculate the number of fundable outcomes, as defined by subchapter S of this chapter (relating to Community College Finance Program: Base and Performance Tier Methodology), generated in a prior fiscal year as required by a Coordinating Board rule, reporting manual, or other data submission instructions.

(2) Close-Out Adjustment--The amount added to or subtracted from the first formula funding payment made to a public junior college in a fiscal year to account for variance between the sum of all foundation payments and adjustments for a prior fiscal year and the recalculation of the performance tier portion of the foundation payment, in accordance with §13.555 of this chapter (relating to Performance Tier Funding), for the fiscal year based exclusively on fundable certified outcomes data. The first application of the close out adjustment will be to FY 2027 funding based on variance in FY 2025 funding.

(3) Dynamic Adjustment--The amount added to the second formula funding payment made to a public junior college in a fiscal year in the amount by which the foundation payment for that fiscal year as initially calculated is less than the recalculation of the foundation payment using data, including preliminary outcomes data, that have become available since the initial calculation. Dynamic adjustments may not be a negative amount.

(4) Error Adjustment--An ad hoc funding adjustment made by the Coordinating Board after the close-out adjustment to account for data or processing errors discovered after the close-out adjustment, as authorized by subchapter R of this chapter (relating to State Public Junior College Finance Program: Reporting, Audit, and Overallocation).

(5) Foundation Payment--The total of the base and performance tier payments to which a public junior college may be entitled for a given fiscal year, calculated by application of methodologies prescribed in subchapter S of this chapter (relating to Community College Finance Program: Base and Performance Tier Methodology). The Commissioner of Higher Education shall calculate the foundation payment for a fiscal year at the level calculated as of June 1 prior to the start of the fiscal year unless the Commissioner of Higher Education determines that calculation on that date could result in inaccurate funding to one or more institutions.

(6) Fundable Certified Data--Data reported by a public junior college for which both the certification date specified in the applicable rule or reporting manual or other data submission instructions and the date of May 1 of the current fiscal year have passed. The Coordinating Board shall use Fundable Certified Data as of May 1 of the current fiscal year to calculate the foundation payment amount for the next fiscal year.

(7) Institution--In this subchapter. means a public junior college, public junior college district, or community college as defined in Texas Education Code, chapters 130 or 130A, unless expressly provided otherwise.

(8) Preliminary Outcomes--The Coordinating Board shall calculate the preliminary outcomes based on data on the number of fundable outcomes reported by public junior colleges generated in the prior year for the purpose of calculating the dynamic adjustment and settle-up adjustment.

(9) Public Junior College--In this subchapter, means a public junior college, public junior college district, or community college as defined in Texas Education Code, chapters 130 or 130A, unless expressly provided otherwise.

(10) Settle-Up Adjustment--The amount added or subtracted to a college's current-year funding to account for variance between the prior-year foundation payment plus dynamic adjustment and the recalculation of the prior-year foundation payment based on preliminary data from the prior year itself. The Settle-Up Adjustment first applies to FY 2026 when the FY 2025 forecast is compared to FY 2025 preliminary outcomes.

§13.624.Forecasting Fundable Outcomes.

(a) Purpose. The purpose of this section is to establish the methodology for forecasting fundable performance outcomes to calculate performance tier funding amounts covering a time period for which performance data are not yet available. The Coordinating Board shall forecast each fundable performance outcome as defined under §13.556 of this chapter (relating to Performance Tier: Fundable Outcomes), except those set out under §13.553(28) and (31) of this chapter (relating to Definitions) for each public junior college using historical performance data. The Coordinating Board shall use these figures to calculate each performance tier payment for the funded fiscal year as established under §13.555 of this chapter (relating to Performance Tier Funding).

(b) Methodology. The Coordinating Board shall forecast the total annual count of a fundable performance outcome for a public junior college using the exponential triple smoothing method of trend analysis with additive error, trend, and seasonality parameters applied to time series data. This time series data shall use fundable certified data with the counts of fundable outcomes achieved annually by the public junior college during no fewer than the six most recent years for which data are available except as otherwise provided by subsection (c) of this section.

(c) Other time series data. The time series data for forecasting Occupational Skills Awards and Institutional Credentials Leading to Licensure or Certification shall use fundable certified data with the counts of each fundable outcome achieved annually by a public junior college during no fewer than the four most recent fiscal years for which data are available.

(d) Bounded projections. The forecasted total annual count of a fundable performance outcome for a fiscal year shall not exceed 110 percent nor be less than 95 percent of the count for the prior year. If the count for the prior year is also a forecasted value, then the maximum allowable change for the current year shall be calculated against the prior year's forecasted value as adjusted pursuant to this rule. If the value for a fundable performance outcome for the most recent actual, not forecasted data is zero, the forecast shall not be bounded in the next fiscal year. In no circumstances may an estimated fundable performance outcome be negative.

(e) As provided by §13.556 of this chapter, the Coordinating Board shall forecast the number of each fundable credential in a high-demand field, as defined under subchapter T of this chapter (relating to Community College Finance Program: High-Demand Fields), for a fiscal year by multiplying the average annual percentage of the credential conferred in a high-demand field in the credential's time series data by the total count of the credential forecast to be conferred in that year.

(f) As provided by §13.556 of this chapter, the Coordinating Board shall forecast the number of each fundable credential conferred to students who are academically disadvantaged, economically disadvantaged, and adult learners, as provided by §13.557 of this chapter (relating to Performance Tier: Fundable Outcome Weights), for a fiscal year by multiplying the average percentage of the credential conferred by the institution to students in each respective subgroup in the credential's time series data by the total count of the credential forecast to be conferred by the institution in that year.

§13.625.Schedule and Composition of Payments for Fiscal Year 2025.

(a) Non-Formula Support Items. For the purpose of distributing state appropriations to a public junior college in fiscal year 2025, the Coordinating Board shall distribute the full amount of all fiscal year non-formula support items appropriated to the institution in accordance with the provisions of the General Appropriations Act in effect for the biennium by September 25 of the fiscal year. The Coordinating Board shall recover any overallocation or adjust any installment required to comply with state law or Board rules.

(b) Formula Funding Amounts: Fall. For the purpose of distributing state appropriations to an institution in fiscal year 2025, the Coordinating Board shall distribute to each institution by October 15:

(1) FY 2025 Foundation payment: one-half of the foundation payment the Coordinating Board determines the institution may be entitled to receive in fiscal year 2025, including:

(A) Base tier funding for fiscal year 2025;

(B) Performance tier funding calculated using fundable certified performance outcomes data from fiscal year 2023; and

(C) Performance outcomes for fiscal years 2024 and 2025 forecasted pursuant to §13.624 of this subchapter (relating to Forecasting Fundable Outcomes).

(2) FY 2024 Close Out: In accordance with §13.477 of this part (relating to Close Out), the Coordinating Board shall close out fiscal year 2024.

(c) Formula Funding Amounts: Spring. For the purpose of distributing state appropriations to a public junior college in fiscal year 2025, the Coordinating Board shall distribute to each district by February 15, 2025:

(1) FY 2025 Foundation Payment: one-quarter of the foundation payment as described in subsection (b)(1) of this section.

(2) FY 2025 Dynamic Adjustment: the full positive amount by which the performance tier funding of the foundation payment as provided by subsection (b)(1) of this section is less than a calculation of performance tier funding using:

(A) fundable certified performance outcomes data from fiscal year 2023;

(B) preliminary outcomes data from 2024; and

(C) performance outcomes for all other elements for fiscal years 2024 and 2025 forecasted pursuant to §13.624 of this subchapter.

(d) Formula Funding Amounts: Summer. For the purpose of distributing state appropriations to a public junior college in fiscal year 2025, the Coordinating Board shall distribute to each junior college by a date as soon as is practicable after June 15, in accordance with the appropriations process, one-quarter of the foundation payment as described in subsection (b)(1) of this section, which amount may be multiplied by a number less than one as necessary to prevent formula funding distributions to institutions from exceeding state appropriations for such purpose, pursuant to the provisions of the General Appropriations Act, Texas Education Code, and all other applicable statutes and rules.

(e) The Commissioner of Higher Education may modify any installment under this schedule as necessary to provide an institution with the amount to which the institution is entitled under Texas Education Code, chapters 130 and 130A, the General Appropriations Act, a supplemental appropriations act, or chapter 13 of this title.

§13.626.Schedule and Composition of Payments for Fiscal Year 2026.

(a) Non-Formula Support Items. For the purpose of distributing state appropriations to a public junior college in fiscal year 2026, the Coordinating Board shall distribute the full amounts of all fiscal year 2026 non-formula support items appropriated to the institution to in accordance with the provisions of the General Appropriations Act in effect for the biennium by September 25, 2025, or on a date as required by the General Appropriations Act. The Coordinating Board shall recover any overallocation or adjust any installment required to comply with state law or Board rules.

(b) Formula Funding Amounts: Fall. For the purpose of distributing state appropriations to a public junior college in fiscal year 2026, the Coordinating Board shall distribute to each district by October 15, 2025:

(1) FY 2026 Foundation Payment: one-half of the foundation payment the Coordinating Board determines the district may be entitled to receive in fiscal year 2026, including:

(A) Base tier funding for fiscal year 2026;

(B) performance tier funding calculated using funding certified performance outcomes data from fiscal year 2024 and performance outcomes for fiscal years 2025 and 2026 forecasted pursuant to §13.624 of this subchapter (relating to Forecasting Fundable Outcomes).

(2) Projected FY 2025 Settle-Up: the Coordinating Board shall add the full amount, including if such amount is a negative number, of:

(A) fiscal year 2025 performance tier funding calculated using fundable certified performance outcomes data from fiscal years 2023 and 2024 and performance outcomes for fiscal year 2025 forecasted pursuant to §13.624 of this subchapter; minus

(B) the sum of performance tier funding payments made under the fiscal year 2025 foundation payments and dynamic adjustment.

(c) Formula Funding Amounts: Spring. For the purpose of distributing state appropriations to a public junior college district in fiscal year 2026, the Coordinating Board shall distribute to each district by February 15, 2026:

(1) FY 2026 Foundation Payment: one-quarter of the foundation payment as described in (b)(1) of this subsection.

(2) FY 2026 Dynamic Adjustment: the full positive amount by which fiscal year 2026 performance tier funding of the foundation payment as described in (b)(1) of this subsection is less than a calculation of performance tier funding using:

(A) funding certified performance outcomes data from fiscal year 2024;

(B) preliminary outcomes data from fiscal year 2025; and

(C) Performance outcomes for all other required data elements for fiscal years 2025 and 2026 forecasted pursuant to §13.624 of this subchapter.

(3) FY 2025 Settle-Up Adjustment: the full positive amount of the difference between:

(A) fiscal year 2025 performance tier funding calculated using:

(i) fundable certified performance outcomes data from fiscal years 2023 and 2024;

(ii) preliminary outcomes from fiscal year 2025; and

(iii) performance outcomes for all other elements for fiscal year 2025 forecasted pursuant to §13.624 of this subchapter; minus

(B) the sum of performance tier funding payments made under the fiscal year 2025 foundation payments, the fiscal year 2025 dynamic adjustment, and the projected fiscal year 2025 settle-up.

(d) Formula Funding Amounts: Summer. For the purpose of distributing state appropriations to a public junior college district in fiscal year 2026, the Coordinating Board shall distribute to each district by June 15, 2026, one-quarter of the FY 2026 foundation payment as described in (b)(1) of this subsection.

(e) The Commissioner of Higher Education may modify any installment under this schedule as necessary to provide an institution with the amounts to which the institution is entitled under Texas Education Code, chapters 130 and 130A, the General Appropriations Act, a supplemental appropriations act, or chapter 13 of this title (relating to Financial Planning).

§13.627.Schedule and Composition of Payments Beginning Fiscal Year 2027.

(a) Non-Formula Support Items. For the purpose of distributing state appropriations to a public junior college in a fiscal year, the Coordinating Board shall distribute the full amount of all fiscal year non-formula support items appropriated to the institution tin accordance with the provisions of the General Appropriations Act in effect for the biennium by September 25 of the fiscal year, or on a date as required by the General Appropriations Act. The Coordinating Board shall recover any overallocation or adjust any installment required to comply with state law or Board rules.

(b) Formula Funding Amounts: Fall. For the purpose of distributing state appropriations to a public junior college district in a fiscal year, the Coordinating Board shall distribute to each district by October 15 of the fiscal year:

(1) Current Fiscal Year Foundation Payment: one-half of the foundation payment the Coordinating Board determines the district may be entitled to receive for the current fiscal year, consisting of base tier funding for the fiscal year and performance tier funding calculated using funding certified performance outcomes data from the fiscal year two years prior to the fiscal year and performance outcomes for the prior and current fiscal years forecasted pursuant to §13.624 of this subchapter (relating to Forecasting Fundable Outcomes).

(2) Projected Prior-Year Settle Up: the Coordinating Board shall add the full amount, including if such amount is a negative number, of:

(A) performance tier funding for the fiscal year prior to the current fiscal year calculated using:

(i) fundable certified performance outcomes data from the fiscal years three and two years prior to the current fiscal year; and

(ii) performance outcomes for the fiscal year prior to the current fiscal year forecasted pursuant to §13.624 of this subchapter; minus

(B) the sum of performance tier funding payments made under the prior fiscal year foundation payments and dynamic adjustment.

(3) Two-Years Prior Close Out: the Coordinating Board shall add the full amount, including if such amount is a negative number, of:

(A) performance tier funding for the fiscal year two years prior to the current fiscal year calculated using fundable certified performance outcomes data from the fiscal years four, three, and two years prior to the current fiscal year; minus

(B) the sum of performance tier funding payments made under the foundation payments, dynamic adjustment, projected settle-up adjustment, and settle-up adjustment for the fiscal year two years prior to the current fiscal year.

(c) Formula Funding Amounts: Spring. For the purpose of distributing state appropriations to a public junior college district in a fiscal year, the Coordinating Board shall distribute to each district by February 15 of the fiscal year:

(1) Foundation Payment: one-quarter of the foundation payment as described in subsection (b)(1) of this section.

(2) Current Year Dynamic Adjustment: the full positive amount by which performance tier funding of the foundation payment for the current fiscal year as described in subsection (b)(1) of this section is less than a calculation of performance tier funding using:

(A) fundable certified performance outcomes data from the fiscal year two years prior to the current year;

(B) preliminary outcomes data from the prior fiscal year; and

(C) performance outcomes for all other required data elements for the prior and current fiscal years forecasted pursuant to §13.624 of this subchapter.

(3) Prior Year Settle Up: the full positive amount of the difference between:

(A) performance tier funding for the prior fiscal year calculated using:

(i) fundable certified performance outcomes data from the fiscal years three and two years prior to the current fiscal year;

(ii) preliminary outcomes from the prior fiscal year; and

(iii) performance outcomes for all other elements for the prior fiscal year forecasted pursuant to §13.624 of this subchapter; minus

(B) the sum of performance tier funding payments made under the prior fiscal year foundation payments, dynamic adjustment, and projected settle-up.

(d) Formula Funding Amounts: Summer. For the purpose of distributing state appropriations to a public junior college district in a fiscal year, the Coordinating Board shall distribute to each district by June 15 of even-numbered years and, in odd-numbered years, by a date as soon as is practicable after June 15 in accordance with the appropriations process one-quarter of the foundation payment as described in subsection (b)(1) of this section, which amount may be multiplied by a number less than one in odd-numbered years as necessary to prevent formula funding distributions to districts from exceeding state appropriations for such purpose, pursuant to the provisions of the General Appropriations Act, Texas Education Code, and all other pertinent statutes and rules.

§13.628.Substantial Negative Impacts.

If the Commissioner of Higher Education in his or her sole discretion determines that a projected settle-up or close-out adjustment under this subchapter will have a substantial negative impact on the operations of the institution or the education of students, the Coordinating Board may correct the institution's funding by recovering payments as an overallocation pursuant to §13.528(d)(1) or (2) of this chapter (relating to Recovery of Overallocated Funds). For the purpose of formula funding provided directly during FY 2024, the Coordinating Board will not adjust formula funding for a public junior college for a fiscal year subsequent to close out except as set out in §13.625 of this subchapter (relating to Schedule and Composition of Payments for Fiscal Year 2025) and subchapter R of this chapter (relating to State Public Junior College Finance Program Reporting, Audit, and Overallocation).

§13.629.Formula Transition Funding.

In FY 2025, for purposes of transitioning to the new formula model, if the sum of a public junior college's Base and Performance Tier funding as calculated in §13.554 and §13.555 of this subchapter (relating to Base Tier Allotment and Performance Tier Funding, respectively) would result in the district receiving less in General Revenue formula funding than the district received through the sum of appropriations made in the core operations strategy, student success strategy, contact hour funding strategy, and, if applicable, the need-based supplement and bachelor of applied technology strategies, as provided for FY 2023 in the 2022-23 General Appropriations Act, the Coordinating Board will add transitional funding in the amount of the difference to the district's formula funding for FY 2025. This rule expires on August 31, 2025.

§13.630.Limitations on Spending.

(a) Texas Education Code, §130.003(c), establishes that state funds provided under Texas Education Code, chapters 130 and 130A, may be used exclusively for the purpose of paying salaries of the instructional and administrative forces, purchase of supplies and materials for instructional purposes, and paying the cost of audits.

(b) The General Appropriations Act limits funding for instructional and administrative forces as follows:

(1) Formula funding, including base tier, performance tier, and formula transition funds, may be used for the following elements of cost: instruction, academic support, student services, institutional support, organized activities, and staff benefits associated with salaries paid from general revenue.

(2) Non-formula support item funds may be expended for salaries, wages, travel, capital outlay and other necessary operating expenses, in addition to the elements of cost listed under subsection (b)(1) of this section.

(3) Formula and non-formula support item funding may not be used for the operation of intercollegiate athletics.

(c) The elements of cost in subsection (b) of this section are defined in the Coordinating Board's Budget Requirements and Annual Financial Reporting Requirements for Texas Public Community Colleges, also known as the AFR Manual, as published under §13.524 of this chapter (relating to Required Reporting).

(d) Institutions may expend funds as otherwise permitted by statute.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 17, 2024.

TRD-202402230

Nichole Bunker-Henderson

General Counsel

Texas Higher Education Coordinating Board

Earliest possible date of adoption: June 30, 2024

For further information, please call: (512) 427-6548