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AN ACT
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relating to student success-based funding for and reporting |
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regarding public institutions of higher education. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. This Act shall be known as the Higher Education |
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Outcomes-Based Funding Act. |
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SECTION 2. Section 61.059, Education Code, is amended by |
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amending Subsections (a) and (c) and adding Subsection (b-1) to |
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read as follows: |
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(a) To finance a system of higher education and to secure an |
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equitable distribution of state funds deemed to be available for |
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higher education, the board shall perform the functions described |
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in this section. Funding policies shall: |
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(1) allocate resources efficiently and provide |
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incentives for programs of superior quality and for institutional |
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diversity; |
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(2) provide incentives for supporting the five-year |
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master plan developed and revised under Section 61.051; [and] |
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(3) discourage unnecessary duplication of course |
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offerings between institutions and unnecessary construction on any |
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campus; and |
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(4) emphasize an alignment with education goals |
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established by the board. |
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(b-1) A committee under Subsection (b) must be composed of |
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representatives of a cross-section of institutions representing |
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each of the institutional groupings under the board's |
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accountability system. The commissioner of higher education shall |
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solicit recommendations for the committee's membership from the |
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chancellor of each university system and from the president of each |
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institution of higher education that is not a component of a |
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university system. The chancellor of a university system shall |
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recommend to the commissioner at least one institutional |
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representative for each institutional grouping to which a component |
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of the university system is assigned. The president of an |
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institution of higher education that is not a component of a |
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university system shall recommend to the commissioner at least one |
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institutional representative for the institutional grouping to |
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which the institution is assigned. |
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(c) Formulas for basic funding shall: |
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(1) reflect the role and mission of each institution; |
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(2) [, shall] emphasize funding elements that directly |
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support faculty; |
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(3) [, and shall] reflect both fixed and variable |
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elements of cost; and |
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(4) incorporate, as the board considers appropriate, |
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goals identified in the board's long-range statewide plan developed |
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under Section 61.051. |
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SECTION 3. Subchapter C, Chapter 61, Education Code, is |
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amended by adding Section 61.0593 to read as follows: |
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Sec. 61.0593. STUDENT SUCCESS-BASED FUNDING |
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RECOMMENDATIONS. (a) The legislature finds that it is in the |
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state's highest public interest to evaluate student achievement at |
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institutions of higher education and to develop higher education |
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funding policy based on that evaluation. Funding policies that |
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promote postsecondary educational success based on objective |
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indicators of relative performance, such as degree completion |
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rates, are critical to maintaining the state's competitiveness in |
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the national and global economy and supporting the general welfare |
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of this state. Therefore, the purpose of this section is to ensure |
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that institutions of higher education produce student outcomes that |
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are directly aligned with the state's education goals and economic |
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development needs. |
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(b) In this section: |
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(1) "At-risk student" means an undergraduate student |
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of an institution of higher education: |
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(A) who has been awarded a grant under the |
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federal Pell Grant program; or |
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(B) who, on the date the student initially |
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enrolled in the institution: |
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(i) was 20 years of age or older; |
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(ii) had a score on the Scholastic |
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Assessment Test (SAT) or the American College Test (ACT) that was |
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less than the national mean score for students taking that test; |
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(iii) was enrolled as a part-time student; |
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or |
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(iv) had not received a high school diploma |
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but had received a high school equivalency certificate within the |
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last six years. |
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(2) "Critical field" means a field of study designated |
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as a critical field under Subsection (c). |
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(c) Except as otherwise provided under Subdivision (2), the |
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fields of engineering, computer science, mathematics, physical |
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science, allied health, nursing, and teaching certification in the |
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field of science or mathematics are critical fields. Beginning |
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September 1, 2012, the board, based on the board's determination of |
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those fields of study in which the support and development of |
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postsecondary education programs at the bachelor's degree level are |
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most critically necessary for serving the needs of this state, by |
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rule may: |
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(1) designate as a critical field a field of study that |
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is not currently designated by this subsection or by the board as a |
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critical field; or |
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(2) remove a field of study from the list of fields |
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currently designated by this subsection or by the board as critical |
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fields. |
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(d) This subsection applies only to a general academic |
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teaching institution other than a public state college. In |
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devising its funding formulas and making its recommendations to the |
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legislature relating to institutional appropriations of funds |
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under Section 61.059 for institutions to which this subsection |
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applies, the board, in the manner and to the extent the board |
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considers appropriate and in consultation with those institutions, |
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shall incorporate the consideration of undergraduate student |
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success measures achieved during the preceding state fiscal |
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biennium by each of the institutions. At the time the board makes |
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those recommendations, the board shall also make recommendations |
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for incorporating the success measures, to the extent the board |
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considers appropriate in consultation with those institutions, |
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into the distribution of any incentive funds available for those |
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institutions, including performance incentive funds under |
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Subchapter D, Chapter 62. The board's recommendations must provide |
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alternative approaches for applying the success measures and must |
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compare the effects on funding of applying the success measures |
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within the formula for base funding to applying the success |
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measures as a separate formula. The success measures considered by |
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the board under this subsection may include: |
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(1) the total number of bachelor's degrees awarded by |
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the institution; |
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(2) the total number of bachelor's degrees in critical |
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fields awarded by the institution; |
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(3) the total number of bachelor's degrees awarded by |
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the institution to at-risk students; and |
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(4) as determined by the board, the six-year |
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graduation rate of undergraduate students of the institution who |
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initially enrolled in the institution in the fall semester |
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immediately following their graduation from a public high school in |
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this state as compared to the six-year graduation rate predicted |
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for those students based on the composition of the institution's |
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student body. |
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(e) Notwithstanding Subsection (d): |
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(1) not more than 10 percent of the total amount of |
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general revenue appropriations of base funds for undergraduate |
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education recommended by the board for all institutions to which |
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Subsection (d) applies for a state fiscal biennium may be based on |
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student success measures; and |
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(2) the board's recommendation for base funding for |
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undergraduate education based on student success measures does not |
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reduce or otherwise affect funding recommendations for graduate |
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education. |
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(f) This subsection applies only to public junior colleges, |
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public state colleges, and public technical institutes. In |
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devising its funding formulas and making its recommendations to the |
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legislature relating to institutional appropriations of incentive |
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funds for institutions to which this subsection applies, the board, |
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in the manner and to the extent the board considers appropriate and |
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in consultation with those institutions, shall incorporate the |
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consideration of the undergraduate student success measures |
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achieved during the preceding state fiscal biennium by each of the |
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institutions. The success measures considered by the board under |
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this subsection may include: |
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(1) the following academic progress measures achieved |
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by students at the institution: |
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(A) successful completion of: |
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(i) developmental education in |
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mathematics; |
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(ii) developmental education in English; |
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(iii) the first college-level mathematics |
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course with a grade of "C" or higher; |
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(iv) the first college-level English course |
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with a grade of "C" or higher; and |
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(v) the first 30 semester credit hours at |
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the institution; and |
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(B) transfer to a four-year college or university |
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after successful completion of at least 15 semester credit hours at |
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the institution; and |
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(2) the total number of the following awarded by the |
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institution: |
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(A) associate's degrees; |
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(B) bachelor's degrees under Section 130.0012; |
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and |
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(C) certificates identified by the board for |
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purposes of this section as effective measures of student success. |
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(g) Biennially, the board, in consultation with |
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institutions to which Subsections (d) and (f) apply, shall review |
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the student success measures considered by the board under those |
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subsections. |
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(h) The board shall include in its findings and |
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recommendations to the legislature under Section 61.059: |
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(1) an evaluation of the effectiveness of the student |
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success measures described by this section in achieving the purpose |
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of this section during the preceding state fiscal biennium; and |
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(2) any related recommendations the board considers |
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appropriate. |
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(i) The board shall adopt rules for the administration of |
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this section, including rules requiring each institution of higher |
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education to submit to the board any student data or other |
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information the board considers necessary for the board to carry |
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out its duties under this section. |
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SECTION 4. Subchapter C, Chapter 61, Education Code, is |
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amended by adding Section 61.0905 to read as follows: |
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Sec. 61.0905. REPORTS TO JOINT OVERSIGHT COMMITTEE. (a) |
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Not later than September 30, 2011, and subsequently not later than |
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July 1, 2012, the board shall submit to the Joint Oversight |
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Committee on Higher Education Governance, Excellence, and |
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Transparency a written report reviewing, comparing, and |
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highlighting national and global best practices on: |
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(1) improving student outcomes, including student |
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retention, graduations, and graduation rates; and |
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(2) higher education governance, administration, and |
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transparency. |
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(b) This section expires August 31, 2013. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 9 was passed by the House on May 13, |
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2011, by the following vote: Yeas 118, Nays 22, 1 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 9 on May 27, 2011, by the following vote: Yeas 127, Nays 14, 2 |
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present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 9 was passed by the Senate, with |
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amendments, on May 24, 2011, by the following vote: Yeas 30, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |