EDUCATION CODE

TITLE 3. HIGHER EDUCATION

SUBTITLE G. NON-BACCALAUREATE SYSTEM

CHAPTER 130A.  PUBLIC JUNIOR COLLEGE STATE FINANCE PROGRAM

SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 130A.001.  LEGISLATIVE INTENT.  It is the intent of the legislature that, as public junior colleges are locally governed institutions, providing foundational funding for instruction and operations of public junior colleges should be primarily a local responsibility, supported through a combination of tuition, fees, and local property taxes, with state funding focused primarily on rewarding outcomes aligned with regional and state education and workforce needs.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.002.  PURPOSE.  The purpose of the public junior college state finance program established under this chapter is to provide a modern and dynamic finance system that ensures that each public junior college has access to adequate state appropriations and local resources to support the education and training of the workforce of the future.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.003.  DEFINITIONS.  In this chapter:
(1)  "Commissioner" means the commissioner of higher education.
(2)  "Coordinating board" means the Texas Higher Education Coordinating Board.
(3)  "Program" means the public junior college state finance program established under this chapter.
(4)  "Public junior college" has the meaning assigned by Section 61.003.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.004.  PROGRAM COMPONENTS.  The program consists of:
(1)  a base tier of state and local funding determined in accordance with Subchapter B that ensures each public junior college has access to a defined level of base funding for instruction and operations; and
(2)  a performance tier of state funding determined in accordance with Subchapter C that constitutes the majority of state funding and is distributed based on measurable outcomes aligned with:
(A)  regional and state workforce needs; and
(B)  state goals aligned to the state's long-range master plan for higher education developed under Section 61.051.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.005.  ADMINISTRATION OF PROGRAM.  (a)  The coordinating board may adopt rules, require reporting, and take other actions consistent with Chapter 61, Chapter 130, and this chapter as necessary to implement and administer the program.
(b)  In adopting rules under this section, the coordinating board shall consult with the advisory committee established under Section 130.001(b)(5).
(c)  Notwithstanding Section 61.033, the coordinating board is not required to use negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of rules under this section.
(d)  The coordinating board may use the emergency rulemaking procedures established under Section 2001.034, Government Code, to adopt rules necessary to align the funding formulas under this chapter with appropriations or other legislative action. The coordinating board is not required to make the finding described by Section 2001.034(a), Government Code, to adopt rules under this subsection.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.
Amended by: 
Acts 2025, 89th Leg., R.S., Ch. 191 (S.B. 1786), Sec. 6, eff. May 27, 2025.

Sec. 130A.006.  REQUIRED REPORTING.  The coordinating board by rule shall require each junior college district to report to the coordinating board through the Education Data System, Community College Annual Reporting and Analysis Tool, Report of Fundable Operating Expenses, or any successor program, data necessary to:
(1)  calculate funding under this chapter;
(2)  provide timely data and analyses to inform management decisions by the governing body of each junior college district;
(3)  administer or evaluate the effectiveness of the program; or
(4)  audit the program.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.007.  COMMISSIONER AUTHORITY TO RESOLVE DATA REPORTING ERRORS AND UNINTENDED CONSEQUENCES FROM FUNDING FORMULAS.  (a)  The commissioner may review the accuracy of data reported to the coordinating board by junior college districts.
(b)  The commissioner may adjust:
(1)  the distribution of funding under this chapter for a state fiscal year as necessary to correct errors in data reporting identified through the commissioner's review under Subsection (a); and
(2)  a junior college district's funding under this chapter if the funding formulas used to determine the district's entitlement would result in an unanticipated loss or gain for the district that would have a substantial negative impact on the district's operations.
(c)  Before making an adjustment under this section, the commissioner must request and receive written approval from the Legislative Budget Board and the office of the governor.  A request to make an adjustment is considered approved unless the Legislative Budget Board or the office of the governor issues a written disapproval within 60 business days after the date on which the request is received.
(d)  If the commissioner makes an adjustment under Subsection (b), the commissioner shall provide to the legislature an explanation regarding the changes necessary to resolve the data reporting errors or the unintended consequences, as applicable.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.008.  CENSUS DATE ELIGIBILITY.  A junior college district may report a student in attendance on the district's approved course census date for the purpose of funding under this chapter.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.009.  RECOVERY OF OVERALLOCATED FUNDS.  (a)  If a junior college district has received an overallocation of state funds, the coordinating board shall recover from the district an amount equal to the overallocation by withholding from subsequent allocations of state funds for the current or subsequent academic year or by requesting and obtaining a refund from the district.
(b)  Notwithstanding Subsection (a), the coordinating board may recover an overallocation of state funds over a period not to exceed the subsequent five academic years if the commissioner determines that the overallocation was the result of exceptional circumstances reasonably caused by statutory changes to Chapter 130 or this chapter and related reporting requirements.
(c)  If a junior college district fails to comply with a request for a refund under Subsection (a), the coordinating board shall report to the comptroller that the amount constitutes a debt for purposes of Section 403.055, Government Code.  The coordinating board shall provide to the comptroller the amount of the overallocation and any other information required by the comptroller.  The comptroller may certify the amount of the debt to the attorney general for collection.  The junior college district's governmental immunity is waived to the extent necessary to collect the debt owed under this section.
(d)  Subject to Subsection (e), the coordinating board may review a junior college district as necessary to determine if the district qualifies for each amount received by the district under this chapter.  If the coordinating board determines that a junior college district received an amount to which the district was not entitled, the coordinating board may establish a corrective action plan or withhold the applicable amount of funding from the district.
(e)  The coordinating board may not review junior college district expenditures that occurred seven or more years before the review.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.010.  GIFTS, GRANTS, AND DONATIONS.  Except as provided by other law, an affiliated nonprofit organization described by Section 61.051(b) may solicit and accept gifts, grants, or donations of personal property from any public or private source to implement or administer this chapter.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

SUBCHAPTER B.  STATE FUNDING:  BASE TIER

Sec. 130A.051.  BASE TIER FORMULA.  The amount of base tier state funding to which a junior college district is entitled for instruction and operations under this subchapter for a state fiscal year is an amount equal to the amount, if any, by which the district's guaranteed instruction and operations funding, as determined under Section 130A.052, exceeds the district's local share of base tier funding, as determined under Section 130A.056.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.052.  GUARANTEED INSTRUCTION AND OPERATIONS FUNDING FORMULA.  The amount of a junior college district's guaranteed instruction and operations funding for a state fiscal year is equal to the sum of:
(1)  the product of:
(A)  the district's basic allotment under Section 130A.053; and
(B)  the number of weighted full-time equivalent students enrolled at the district determined in accordance with Section 130A.054; and
(2)  the district's contact hour funding under Section 130A.055.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.053.  BASIC ALLOTMENT.  The basic allotment for a junior college district for a state fiscal year is an amount per weighted full-time equivalent student set by the General Appropriations Act or other legislative appropriation.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.054.  WEIGHTED FULL-TIME EQUIVALENT STUDENT; SCALE ADJUSTMENT.  (a)  The coordinating board by rule shall establish student weights for purposes of this chapter that reflect the higher cost of educating certain students.
(b)  The student weights must be established in a manner that results in appropriate funding to a junior college district for the education of a student enrolled in an eligible credit or non-credit program who is:
(1)  25 years of age or older;
(2)  economically disadvantaged, as defined by coordinating board rule; or
(3)  academically disadvantaged, as defined by coordinating board rule.
(c)  Subject to Subsection (d), the number of weighted full-time equivalent students enrolled at a junior college district for purposes of this subchapter is equal to the sum of:
(1)  the number of full-time equivalent students enrolled in the district; and
(2)  the sum of the weights assigned to students enrolled in the district.
(d)  The coordinating board by rule shall establish an equitable adjustment to the number of weighted full-time equivalent students determined under this section for each junior college district with a total enrollment of fewer than 5,000 full-time equivalent students.
(e)  Not later than November 1 of each even-numbered year, a junior college district that receives an adjustment under Subsection (d) shall submit to the commissioner a report on the district's participation in institutional partnerships and shared services available under Section 61.0571 or other partnerships to reduce costs and improve operational efficiency.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.055.  CONTACT HOUR FUNDING.  (a)  The legislature shall set by appropriation the amount of funding to be provided to a junior college district under this subchapter per contact hour.
(b)  The amount of funding per contact hour must be weighted by discipline to reflect the cost of providing the applicable course.
(c)  The coordinating board shall determine the total amount of contact hour funding to which each junior college district is entitled under this section.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

Sec. 130A.056.  LOCAL SHARE.  A junior college district's local share of base tier funding is an amount equal to the sum of the amounts of revenue estimated to be generated by:
(1)  imposing a maintenance and operations ad valorem tax in the district at a rate of $0.05; and
(2)  assessing an amount of tuition and fees to each full-time equivalent student enrolled in the district equal to the statewide average amount of tuition and fees assessed by junior college districts to a full-time equivalent student, determined as provided by coordinating board rule.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.

SUBCHAPTER C.  STATE FUNDING:  PERFORMANCE TIER

Sec. 130A.101.  PERFORMANCE TIER.  (a)  A junior college district is entitled to performance tier funding for a state fiscal biennium in an amount equal to the sum of the amounts determined under Subsection (b) for each measurable outcome described by Subsection (c).
(b)  The amount of performance tier funding for each measurable outcome described by Subsection (c) is equal to the product of:
(1)  the sum of:
(A)  the number of times that outcome was achieved by the junior college district, determined as provided by coordinating board rule; and
(B)  for an outcome described by Subsection (c)(1) or (2), the sum of the applicable student weights established by coordinating board rule for the students who achieved the outcome at the junior college district as determined under Paragraph (A) of this subdivision; and
(2)  the amount set by the General Appropriations Act or other legislative appropriation for the outcome.
(c)  The measurable outcomes considered for purposes of performance tier funding are:
(1)  the number of credentials of value awarded, as determined by the coordinating board based on analyses of wages and costs associated with the credential, including degrees, certificates, and other credentials from credit and non-credit programs that equip students for continued learning and greater earnings in the state economy, with an additional weight for placement of students who earn that credential in a high-demand occupation, as defined by coordinating board rule, or an appropriate proxy determined by the coordinating board based on available data;
(2)  the number of students who earn at least 15 semester credit hours or the equivalent at the junior college district and:
(A)  subsequently transfer to:
(i)  a general academic teaching institution, as that term is defined by Section 61.003; or
(ii)  a private or independent institution of higher education, as that term is defined by Section 61.003, that offers four-year degree programs; or
(B)  are enrolled in a structured co-enrollment program, as authorized by coordinating board rule; and
(3)  the number of students who complete a sequence of at least 15 semester credit hours or the equivalent for dual credit or dual enrollment courses, as defined by coordinating board rule, that apply toward academic or workforce program requirements at the postsecondary level.
Added by Acts 2023, 88th Leg., R.S., Ch. 378 (H.B. 8), Sec. 46, eff. September 1, 2023.
Amended by: 
Acts 2025, 89th Leg., R.S., Ch. 191 (S.B. 1786), Sec. 7, eff. September 1, 2025.

For expiration of this section, see Subsection (e).

Sec. 130A.1011.  STUDY ON DUAL CREDIT OR DUAL ENROLLMENT COURSE SEQUENCES AND WORKFORCE CAPACITY.  (a)  The coordinating board shall conduct a study to assess the feasibility and the fiscal and policy implications, including the fiscal impact to the state, of decreasing the number of semester credit hours or the equivalent for a sequence of dual credit or dual enrollment courses for purposes of performance tier funding under Section 130A.101(c)(3) to nine semester credit hours or the equivalent.
(b)  In conducting the study, the coordinating board shall assess:
(1)  the potential benefit to students of taking the action described by Subsection (a), including:
(A)  alignment with the public school accountability system under Chapter 39;
(B)  any reduction in the time to graduate with or the cost for an undergraduate degree at an institution of higher education; and
(C)  a comparison of matriculation and completion rates for students who complete a sequence of 9 semester credit hours or the equivalent for dual credit or dual enrollment courses versus a sequence of 15 semester credit hours or the equivalent for those courses; and
(2)  the current and projected capacity of the state's workforce to teach dual credit or dual enrollment courses, including:
(A)  an estimate of the number of instructors currently eligible to teach dual credit or dual enrollment courses and the geographic distribution of those instructors;
(B)  an analysis of barriers to certification or credentialing in teaching dual credit or dual enrollment courses; and
(C)  strategies to increase the number of instructors eligible to teach dual credit or dual enrollment courses, including:
(i)  professional development pathways;
(ii)  partnerships with institutions of higher education, as defined by Section 61.003; and
(iii)  targeted financial or academic support programs.
(c)  The coordinating board may consult with the Texas Education Agency and institutions of higher education in conducting the study.
(d)  Not later than December 1, 2026, the coordinating board shall submit to the legislature a report on the results of the study conducted under this section and any recommendations for legislative or other action, including recommendations for actions to support an expanded workforce of dual credit or dual enrollment instructors.
(e)  This section expires September 1, 2027.
Added by Acts 2025, 89th Leg., R.S., Ch. 1040 (H.B. 1868), Sec. 1, eff. June 20, 2025.

For expiration of this section, see Subsection (e).

Sec. 130A.1012.  STUDY ON STUDENT TRANSFERS.  (a)  In this section, "general academic teaching institution" has the meaning assigned by Section 61.003.
(b)  The coordinating board, in consultation with the standing advisory committee established under Section 130.001, shall conduct a study to assess the feasibility and the fiscal and policy implications, including the fiscal impact to the state, of revising the requirements for subsequent transfer to a general academic teaching institution for purposes of performance tier funding under Section 130A.101(c)(2)(A) to include students who were previously enrolled at a general academic teaching institution.
(c)  In conducting the study, the coordinating board shall assess:
(1)  the types of postsecondary educational experience and attainment that students have before enrolling in a public junior college, including:
(A)  the frequency of each type;
(B)  the kinds of services and how much of those services students with each type require from the college; and
(C)  the associated measures of academic or workforce success;
(2)  the fiscal impact of revising the requirements for subsequent transfer to a general academic teaching institution for purposes of performance tier funding under Section 130A.101(c)(2)(A) to include students who were previously enrolled at a general academic teaching institution; and
(3)  any other factors or issues the coordinating board or the standing advisory committee established under Section 130.001 determines relevant.
(d)  Not later than December 1, 2026, the coordinating board, in consultation with the standing advisory committee established under Section 130.001, shall submit to the legislature a report on the results of the study and any recommendations for legislative or other action.
(e)  This section expires September 1, 2027.
Added by Acts 2025, 89th Leg., R.S., Ch. 826 (S.B. 1400), Sec. 1, eff. June 20, 2025.

Sec. 130A.102.  CREDENTIALS OF VALUE.  (a)  For purposes of Section 130A.101(c)(1), the coordinating board shall designate a credential as a credential of value if the credential:
(1)  provides a positive return on investment for a student who received the credential, as measured by earning or being expected to earn cumulative wages at least equal to the cumulative median earnings for high school graduates in this state and earning at least the individual self-sufficient wage, as defined by coordinating board rule, during the period specified by coordinating board rule but not more than 10 years after the date on which the credential is received; and
(2)  allows a student who received the credential to recoup the net cost of attendance at a public junior college, including opportunity cost, where:
(A)  the net cost of attendance is the net cost of attendance used for purposes of financial aid at the college less any aid received by the student; and
(B)  opportunity cost is the difference between cumulative median earnings for high school graduates in this state and cumulative median earnings for students while enrolled in the certificate or degree program leading to the credential for:
(i)  a period of two years for an associate degree program;
(ii)  a period of four years for a baccalaureate degree program; and
(iii)  a period determined by coordinating board rule based on the program's design for a certificate or degree program not described by Subparagraph (i) or (ii).
(b)  The coordinating board shall calculate the return on investment for a credential under Subsection (a)(1) using the most current data available to the coordinating board from:
(1)  the integrated postsecondary education data system maintained by the National Center for Education Statistics;
(2)  wage records obtained from the Texas Workforce Commission;
(3)  the American Community Survey by the United States Census Bureau;
(4)  the coordinating board's data reporting systems; or
(5)  other data sources selected by the coordinating board.
(c)  In adopting a definition of individual self-sufficient wage for purposes of Subsection (a)(1), the coordinating board shall ensure the definition is correlated with the statewide median of the self-sufficient wage determined under Section 2308A.012, Government Code.
(d)  The coordinating board may designate a credential in education or health care as a credential of value regardless of whether the credential meets the criteria under Subsection (a) if the coordinating board determines the designation is necessary to ensure the workforce needs of this state are met in those fields.
(e)  The coordinating board shall adopt rules as necessary to implement this section in alignment with the long-range master plan for higher education in this state developed under Section 61.051(a-1).
Added by Acts 2025, 89th Leg., R.S., Ch. 191 (S.B. 1786), Sec. 8, eff. September 1, 2025.