HOUSE AMENDED
PRIOR PRINTER'S NOS. 1559, 1713 PRINTER'S NO. 1819
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 RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JULY 11, 2024
AN ACT
1 Establishing the Performance-based Funding Council and providing <--
2 for its powers and duties.
3 AMENDING THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), ENTITLED "AN <--
4 ACT RELATING TO THE PUBLIC SCHOOL SYSTEM, INCLUDING CERTAIN
5 PROVISIONS APPLICABLE AS WELL TO PRIVATE AND PAROCHIAL
6 SCHOOLS; AMENDING, REVISING, CONSOLIDATING AND CHANGING THE
7 LAWS RELATING THERETO," PROVIDING FOR INSTITUTIONS OF HIGHER
8 EDUCATION AND FOR PERFORMANCE-BASED FUNDING COUNCIL.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Short title. <--
12 This act shall be known and may be cited as the Performance-
13 based Funding Council Act.
14 Section 2. Definitions.
15 The following words and phrases when used in this act shall
16 have the meanings given to them in this section unless the
17 context clearly indicates otherwise:
18 "Council." The Performance-based Funding Council established
19 by this act.
 1 "Department." The Department of Education of the
2 Commonwealth.
3 "State-related university." The following institutions:
4 (1) The Pennsylvania State University.
5 (2) The University of Pittsburgh.
6 (3) Temple University.
7 Section 3. Performance-based Funding Council.
8 (a) Establishment.--The Performance-based Funding Council is
9 established for the purpose of the development of a new system
10 to distribute funding to the State-related universities. The
11 system shall utilize performance-based metrics designed to
12 increase degree attainment, encourage affordability in higher
13 education, meet workforce needs and grow the economy.
14 (b) Membership.--
15 (1) The council shall consist of voting members
16 appointed under paragraph (2) and nonvoting members, who
17 shall serve in an advisory role, described under paragraph
18 (3).
19 (2) The voting members of the council shall be:
20 (i) An individual appointed by the Governor.
21 (ii) An individual appointed by the President pro
22 tempore of the Senate.
23 (iii) An individual appointed by the Minority Leader
24 of the Senate.
25 (iv) An individual appointed by the Speaker of the
26 House of Representatives.
27 (v) An individual appointed by the Minority Leader
28 of the House of Representatives.
29 (3) The nonvoting members of the council shall be:
30 (i) The President of The Pennsylvania State
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 1 University or a designee.
2 (ii) The President of the University of Pittsburgh
3 or a designee.
4 (iii) The President of Temple University or a
5 designee.
6 (4) An individual appointed under paragraph (2) may not
7 be employed by or serve on the governing body of a State-
8 related university or other university or college in this
9 Commonwealth.
10 (c) Chairperson.--The voting members of the council shall
11 appoint a member to serve as the chairperson.
12 (d) Council meetings.--The meetings of the council shall be
13 held bimonthly and at the call of the chairperson as necessary
14 and shall be conducted in accordance with the requirements of 65
15 Pa.C.S. Ch. 7 (relating to open meetings).
16 (e) Quorum.--A majority of the voting members of the council
17 shall constitute a quorum, and a quorum shall be required to
18 vote on actions to be taken by the council.
19 (f) Council actions.--A two-thirds vote of the voting
20 members of the council shall be required for all actions taken
21 by the council.
22 (g) Administrative and technical support.--
23 (1) The General Assembly shall provide administrative
24 support, meeting space and any other assistance required by
25 the council to carry out the council's powers and duties
26 under this section.
27 (2) The department, the Pennsylvania Higher Education
28 Assistance Agency and the State-related universities shall
29 provide technical support, including data, research and other
30 assistance required by the council, to carry out the
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 1 council's powers and duties under this section.
2 (h) Powers and duties.--The council shall:
3 (1) Consult with Commonwealth agencies and experts to
4 assist in carrying out the duties of this section.
5 (2) Hold public hearings at each one of the State-
6 related universities and receive input from experts and
7 interested parties, including parents and students.
8 (3) No later than March 31, 2025, develop
9 recommendations for a new system that utilizes performance-
10 based metrics to distribute:
11 (i) the reallocation of between 3% and 5% of the
12 amount appropriated in fiscal year 2023-2024; and
13 (ii) any funding in subsequent years that is more
14 than the amount appropriated to the State-related
15 universities in fiscal year 2023-2024.
16 (4) No later than April 30, 2025, transmit the
17 recommendations to the Governor, the department and the
18 General Assembly, including draft legislation to implement
19 the new system to distribute funding.
20 (i) Performance-based funding metrics.--The council shall
21 choose no more than six metrics from the following list when
22 developing the new system under subsection (h):
23 (1) A base level of funding to ensure ongoing
24 operations.
25 (2) Incentive funding.
26 (3) Performance thresholds.
27 (4) The four-year graduation rate for first-time college
28 students.
29 (5) The percentage of undergraduate students enrolled
30 who received a Pell Grant during the previous school year.
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 1 (6) The six-year graduation rate for students who are
2 awarded a Pell Grant in their first year.
3 (7) The four-year graduation rate for baccalaureate
4 students.
5 (8) Student retention rates.
6 (9) Bachelor's degree production per 100 full-time
7 enrolled students.
8 (10) Net tuition and fees per 120 credit hours.
9 (11) Postgraduation employment rates and salaries,
10 including wage thresholds that reflect the added value of a
11 baccalaureate degree.
12 (12) The number of degrees attained in high-priority
13 occupations in this Commonwealth.
14 (13) The number of nontraditional students enrolled in a
15 program to up-skill or reskill in high-priority occupations
16 in this Commonwealth.
17 (14) The number of high school students who are dual
18 enrolled and the number of credits earned.
19 (15) The percentage of credits articulated.
20 (16) Other metrics provided by each State-related
21 university.
22 (17) Other metrics related to higher education that the
23 council deems appropriate.
24 (j) Default metrics.--
25 (1) If the council fails to transmit recommendations to
26 the department as required under subsection (h)(4), the
27 Pennsylvania Higher Education Assistance Agency, in
28 consultation with the department, the Department of Labor and
29 Industry, the Independent Fiscal Office and the State-related
30 universities, shall:
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 1 (i) Develop, in accordance with paragraph (2), a new
2 system that utilizes default metrics to distribute
3 funding to the State-related universities.
4 (ii) Develop draft legislation to implement the
5 system developed under subparagraph (i).
6 (iii) Transmit the new system developed under
7 subparagraph (i) and the draft legislation developed
8 under subparagraph (ii) to the following no later than
9 June 13, 2025:
10 (A) The Governor.
11 (B) The department.
12 (C) The General Assembly.
13 (2) The default metrics utilized under paragraph (1)(i)
14 shall:
15 (i) Consist of the following, which shall be
16 weighted equally:
17 (A) The four-year graduation rate for first-time
18 college students.
19 (B) The six-year graduation rate for students
20 who are awarded a Pell Grant in their first year.
21 (C) Net tuition and fees per 120 credit hours.
22 (D) Student retention rates.
23 (E) The number of degrees attained in high-
24 priority occupations in this Commonwealth.
25 (ii) Be used to distribute the following:
26 (A) The reallocation of 5% of the amount
27 appropriated in fiscal year 2023-2024.
28 (B) Any funding in subsequent years that is more
29 than the amount appropriated to the State-related
30 universities in fiscal year 2023-2024.
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 1 (iii) Be in effect until such time that the council
2 transmits recommendations to the department as required
3 under subsection (h)(4).
4 (3) The following shall apply to administrative costs of
5 the Pennsylvania Higher Education Assistance Agency:
6 (i) Of the money appropriated to State-related
7 universities for any fiscal year, up to $500,000 shall be
8 allocated to the Pennsylvania Higher Education Assistance
9 Agency to pay administrative costs associated with the
10 agency's work under paragraph (1).
11 (ii) For an allocation under subparagraph (i), the
12 following shall apply:
13 (A) Each State-related university shall
14 contribute an equal share of the amount allocated.
15 (B) The money contributed under clause (A) shall
16 be paid out of the amount appropriated to each State-
17 related university for the fiscal year in which the
18 money is allocated.
19 Section 4. Review.
20 The council shall reconvene every five years to reevaluate
21 the performance metrics utilized for the distribution of funds
22 to State-related universities.
23 Section 5. Effective date.
24 This act shall take effect July 1, 2024, or immediately,
25 whichever is later.
26 SECTION 1. THE ACT OF MARCH 10, 1949 (P.L.30, NO.14), KNOWN <--
27 AS THE PUBLIC SCHOOL CODE OF 1949, IS AMENDED BY ADDING AN
28 ARTICLE TO READ:
29 ARTICLE XX-L
30 INSTITUTIONS OF HIGHER EDUCATION
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 1 SUBARTICLE A
2 PRELIMINARY PROVISIONS
3 SECTION 2001-L. DEFINITIONS.
4 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ARTICLE
5 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
6 CONTEXT CLEARLY INDICATES OTHERWISE:
7 "AGENCY." THE PENNSYLVANIA HIGHER EDUCATION ASSISTANCE
8 AGENCY.
9 "BOARD." THE STATE BOARD OF HIGHER EDUCATION ESTABLISHED
10 UNDER SECTION 2010-L.
11 "COMMUNITY COLLEGE." AN INSTITUTION CREATED UNDER ARTICLE
12 XIX-A OR THE ACT OF AUGUST 24, 1963 (P.L.1132, NO.484), KNOWN AS
13 THE COMMUNITY COLLEGE ACT OF 1963.
14 "COUNCIL." THE PERFORMANCE-BASED FUNDING COUNCIL ESTABLISHED
15 UNDER SUBARTICLE C.
16 "DEPARTMENT." THE DEPARTMENT OF EDUCATION OF THE
17 COMMONWEALTH.
18 "FINANCIAL AID." FUNDING TO HELP A STUDENT PAY FOR
19 POSTSECONDARY EDUCATION, INCLUDING GRANTS, WORK STUDY, LOANS AND
20 SCHOLARSHIPS.
21 "HIGH-PRIORITY OCCUPATION." AN OCCUPATION IDENTIFIED BY THE
22 DEPARTMENT OF LABOR AND INDUSTRY UNDER THE ACT OF DECEMBER 18,
23 2001 (P.L.949, NO.114), KNOWN AS THE WORKFORCE DEVELOPMENT ACT.
24 "HIGHER EDUCATION SCHOLARSHIP LAW." THE ACT OF JANUARY 25,
25 1966 (1965 P.L.1546, NO.541), REFERRED TO AS THE HIGHER
26 EDUCATION SCHOLARSHIP LAW.
27 "INDEPENDENT INSTITUTION OF HIGHER EDUCATION." AN
28 INSTITUTION OF HIGHER EDUCATION WHICH IS OPERATED NOT FOR
29 PROFIT, LOCATED IN AND INCORPORATED OR CHARTERED BY THE
30 COMMONWEALTH AND ENTITLED TO CONFER DEGREES AS SPECIFIED IN 24
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 1 PA.C.S. § 6505 (RELATING TO POWER TO CONFER DEGREES) AND TO
2 APPLY TO ITSELF THE DESIGNATION "COLLEGE" OR "UNIVERSITY" AS
3 PROVIDED FOR BY THE STANDARDS AND QUALIFICATIONS PRESCRIBED BY
4 THE STATE BOARD OF EDUCATION UNDER 24 PA.C.S. CH. 65 (RELATING
5 TO PRIVATE COLLEGES, UNIVERSITIES AND SEMINARIES).????
6 "INSTITUTION OF HIGHER EDUCATION." AS DEFINED IN SECTION
7 1501-L.
8 "INSTITUTIONAL AID." FINANCIAL AID OFFERED TO AN ELIGIBLE
9 STUDENT DIRECTLY BY AN INSTITUTION OF HIGHER EDUCATION,
10 INCLUDING MERIT AID, GIFT AID AND ATHLETIC AWARDS.
11 "PELL GRANT." THE FEDERAL PELL GRANT OR ANY SUCCESSOR
12 PROGRAM.
13 "PENNSYLVANIA STATE GRANT." A GRANT OR SCHOLARSHIP AWARDED
14 UNDER THE HIGHER EDUCATION SCHOLARSHIP LAW.
15 "PRIVATE SCHOLARSHIP." FINANCIAL AID AWARDS FUNDED BY
16 ENTITIES OTHER THAN THE FEDERAL OR STATE GOVERNMENT, INCLUDING
17 AWARDS BY COMPANIES, SERVICE GROUPS, FOUNDATIONS, ORGANIZATIONS
18 AND INDIVIDUALS.
19 "PUBLIC INSTITUTION OF HIGHER EDUCATION." A STATE-OWNED
20 UNIVERSITY, COMMUNITY COLLEGE OR STATE-RELATED UNIVERSITY.
21 "STATE-OWNED UNIVERSITY." AN INSTITUTION WHICH IS PART OF
22 THE STATE SYSTEM OF HIGHER EDUCATION UNDER ARTICLE XX-A.
23 "STATE-RELATED UNIVERSITY." THE PENNSYLVANIA STATE
24 UNIVERSITY, THE UNIVERSITY OF PITTSBURGH, TEMPLE UNIVERSITY AND
25 LINCOLN UNIVERSITY.
26 "SYSTEM." THE STATE SYSTEM OF HIGHER EDUCATION ESTABLISHED
27 UNDER ARTICLE XX-A.
28 SUBARTICLE B
29 (RESERVED)
30 SUBARTICLE C
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 1 PERFORMANCE-BASED FUNDING COUNCIL
2 SECTION 2030-L. SCOPE OF SUBARTICLE.
3 THIS SUBARTICLE RELATES TO THE PERFORMANCE-BASED FUNDING
4 COUNCIL.
5 SECTION 2031-L. DEFINITIONS.
6 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS SUBARTICLE
7 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
8 CONTEXT CLEARLY INDICATES OTHERWISE:
9 "STATE-RELATED UNIVERSITY." THE FOLLOWING INSTITUTIONS:
10 (1) THE PENNSYLVANIA STATE UNIVERSITY.
11 (2) THE UNIVERSITY OF PITTSBURGH.
12 (3) TEMPLE UNIVERSITY.
13 SECTION 2032-L. PERFORMANCE-BASED FUNDING COUNCIL.
14 (A) PURPOSE.--THE PERFORMANCE-BASED FUNDING COUNCIL IS
15 ESTABLISHED AND SHALL DEVELOP A PROCESS TO DISTRIBUTE FUNDING TO
16 THE STATE-RELATED UNIVERSITIES. THE PROCESS SHALL UTILIZE
17 PERFORMANCE-BASED METRICS DESIGNED TO INCREASE DEGREE
18 ATTAINMENT, ENCOURAGE AFFORDABILITY IN HIGHER EDUCATION, MEET
19 WORKFORCE NEEDS AND GROW THE ECONOMY.
20 (B) GOALS.--THE GOALS OF THE COUNCIL IN THE DEVELOPMENT OF
21 THE PROCESS SHALL BE:
22 (1) PREDICTABILITY TO AVOID DRAMATIC CHANGES OVER TIME
23 TO THE INDIVIDUAL INSTITUTIONS OF HIGHER EDUCATION OR THE
24 OVERALL SECTOR.
25 (2) OUTCOMES DRIVEN TO ALIGN TO THE PRIORITIES OF THE
26 COMMONWEALTH.
27 (3) TRANSPARENCY TO INCREASE PUBLIC TRUST.
28 (4) RESOURCES AND INCENTIVES TO INCREASE STUDENT ACCESS
29 AND ATTAINMENT.
30 (C) MEMBERSHIP.--
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 1 (1) THE COUNCIL SHALL CONSIST OF VOTING MEMBERS
2 APPOINTED UNDER PARAGRAPH (2) AND NONVOTING MEMBERS, WHO
3 SHALL SERVE IN AN ADVISORY ROLE, DESCRIBED UNDER PARAGRAPH
4 (3).
5 (2) THE VOTING MEMBERS OF THE COUNCIL SHALL CONSIST OF
6 THE FOLLOWING MEMBERS OF THE STATE BOARD OF HIGHER EDUCATION
7 UNDER SECTION 2010-L(C):
8 (I) THE SECRETARY OF EDUCATION APPOINTED UNDER
9 SECTION 2010-L(C)(1).
10 (II) ONE MEMBER OF THE SENATE APPOINTED BY THE
11 PRESIDENT PRO TEMPORE OF THE SENATE APPOINTED UNDER
12 SECTION 2010-L(C)(3).
13 (III) ONE MEMBER OF THE SENATE APPOINTED BY THE
14 MINORITY LEADER OF THE SENATE APPOINTED UN