Trial Engrossment of Amendment A05529 to Senate Bill 1154 P.N. 1713, Regular Session 2023-2024

A05529

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1154

Session of

2024

INTRODUCED BY AUMENT, MARTIN, PITTMAN, ARGALL, PENNYCUICK,

LANGERHOLC, LAUGHLIN, MASTRIANO, REGAN, STEFANO, VOGEL AND

J. WARD, APRIL 26, 2024

AS AMENDED ON THIRD CONSIDERATION, JUNE 10, 2024

AN ACT

Establishing the Performance-based Funding Council and providing

for its powers and duties.

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," providing for institutions of higher

education and for Performance-based Funding Council.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Performance-

based Funding Council Act.

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Council." The Performance-based Funding Council established

by this act.

"Department." The Department of Education of the

Commonwealth.

"State-related university." The following institutions:

(1) The Pennsylvania State University.

(2) The University of Pittsburgh.

(3) Temple University.

Section 3. Performance-based Funding Council.

(a) Establishment.--The Performance-based Funding Council is

established for the purpose of the development of a new system

to distribute funding to the State-related universities. The

system shall utilize performance-based metrics designed to

increase degree attainment, encourage affordability in higher

education, meet workforce needs and grow the economy.

(b) Membership.--

(1) The council shall consist of voting members

appointed under paragraph (2) and nonvoting members, who

shall serve in an advisory role, described under paragraph

(3).

(2) The voting members of the council shall be:

(i) An individual appointed by the Governor.

(ii) An individual appointed by the President pro

tempore of the Senate.

(iii) An individual appointed by the Minority Leader

of the Senate.

(iv) An individual appointed by the Speaker of the

House of Representatives.

(v) An individual appointed by the Minority Leader

of the House of Representatives.

(3) The nonvoting members of the council shall be:

(i) The President of The Pennsylvania State

University or a designee.

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(ii) The President of the University of Pittsburgh

or a designee.

(iii) The President of Temple University or a

designee.

(4) An individual appointed under paragraph (2) may not

be employed by or serve on the governing body of a State-

related university or other university or college in this

Commonwealth.

appoint a member to serve as the chairperson.

(d) Council meetings.--The meetings of the council shall be

held bimonthly and at the call of the chairperson as necessary

and shall be conducted in accordance with the requirements of 65

Pa.C.S. Ch. 7 (relating to open meetings).

(e) Quorum.--A majority of the voting members of the council

shall constitute a quorum, and a quorum shall be required to

vote on actions to be taken by the council.

(f) Council actions.--A two-thirds vote of the voting

members of the council shall be required for all actions taken

by the council.

(g) Administrative and technical support.--

(1) The General Assembly shall provide administrative

support, meeting space and any other assistance required by

the council to carry out the council's powers and duties

under this section.

(2) The department, the Pennsylvania Higher Education

Assistance Agency and the State-related universities shall

provide technical support, including data, research and other

assistance required by the council, to carry out the

council's powers and duties under this section.

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(h) Powers and duties.--The council shall:

(1) Consult with Commonwealth agencies and experts to

assist in carrying out the duties of this section.

(2) Hold public hearings at each one of the State-

related universities and receive input from experts and

interested parties, including parents and students.

(3) No later than March 31, 2025, develop

recommendations for a new system to distribute funding to the

State-related universities that utilizes performance-based

metrics and requires the reallocation of between 3% and 5% of

the amount appropriated in fiscal year 2023-2024 in each

subsequent fiscal year. SYSTEM THAT UTILIZES PERFORMANCE-

BASED METRICS TO DISTRIBUTE:

(I) THE REALLOCATION OF BETWEEN 3% AND 5% OF THE

AMOUNT APPROPRIATED IN FISCAL YEAR 2023-2024; AND

(II) ANY FUNDING IN SUBSEQUENT YEARS THAT IS MORE

THAN THE AMOUNT APPROPRIATED TO THE STATE-RELATED

UNIVERSITIES IN FISCAL YEAR 2023-2024.

(4) No later than April 30, 2025, transmit the

recommendations to the Governor, the department and the

General Assembly, including draft legislation to implement

the new system to distribute funding.

(i) Performance-based funding metrics.--The council shall

consider the following metrics CHOOSE NO MORE THAN SIX METRICS

FROM THE FOLLOWING LIST when developing the new system under

subsection (h):

(1) A base level of funding to ensure ongoing

operations.

(2) Incentive funding.

(3) Performance thresholds.

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(4) The four-year graduation rate for first-time college

students.

(5) The percentage of undergraduate students enrolled

who received a Pell Grant during the previous school year.

(6) The six-year graduation rate for students who are

awarded a Pell Grant in their first year.

(7) The four-year graduation rate for baccalaureate

students.

(8) Student retention rates.

(9) Bachelor's degree production per 100 full-time

enrolled students.

(10) Net tuition and fees per 120 credit hours.

(11) Postgraduation employment rates and salaries,

including wage thresholds that reflect the added value of a

baccalaureate degree.

(12) The number of students enrolled and the THE number

of degrees attained in high-priority occupations in this

Commonwealth.

(13) The number of nontraditional students enrolled in a

program to up-skill or reskill in high-priority occupations

in this Commonwealth.

(14) The number of high school students who are dual

enrolled and the number of credits earned.

(15) The percentage of credits articulated.

(16) Other metrics provided by each State-related

university.

(17) Other metrics related to higher education that the

council deems appropriate.

(j) Withholding of payments.--If the council fails to

transmit its recommendations to the department as required under

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subsection (h)(4), the department shall withhold the payment of

money appropriated to each State-related university until such

time that the council transmits the recommendations to the

department as required under subsection (h).

Section 4. Effective date.

(J) DEFAULT METRICS.--

(1) IF THE COUNCIL FAILS TO TRANSMIT RECOMMENDATIONS TO

THE DEPARTMENT AS REQUIRED UNDER SUBSECTION (H)(4), THE

PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, IN

CONSULTATION WITH THE DEPARTMENT, THE DEPARTMENT OF LABOR AND

INDUSTRY, THE INDEPENDENT FISCAL OFFICE AND THE STATE-RELATED

UNIVERSITIES, SHALL:

(I) DEVELOP, IN ACCORDANCE WITH PARAGRAPH (2), A NEW

SYSTEM THAT UTILIZES DEFAULT METRICS TO DISTRIBUTE

FUNDING TO THE STATE-RELATED UNIVERSITIES.

(II) DEVELOP DRAFT LEGISLATION TO IMPLEMENT THE

SYSTEM DEVELOPED UNDER SUBPARAGRAPH (I).

(III) TRANSMIT THE NEW SYSTEM DEVELOPED UNDER

SUBPARAGRAPH (I) AND THE DRAFT LEGISLATION DEVELOPED

UNDER SUBPARAGRAPH (II) TO THE FOLLOWING NO LATER THAN

JUNE 13, 2025:

(A) THE GOVERNOR.

(B) THE DEPARTMENT.

(2) THE DEFAULT METRICS UTILIZED UNDER PARAGRAPH (1)(I)

SHALL:

(I) CONSIST OF THE FOLLOWING, WHICH SHALL BE

WEIGHTED EQUALLY:

(A) THE FOUR-YEAR GRADUATION RATE FOR FIRST-TIME

COLLEGE STUDENTS.

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(B) THE SIX-YEAR GRADUATION RATE FOR STUDENTS

WHO ARE AWARDED A PELL GRANT IN THEIR FIRST YEAR.

(D) STUDENT RETENTION RATES.

(E) THE NUMBER OF DEGREES ATTAINED IN HIGH-

PRIORITY OCCUPATIONS IN THIS COMMONWEALTH.

(II) BE USED TO DISTRIBUTE THE FOLLOWING:

(A) THE REALLOCATION OF 5% OF THE AMOUNT

APPROPRIATED IN FISCAL YEAR 2023-2024.

(B) ANY FUNDING IN SUBSEQUENT YEARS THAT IS MORE

THAN THE AMOUNT APPROPRIATED TO THE STATE-RELATED

UNIVERSITIES IN FISCAL YEAR 2023-2024.

(III) BE IN EFFECT UNTIL SUCH TIME THAT THE COUNCIL

TRANSMITS RECOMMENDATIONS TO THE DEPARTMENT AS REQUIRED

UNDER SUBSECTION (H)(4).

(3) THE FOLLOWING SHALL APPLY TO ADMINISTRATIVE COSTS OF

THE PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY:

(I) OF THE MONEY APPROPRIATED TO STATE-RELATED

UNIVERSITIES FOR ANY FISCAL YEAR, UP TO $500,000 SHALL BE

ALLOCATED TO THE PENNSYLVANIA HIGHER EDUCATION ASSISTANCE

AGENCY TO PAY ADMINISTRATIVE COSTS ASSOCIATED WITH THE

AGENCY'S WORK UNDER PARAGRAPH (1).

(II) FOR AN ALLOCATION UNDER SUBPARAGRAPH (I), THE

FOLLOWING SHALL APPLY:

(A) EACH STATE-RELATED UNIVERSITY SHALL

CONTRIBUTE AN EQUAL SHARE OF THE AMOUNT ALLOCATED.

(B) THE MONEY CONTRIBUTED UNDER CLAUSE (A) SHALL

BE PAID OUT OF THE AMOUNT APPROPRIATED TO EACH STATE-

RELATED UNIVERSITY FOR THE FISCAL YEAR IN WHICH THE

MONEY IS ALLOCATED.

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SECTION 4. REVIEW.

THE COUNCIL SHALL RECONVENE EVERY FIVE YEARS TO REEVALUATE

THE PERFORMANCE METRICS UTILIZED FOR THE DISTRIBUTION OF FUNDS

TO STATE-RELATED UNIVERSITIES.

SECTION 5. EFFECTIVE DATE.

This act shall take effect July 1, 2024, or immediately,

whichever is later.

Section 1. The act of March 10, 1949 (P.L.30, No.14), known

as the Public School Code of 1949, is amended by adding an

article to read:

ARTICLE XX-L

INSTITUTIONS OF HIGHER EDUCATION

SUBARTICLE A

PRELIMINARY PROVISIONS

Section 2001-L. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agency." The Pennsylvania Higher Education Assistance

Agency.

"Board." The State Board of Higher Education established

under section 2010-L.

"Community college." An institution created under Article

XIX-A or the act of August 24, 1963 (P.L.1132, No.484), known as

the Community College Act of 1963.

"Council." The Performance-based Funding Council established

under Subarticle C.

"Department." The Department of Education of the

Commonwealth.

"Financial aid." Funding to help a student pay for

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postsecondary education, including grants, work study, loans and

scholarships.

"High-priority occupation." An occupation identified by the

Department of Labor and Industry under the act of December 18,

2001 (P.L.949, No.114), known as the Workforce Development Act.

"Higher Education Scholarship Law." The act of January 25,

1966 (1965 P.L.1546, No.541), referred to as the Higher

Education Scholarship Law.

"Independent institution of higher education." An

institution of higher education which is operated not for

profit, located in and incorporated or chartered by the

Commonwealth and entitled to confer degrees as specified in 24

Pa.C.S. § 6505 (relating to power to confer degrees) and to

apply to itself the designation "college" or "university" as

provided for by the standards and qualifications prescribed by

the State Board of Education under 24 Pa.C.S. Ch. 65 (relating

to private colleges, universities and seminaries).????

"Institution of higher education." As defined in section

1501-L.

"Institutional aid." Financial aid offered to an eligible

student directly by an institution of higher education,

including merit aid, gift aid and athletic awards.

"Pell Grant." The Federal Pell Grant or any successor

program.

"Pennsylvania State grant." A grant or scholarship awarded

under the Higher Education Scholarship Law.

"Private scholarship." Financial aid awards funded by

entities other than the Federal or State Government, including

awards by companies, service groups, foundations, organizations

and individuals.

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"Public institution of higher education." A State-owned

university, community college or State-related university.

"State-owned university." An institution which is part of

the State System of Higher Education under Article XX-A.

"State-related university." The Pennsylvania State

University, the University of Pittsburgh, Temple University and

Lincoln University.

"System." The State System of Higher Education established

under Article XX-A.

SUBARTICLE B

(Reserved)

SUBARTICLE C

PERFORMANCE-BASED FUNDING COUNCIL

Section 2030-L. Scope of subarticle.

This subarticle relates to the Performance-based Funding

Council.

Section 2031-L. Definitions.

The following words and phrases when used in this subarticle

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"State-related university." The following institutions:

(1) The Pennsylvania State University.

(2) The University of Pittsburgh.

(3) Temple University.

Section 2032-L. Performance-based Funding Council.

(a) Purpose.--The Performance-based Funding Council is

established and shall develop a process to distribute funding to

the State-related universities. The process shall utilize

performance-based metrics designed to increase degree

attainment, encourage affordability in higher education, meet

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workforce needs and grow the economy.

(b) Goals.--The goals of the council in the development of

the process shall be:

(1) Predictability to avoid dramatic changes over time

to the individual institutions of higher education or the

overall sector.

(2) Outcomes driven to align to the priorities of the

Commonwealth.

(3) Transparency to increase public trust.

(4) Resources and incentives to increase student access

and attainment.

(1) The council shall consist of voting members

appointed under paragraph (2) and nonvoting members, who

shall serve in an advisory role, described under paragraph

(3).

(2) The voting members of the council shall consist of

the following members of the State Board of Higher Education

under section 2010-L(c):

(i) The Secretary of Education appointed under

section 2010-L(c)(1).

(ii) One member of the Senate appointed by the

President pro tempore of the Senate appointed under

section 2010-L(c)(3).

(iii) One member of the Senate appointed by the

Minority Leader of the Senate appointed under section

2010-L(c)(4).

(iv) One member of the House of Representatives

appointed by the Speaker of the House of Representatives

appointed under section 2010-L(c)(5).

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(v) One member of the House of Representatives

appointed by the Minority Leader of the House of

Representatives appointed under section 2010-L(c)(6).

(3) The nonvoting members of the council shall be:

(i) The President of The Pennsylvania State

University or a designee.

(ii) The Chancellor of the University of Pittsburgh

or a designee.

(iii) The President of Temple University or a

designee.

(d) Chairperson.--The voting members of the council shall

appoint a member to serve as the chairperson.

(e) Council meetings.--The meetings of the council shall be

held bimonthly and at the call of the chairperson as necessary

and shall be conducted in accordance with the requirements of 65

Pa.C.S. Ch. 7 (relating to open meetings).

(f) Quorum.--A majority of the voting members of the council

shall constitute a quorum, and a quorum shall be required to

vote on actions to be taken by the council.

(g) Council actions.--A two-thirds vote of the voting

members of the council shall be required for all actions taken

by the council.

(h) Technical support.--The Office of the Budget, the

department, the agency and the State-related universities shall

provide technical support, including data, research and other

assistance required by the council, to carry out the council's

powers and duties under this section.

(i) Powers and duties.--The council shall:

(1) Consult with Commonwealth agencies and experts to

assist in carrying out the duties of this section.

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(2) Hold public hearings at each one of the State-

related universities and receive input from experts and

interested parties, including parents and students.

(3) Develop recommendations for a process that utilizes

performance-based metrics to distribute funding.

(4) No later than April 30, 2025, transmit the

recommendations to the Governor, the board, the department

and the General Assembly, including draft legislation to

implement the process to distribute funding.

(j) Performance-based funding metrics.--The council shall

consider the following metrics when developing the process under

under subsection (i):

(1) A fixed amount per State-related university to

ensure ongoing operations.

(2) Incentive funding.

(3) Performance thresholds.

(4) The two-year and four-year graduation rate for

first-time college students.

(5) The number and percentage of Pennsylvania

undergraduate students enrolled who received a Pell Grant

during the previous school year.

(6) The six-year graduation rate for students who are

awarded a Pell Grant in their first year.

(7) The four-year graduation rate for baccalaureate

students.

(8) Student retention rates.

(9) Bachelor's degree production per 100 full-time

enrolled students.

(10) Net tuition and fees per 120 credit hours.

(11) Post-graduation employment rates and salaries,

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including wage thresholds that reflect the added value of an

associate or baccalaureate degree.

(12) The number of students who attain credentials in

high-priority occupations in this Commonwealth.

(13) The number of nontraditional students enrolled in a

programs aligned to high-priority occupations in this

Commonwealth.

(14) The number of high school students who are dual

enrolled and the number of credits earned.

(15) The number of students who transfer to a State-

related university with at least 24 college-level credit

hours and the time to degree at the receiving institution.

(16) Other metrics provided by each State-related

university.

(17) Other metrics related to higher education that the

council deems appropriate.

(k) Weighting of performance-based funding metrics.--The

council may consider weights for the metrics in this section for

students from Pennsylvania high schools with low college

matriculation rates.

(l) Dissolution and reconstitution.--

(1) Upon transmittal of the report under subsection (i)

(4), the council shall dissolve until reconstituted under

paragraph (2).

(2) The board shall reconstitute the council every five

years to reevaluate the performance metrics utilized for the

distribution of funds to State-related universities.

Section 2033-L. Public institution of higher education

reporting.

(a) Requirements.--Notwithstanding any other provision of

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law, the following information shall be reported to the

department by public institutions of higher education:

(1) Student enrollment, including in-State and out-of-

State students, disaggregated by demographics, enrollment

status and degree type and level.

(2) Students reaching 30, 60, 90 and 120 credit hour

thresholds.

(3) Students completing credentials, including

credentials aligned to high-priority occupations.

(4) Students included in priority populations, including

low-income students, underrepresented minority students and

academically unprepared students.

(5) Any other data required by the department, including

data related to the metrics under section 2032-L.

(b) Transmittal.--A public institution of higher education

shall report information required under this section to the

department in a manner and form prescribed by the department.

required under this section on behalf of the State-owned

universities.

(d) Exclusion.--The provisions of section 118 shall not

apply to any data required under this section.

(e) Data sharing.--The department may share data collected

under this section with the board and the council.

(f) Definition.--As used in this section, the term "student"

means an individual who attends an institution of higher

education, whether enrolled on a full-time, part-time, degree-

seeking, non-degree-seeking, credit or noncredit basis.

Section 2. This act shall take effect immediately.

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