SB3965 103RD GENERAL ASSEMBLY

LRB103 41230 RJT 74447 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3965

Introduced 10/11/2024, by Sen. Kimberly A. Lightford

SYNOPSIS AS INTRODUCED:

New Act
110 ILCS 205/8	from Ch. 144, par. 188

Creates the Adequate and Equitable Public University Funding Act. Provides that, after the effective date of the Act, all general operating expenses for public universities shall be distributed by the Board of Higher Education through a funding formula for eligible public institutions and shall be administered by the Board. Defines "eligible public institution". Sets forth provisions concerning the adequacy targets and resource profiles of eligible public institutions. Provides for the distribution of State appropriations and the calculation of the base funding minimum for each eligible public institution. Provides that the Board shall oversee an accountability and transparency framework for assessing the distribution and use of all funds appropriated by the funding formula and evaluating the funds' effects on institutional outcomes pertaining to student affordability, enrollment, persistence, and outcome metrics. Provides for reporting and the establishment of an Accountability and Transparency Committee. Provides that the Board shall establish a Funding Formula Review Panel tasked with studying and reviewing topics pertaining to the implementation and impact of the funding formula. Contains provisions concerning the Board's annual budget request and the collection of data. Amends the Board of Higher Education Act. Requires the Illinois Community College Board to annually submit its budget request for the next fiscal year by November 15 of the preceding calendar year. Removes certain provisions concerning budget proposals. Effective immediately.

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Adequate and Equitable Public University Funding Act.

Section 5. Findings. The General Assembly makes all of the following findings:

(1) A thriving postsecondary education system enriches the State and its residents.

(2) Illinois requires an adequate, equitable, and stable approach to funding public universities.

(3) Historic inequities in university funding underlie current gaps in access, retention, and attainment among different groups of students in this State.

(4) The State must seek to reduce on behalf of underserved students the significant disparities in public university access, affordability, and measures of retention, progress, and degree completion, by, among other things, addressing the influence of disparities in resources by race, income, age of entry, and location.

(5) High-quality, evidence-based student support has been shown to improve enrollment and outcomes for students.

(6) Illinois' public universities have a variety of missions and characteristics.

(7) Through "A Thriving Illinois: Higher Education Paths to Equity, Sustainability, and Growth", the State has set systemwide goals for equity, sustainability, and growth, and the General Assembly must strategically fund public universities to achieve these goals.

(8) As State funding has decreased, Illinois' public universities have become increasingly reliant on tuition and fees, increasing the debt students take on to fund their education.

(9) Public universities should be funded to sufficiently achieve student, institutional, and State goals.

(10) Public higher education should be affordable for all students.

(11) Increasing public funding for public universities should be paired with increased transparency and accountability.

Section 10. Purpose. It is the purpose of this Act to establish an adequate and equitable funding formula for public universities that shall do all of the following:

(1) ensure that the State provides adequate, equitable, and stable funding for public universities that is particularly directed to serving students from groups for whom there is evidence of meaningful gaps in enrollment, retention, and completion compared to their peers;

(2) determine, for each eligible public institution, a funding level based on the unique needs and of the eligible public institution's student body and the eligible public institution's mission and mix of programs;

(3) encourage greater access and success for students who are, based on evidence, less likely to enroll, persist, progress, and complete their selected programs of study; and

(4) provide a funding increase to each eligible public institution when new funds are invested;

(5) support the diverse missions of each eligible public institution;

(6) foster economic activity and innovation;

(7) ensure that each eligible public institution has the flexibility to invest in ways that best serve the eligible public institution's students;

(8) allow for ongoing monitoring and continuous improvement of the adequate and equitable funding formula for eligible public institutions;

(9) incentivize each eligible public institution to reduce reliance on student tuition and fees with increased State investment;

(10) distribute new funding through an equitable allocation that drives resources to eligible public institution that are furthest from adequate funding; and

(11) ensure that each eligible public institution is held harmless in the transition to a new funding model.

Section 15. Definitions. In this Act:

"Academic and nonacademic support" means a per-student funding amount required to cover costs related to providing high-impact support for student retention and completion. "Academic and nonacademic support" includes, among other things, academic support for curriculum design, academic advising, career services, and tutoring, as well as nonacademic support for single stop centers, emergency aid, student mental health support, and services related to housing, transportation, and child care.

"Access adjustment" means an adjustment to access support for the increased costs of closing enrollment gaps for underserved students.

"Access support" means a per-student funding amount required to cover costs related to outreach, recruitment, and enrollment of students, including admissions and financial aid offices.

"Adequacy components" means the components of an adequate education, including the components necessary to provide instruction and student services, to advance the eligible public institution's research and public service mission, and to cover its operations and maintenance needs.

"Adequacy gap" means the funding gap between the adequacy target of an eligible public institution and the resource profile of that eligible public institution.

"Adequacy gap formula" means a formula for distributing funds among eligible public institutions based on an eligible public institution's adequacy gap, as calculated on a percentage basis.

"Adequacy target" means the amount of funding a particular eligible public institution needs to cover the expenses of instruction and student services, the eligible public institution's research and public service mission, and operations and maintenance associated with the student population the eligible public institution serves and the eligible public institution's institutional characteristics, as well as to support closing gaps in enrollment, retention, or completion for underserved students.

"Adult student" means a student who is 25 years old or older.

"Affordability" means the total expense of attendance that a student can reasonably be expected to pay given the student's means.

"Annual formula funding" means the sum of the following State appropriations for the fiscal year: the base funding minimum appropriated for each eligible public institution for the fiscal year, plus all new State formula funding appropriated for the fiscal year.

"Base funding minimum" means the minimum funding amount each year per eligible public institution to which new State formula funding is added, as calculated in subsection (b) of Section 35.

"Board" means the Board of Higher Education.

"Carnegie Classification system" means the 2021 version of the basic classification system developed and maintained by the American Council on Education, which classifies higher education institutions based on their level of degrees awarded and level of research activity.

"Concentration factor adjustment" means an adjustment to academic and nonacademic support based on the percentage of all undergraduate students who meet the requirements for a high and intensive holistic support equity adjustment.

"Core funding" means a per-student funding amount determined to be necessary to provide the following types of support before any adjustments are made:

(1) access support;

(2) academic and nonacademic support;

(3) core instructional program support;

(4) research support;

(5) public service and artistry support;

(6) institutional support; and

(7) physical plant support.

"Core instructional program adjustment" means an adjustment to core instructional program support to cover the increased costs of high-cost programs, health professional programs, and medical programs.

"Core instructional program support" means a per-student funding amount required to cover costs related to delivering instructional programs.

"Cumulative statewide adequacy gap percentage" means the sum of all eligible public institution adequacy gap percentages.

"Distribution formula" means the formula for calculating funding amounts to be allocated across eligible public institutions, as set forth in Section 35.

"Diversity programs adjustment" means an adjustment to core instructional program support for underrepresented students enrolled in high-cost programs, health professional programs, and medical programs, including undergraduate, graduate, or professional studies.

"Dollar gap formula" means a formula for distributing funds among eligible public institutions based on an eligible public institution's adequacy gap in absolute dollars.

"Eligible public institution" means each of the following public institutions of higher education: Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Southern Illinois University at Carbondale, Southern Illinois School of Medicine; Southern Illinois University at Edwardsville, the University of Illinois at Chicago, the University of Illinois at Chicago School of Medicine, the University of Illinois at Springfield, the University of Illinois at Urbana-Champaign, the University of Illinois at Urbana-Champaign School of Medicine, Western Illinois University, or any other public college or university now or hereafter established or authorized by the General Assembly and deemed to be eligible for funding through the Adequate and Equitable Funding Formula by the Board of Higher Education, except a community college.

"Eligible public institution adequacy gap percentage" means the ratio of an eligible public institution's adequacy gap and its adequacy target.

"Equitable student share" means the amount an eligible public institution should be expected to contribute toward its adequacy target that can be reasonably generated by student tuition and fees, based on the characteristics of its student body, as determined under Section 30. The equitable student share of an eligible public institution is a hypothetical calculation made for the express purpose of differentiating which portion of a particular eligible public institution's adequacy target costs should be covered by State appropriations rather than student tuition and fee payments. The use of the equitable student share calculation after the effective date of this Act shall shift responsibility to cover more of the cost of funding the adequacy target of a particular eligible public institution to be borne by State appropriations, rather than student tuition and fee payments, making higher education attendance more affordable for all students who attend the eligible public institution.

"Funding formula" means the adequate and equitable funding formula for public universities created under this Act.

"Funding Formula Review Panel" means the panel established under Section 45.

"Head count" means the rolling 3-year average of the unduplicated number of degree-seeking students enrolled in an eligible public institution.

"Health professional program adjustment" means an adjustment to core instructional program support calculated by the Board, based on cost modeling research, to cover the increased costs of offering master's and doctoral degree programs in the following disciplines: veterinary medicine, dentistry, pharmacy, physical therapy, and audiology and speech pathology.

"High-cost program adjustment" means an adjustment to core instructional program support calculated by the Board, based on cost modeling research, to cover the higher costs of offering certain programs, including, but not limited to, engineering, fine arts, and registered nursing. These programs shall be identified based on consistently higher than average costs relative to other programs at the same level across multiple institutions, time periods, and states.

"Holistic support equity adjustment" means an adjustment to academic and nonacademic support for the increased costs of closing retention gaps for underserved students.

"Institutional support" means a per-student funding amount required to cover costs related to the basic administration of an eligible public institution, such as central administration, business office, and human resource costs.

"Laboratory space adjustment" means an adjustment to physical plant support based on the cost of maintaining laboratory space.

"Medical program adjustment" means an adjustment to core instructional program support calculated by the Board, based on cost modeling research, to cover the increased costs of offering medical degree programs.

"New State formula funding" means, for a given fiscal year, all State funds appropriated for the adequate and equitable funding formula for public universities in excess of the amount provided in the previous fiscal year.

"Other resources" means a percentage of an eligible public institution's endowment that it may be expected to spend without depleting its endowment. "Other resources" does not include grants and contracts.

"Percentage gap" means the size of an eligible public institution's adequacy gap measured by dividing its resource profile by its adequacy target.

"Physical plant support" means a per-student funding amount required to cover costs related to the operation and maintenance of a physical campus of an eligible public institution, including, but not limited to, custodial services, snow removal, painting, and repairs.

"Public service and artistry support" means a per-student funding amount required to cover costs related to public service and artistry.

"Public university" means the University of Illinois, Southern Illinois University, Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Western Illinois University, or any other public college or university now or hereafter established or authorized by the General Assembly, except a community college.

"Research support" means a per-student funding amount required to cover costs related to research.

"Resource profile" means the resources available to a public university to cover the costs of the adequacy target.

"Scaled institutional ratio cut" means the calculation used to apply the reduction ratio to the amount of the funding reduction in a given fiscal year. To calculate the scaled institutional ratio cut, each eligible public institution's percentage reduction ratio shall be proportionally scaled up or down based on the total amount of reduced appropriations.

"School size adjustment" means an adjustment to institutional support for an eligible public institution with a head count of less than 20,000 students.

"Statewide adequacy gap" means the difference between (i) the cumulative total of each eligible public institution's adequacy targets and (ii) the cumulative total of each eligible public institution's resource profile.

"Statewide gap" means the statewide funding gap determined by dividing the adequacy target of all eligible public institutions by the resource profile of all eligible public institutions, measured as a percentage.

"Underserved students" means students or student groups that have gaps in enrollment, retention, or completion between their population and a relevant comparison group based on data available to the State. The Board shall determine which students or student groups meet this term through a data-informed determination of "underserved students" that shall be updated every 3 years. The Board shall consider data about postsecondary enrollment patterns, student demographics, student and family income levels, student outcomes, and geographic distribution when developing its determination.

Section 20. Adequate and equitable funding formula for public universities.

(a) After the effective date of this Act, all general operating expenses for public universities shall be distributed by the Board through the funding formula created under this Act for public universities and shall be administered by the Board.

(b) The adequate and equitable funding formula for public universities shall include all of the following:

(1) an adequacy target for each eligible public institution, as calculated in Section 25;

(2) a resource profile for each eligible public institution, as calculated in Section 30; and

(3) an adequacy gap for each eligible public institution, which is the difference between the adequacy target and the resource profile.

(c) The funding formula shall operate as follows:

(1) The General Assembly shall appropriate new funding to reduce the statewide adequacy gap.

(A) The Board shall use the formula in Section 25 to calculate the adequacy target for each eligible public institution.

(B) The Board shall use the formula in Section 30 to calculate the resource profile for each eligible public institution.

(C) After calculating the adequacy target and resource profile for each eligible public institution, the Board shall subtract the resource profile from the adequacy target to determine the adequacy gap for each eligible public institution.

(2) The Board shall use the distribution formula set forth in Section 35 to calculate the amount of the new funding to allocate for each eligible public institution.

(A) Unless the Board determines an eligible public institution to be ineligible for new funding after considering recommendations of the Accountability and Transparency Committee, each eligible public institution is eligible for new funding.

(B) The Board shall outline what conditions, if any, come with the new funding.

(3) The Board shall distribute new funding to each public university through the distribution formula set forth in Section 35.

Section 25. Adequacy target.

(a) As used in this Section, "underrepresented students" means student groups whose share of the head count of the relevant core instructional program across all eligible public institutions is less than the share of that same student group across every eligible public institution's undergraduate head count.

(b) The adequacy target for each eligible public institution is the sum of the eligible public institution's cost of providing an equitable and adequate education based on the specific characteristics of the eligible public institution and the eligible public institution's student body as calculated in accordance with this Section each fiscal year. Each eligible public institution's adequacy target shall be made up of the following adequacy components:

(1) an instruction and student services component, which shall cover the expenses of providing access support, academic and nonacademic support, and core instructional program support;

(2) a research and public service mission component, which shall cover the expenses of providing mission support and public service and artistry support; and

(3) an operations and maintenance component, which shall cover the expenses of institutional support and physical plant support.

(c) The adequacy components shall be predicated on a base, per-student, core funding amount and, if necessary, accompanying adjustments, each of which has been identified as evidence-based or as needed to enhance, based on the available data, the enrollment and graduation of underserved students, and shall be evaluated and adjusted under subsection (g) of Section 45. In Fiscal Year 2026 and in each fiscal year thereafter, the dollar value of each of the core funding elements and any adjustment represented by a dollar value identified in this Section shall be increased annually, on a cumulative basis, predicated on the Employment Cost Index (Midwest Economy) published by the Bureau of Labor Statistics of the United States Department of Labor for the 4-quarter period ending on December 31 of the immediately preceding fiscal year. The adequacy target of an eligible public institution in a fiscal year shall be the sum of its adequacy components for the fiscal year, adjusted for inflation as provided in this subsection (c).

(d) The instruction and student services adequacy component shall be determined as follows:

(1) The Board shall include in each eligible public institution's adequacy target the costs required to provide students with access support as follows:

(A) The Board shall include access support in the amount of $1,136 per student in each eligible public institution's adequacy target.

(B) The access adjustments to the access support shall be determined as follows:

(i) the Board shall include in each eligible public institution's adequacy target an additional $500 for each undergraduate student included in the eligible public institution's head count who meets the requirements for a low-access adjustment as defined in subsection (g); and

(ii) the Board shall include in each eligible public institution's adequacy target an additional $1,000 for each undergraduate student included in the eligible public institution's head count who meets the requirements for a medium-access adjustment as defined in subsection (g).

(2) The Board shall include in each eligible public institution's adequacy target the funding required to provide students with academic and nonacademic support as follows:

(A) The Board shall include academic and nonacademic support in the amount of $2,196 per student in each eligible public institution's adequacy target.

(B) The holistic support equity adjustment to the academic and nonacademic support shall be determined as follows:

(i) The Board shall include in each eligible public institution's adequacy target an additional $2,000 for each student included in the eligible public institution's head count who meets the requirements for a low holistic support equity adjustment as defined in subsection (h).

(ii) The Board shall include in each eligible public institution's adequacy target an additional $4,000 for each student included in the eligible public institution's head count who meets the requirements for a medium holistic support equity adjustment as defined in subsection (h).

(iii) The Board shall include in each eligible public institution's adequacy target an additional $6,000 for each student included in the eligible public institution's head count who meets the requirements for a high holistic support equity adjustment as defined in subsection (h).

(iv) The Board shall include in each eligible public institution's adequacy target an additional $8,000 for each student included in the eligible public institution's head count who meets the requirements for an intensive holistic support equity adjustment as defined in subsection (h).

(C) The concentration factor adjustment to academic and nonacademic support shall be determined as follows:

(i) If 75% or more of the undergraduate students included in an eligible public institution's head count meet the requirements for a high holistic support equity adjustment or an intensive holistic support equity adjustment, then each of the holistic support equity adjustment amounts described in subparagraph (B) of paragraph (2) of this subsection (d) shall be increased by a concentration factor of 50%.

(ii) If 60% or more but less than 75% of the undergraduate students included in an eligible public institution's head count meet the requirements for a high holistic support equity adjustment or an intensive holistic support equity adjustment, then each of the holistic support equity adjustment amounts described in subparagraph (B) of paragraph (2) of this subsection (d) shall be increased by a concentration factor of 30%.

(iii) If 50% or more but less than 60% of the undergraduate students included in an eligible public institution's head count meet the requirements for a high holistic support equity adjustment or an intensive holistic support equity adjustment, then each of the holistic support equity adjustment amounts described in subparagraph (B) of paragraph (2) of this subsection (d) shall be increased by a concentration factor of 10%.

(iv) If less than 50% of the undergraduate students included in an eligible public institution's head count meet the requirements for a high holistic support equity adjustment or an intensive holistic support equity adjustment, then no concentration factor may be applied to the eligible public institution's holistic support equity adjustments.

(3) The Board shall include in each eligible public institution's adequacy target the funding required to provide students with core instructional program support as follows:

(A) The Board shall include core instructional program support in the amount of $9,797 per student in each eligible public institution's adequacy target.

(B) For Fiscal Year 2026 and Fiscal Year 2027, the high-cost and high-priority programs to be included in the adjustment are as follows:

(i) Engineering (all Classification of Instructional Programs (CIP) codes 14.XXXX).

(ii) Fine arts (all CIP codes 50.XXXX).

(iii) Registered nursing (CIP code 51.38XX).

(iv) Other health professional programs (CIP codes 01.8001, 51.0201, 51.0202, 51.0204, 51.0401, 51.2001, 51.2308, and 51.3818).

(C) The core instructional program adjustment to core instructional program support shall be determined as follows:

(i) For students participating in a high-cost program at the eligible public institution, the dollar amount of the core instructional program support shall be increased by 20%.

(ii) For students participating in a health professional program at the eligible public institution, the dollar amount of core instructional program support shall be increased by 100%.

(iii) For students participating in a medical program at the eligible public institution, the dollar amount of core instructional program support shall be increased by 1,100%.

(D) The diversity programs adjustment shall be calculated using each eligible public institution's head count of underrepresented students in core instructional programs. The diversity programs adjustments shall be determined as follows:

(i) For each underrepresented student enrolled in a high-cost program at the eligible public institution, the high-cost program adjustment shall be increased by 45%.

(ii) For each underrepresented student enrolled in a health professional program at the eligible public institution, the health professional program adjustment shall be increased by 69%.

(iii) For each underrepresented student enrolled in a medical program at the eligible public institution the medical program adjustment shall be increased by 18%.

(e) The research and public service mission adequacy component shall be determined as follows:

(1) The Board shall include in each eligible public institution's adequacy target the funding required to conduct research as follows:

(A) The Board shall include research support in the amount of $600 per student in each eligible public institution's adequacy target.

(B) For the head count of an eligible public institution, a research support adjustment shall be applied to the research support provided for each student. The research support adjustment shall be determined as follows:

(i) the Board shall include in an eligible public institution's adequacy target an additional $500 for each enrolled student if the eligible public institution is under the category of D/PU: Doctoral/Professional Universities under the Carnegie Classification system;

(ii) the Board shall include in an eligible public institution's adequacy target an additional $700 for each enrolled student if the eligible public institution is under the category of R2: Doctoral Universities - High research activity under the Carnegie Classification system; or

(iii) the Board shall include in an eligible public institution's adequacy target an additional $1,200 for each enrolled student if the eligible public institution is under the category of R1: Doctoral Universities - Very high research activity under the Carnegie Classification system.

(2) The Board shall include in each eligible public institution's adequacy target the funding required to promote public service and artistry. For the head count of an eligible public institution, the eligible public institution shall include public service and artistry support in the amount of $200 per student in its adequacy target.

(f) The operations and maintenance adequacy component shall be determined as follows:

(1) The Board shall include in each eligible public institution's adequacy target the funding required to provide institutional support as follows:

(A) The Board shall include institutional support in the amount of $1,941 per student in each eligible public institution's adequacy target.

(B) The school size adjustment shall be applied to any eligible public institution with a head count of less than 20,000 students. The school size adjustment shall be calculated by subtracting the eligible public institution's head count from 20,000, dividing the result by 20,000, then multiplying that quotient by 45%. The resulting percentage shall be multiplied by the institutional support for each eligible public institution to get the per-student subsidy amount. That amount shall then be multiplied by the head count and the resulting amount shall be included in the eligible public institution's adequacy target.

(2) The Board shall include in each eligible public institution's adequacy target the funding required to maintain the eligible public institution's physical plant as follows:

(A) Each eligible public institution shall include physical plant support in the amount of $7.78 per square foot in its adequacy target.

(B) Each eligible public institution shall include in its adequacy target a laboratory space adjustment cost of $1.54 per square foot of laboratory space in the eligible public institution's physical plant.

(g) As used in this subsection (g):

"Low-access adjustment" means an adjustment for an eligible public institution having a disparity that is greater than or equal to 1% but less than 10% in statewide public university enrollment rates for any subgroup of students compared to the statewide average of all other students.

"Medium-access adjustment" means an adjustment for an eligible public institution having a 10% or greater disparity in statewide public university enrollment rates for any subgroup of students compared to the statewide average of all other students.

Eligibility for the access adjustments shall be determined using the gaps in the percentage of statewide public university enrollment of recent high school graduates for any subgroup of students compared to the statewide average of all other students, as determined by the Board. The access adjustments shall be allocated based on the head count of undergraduate students at each eligible public institution and shall be categorized as either low-access adjustments or medium-access adjustments, with student populations with larger enrollment gaps having higher adjustment amounts. Students with multiple characteristics shall be placed in the category associated with their highest characteristic.

(h) As used in this subsection (h):

"High holistic support adjustment" means an adjustment for an eligible public institution having greater than or equal to 11% disparity in retention rates for any subgroup of students compared to the statewide average of all other students.

"Intensive holistic support adjustment" means an adjustment for an eligible public institution having students belonging to 2 other categories of holistic support, one of which is high holistic support.

"Low holistic support adjustment" means an adjustment for an eligible public institution having a disparity in retention rates greater than or equal to 1% but less than 6% for any subgroup of students compared to the statewide average of all other students.

"Medium holistic support adjustment" means an adjustment for an eligible public institution having a disparity in retention rates greater than or equal to 6% but less than 11% for any subgroup of students compared to the statewide average of all other students.

The academic and nonacademic support adjustments shall be determined using the statewide gaps in the percentage of year-over-year retention for any subgroup of students compared to the statewide average of all other students, as determined by the Board. The holistic support equity adjustments shall be categorized, in descending order, as intensive, high, medium, or low, with students with multiple characteristics being placed one category above the category associated with their highest characteristic. Undergraduate students are eligible for all holistic support equity adjustments. Graduate students are eligible for the high and medium holistic support equity adjustments.

(i) The adequacy target does not include, among other expenditures, any of the following:

(1) expenditures for hospitals, athletics, auxiliaries, housing, health insurance, or deferred maintenance; or

(2) institutional financial aid.

(j) The Board, in consultation with the Funding Formula Review Panel, may, by rule, define additional academic and nonacademic support and additional high-cost programs. The Board, in consultation with the Funding Formula Review Panel, may also define by rule the maximum adjustment and number of students who are eligible for the school size adjustment.

Section 30. Resource profile.

(a) As used in this Section:

"Deemed State appropriation percentage" means that portion of an eligible public institution's core funding that State appropriations are deemed responsible to cover, predicated on a weighted average of the following apportionments of the core funding, using the head count at the eligible public institution of the following students, provided that the apportionments set forth within each paragraph are cumulative so that if a student is associated with more than one apportionment criterion, the multiple apportionments shall be added together:

(1) 30% of the core funding associated with each in-state undergraduate student included in the eligible public institution's head count; plus

(2) 50% of the core funding associated with each in-state undergraduate who is also an underrepresented student included in the eligible public institution's head count; plus

(3) 50% of the core funding associated with each in-state undergraduate student attending the eligible public institution who is qualified by income for a grant under the Monetary Award Program or the Federal Pell Grant Program; plus

(4) 10% of the core funding associated with each in-state undergraduate student included in the eligible public institution's head count who also attended a public high school located in a school district placed into Tier 1 under Section 18-8.15 of the School Code; plus

(5) 10% of the core funding associated with each in-state undergraduate student included in the eligible public institution's head count who also attended a public high school located in a school district placed into Tier 2 under Section 18-8.15 of the School Code and who is also low income; plus

(6) 25% of the core funding associated with each in-state undergraduate student included in the eligible public institution's head count who is an adult student, provided that in no event shall more than 100% of the responsibility for covering the core funding associated with any in-state undergraduate student included in an eligible public institution's head count be apportioned to State appropriations under this Section, irrespective of how many apportionment adjustments may be applicable to the student; plus

(7) 25% of the core funding associated with each in-state graduate student included in the eligible public institution's head count, plus an additional 50% of the core funding associated with each in-state graduate student who is also an underrepresented student included in the eligible public institution's head count; plus

(8) 10% of the core funding associated with each out-of-state undergraduate student included in the eligible public institution's head count; plus

(9) 25% of the core funding associated with each out-of-state undergraduate student who is also an underrepresented student included in the eligible public institution's head count; plus

(10) 25% of the core funding associated with each in-state undergraduate student included in the eligible public institution's head count who is low income, provided that in no event shall more than 35% of the responsibility for covering the core funding associated with any out-of-state undergraduate student be apportioned to State appropriations under this Section, irrespective of how many apportionment adjustments may be applicable to the student; plus

(11) 5% of the core funding associated with each out-of-state graduate student included in the eligible public institution's head count; plus

(12) 25% of the core funding associated with each out-of-state graduate student who is also an underrepresented student included in the eligible public institution's head count.

"ESS index" means, for an eligible public institution, a percentage that is equal to 100% minus the deemed State appropriation percentage applicable to the eligible public institution in the fiscal year, as determined in this Section.

(b) The resource profile shall be the sum of each eligible public institution's other resources, equitable student share, base funding minimum, and special operational funding as determined under this Act.

(1) The other resources of an eligible public institution shall be an amount that is equal to 4.2% of the most recent 4-year average of the eligible public institution's end-of-fiscal-year endowment value.

(2) The equitable student share apportionments shall be predicated on data that shows disparities among various student subgroups in enrollment and retention at each eligible public institution. In each academic year, the equitable student share of an eligible public institution shall be a dollar amount that is equal to the eligible public institution's core funding multiplied by its ESS index.

(3) The base funding minimum shall be calculated under subsection (b) of Section 35.

(4) Special operational funding is funding for scholarships and specific appropriations aimed at a specific initiative, project, or center that is aligned with one or more of the adequacy components.

(A) For Fiscal Year 2026 and Fiscal Year 2027, the following line-item State appropriations shall be included in the resource profile :

(i) at Chicago State University, the Chicago State University Education Improvement Fund and the College of Pharmacy.

(ii) at Eastern Illinois University, the equity-based student achievement program, Grow Your Own Teachers at Eastern Illinois University scholarships, and scholarship appropriations.

(iii) at Illinois State University, scholarship appropriations.

(iv) at Northern Illinois University, scholarship appropriations.

(iv) at Southern Illinois University, the Daily Egyptian, the School of Pharmacy, and scholarship appropriations.

(vi) at the University of Illinois, labor and employment relations, the Hispanic Center of Excellence, the Dixon Springs Agricultural Center, the Institute of Government and Public Affairs, the College of Dentistry, the College of Pharmacy in Rockford, and scholarship appropriations.

(B) For Fiscal Year 2028 and each fiscal year thereafter, the Board shall determine, based on the recommendations of the Funding Formula Review Panel, the special operational funding to be included in the resource profile.

(c) The resource profile may not include any of the following:

(1) tuition and fee revenue;

(2) revenue from State or federal financial aid; or

(3) special operational funding as follows:

(A) for Fiscal Year 2026 and Fiscal Year 2027, the following line-item State appropriations may not be included in the resource profile:

(i) at Southern Illinois University, the National Corn-to-Ethanol Research Center, programming at Belleville, the Office of Community Engagement, the Center for Rural Health and Social Service Development, and the Simmons Cancer Institute; and

(ii) at the University of Illinois, the Prairie Research Institute, the University of Illinois Hospital, Illinois Heart Rescue, the Illinois Innocence Project, the Climate Jobs Institute, the Illinois Fire Service Institute, emergency mosquito abatement, pet population control, carbon dioxide capture technology, carbon capture utilization and storage, and water reports under the federal Advanced Research Projects Agency.

(B) for Fiscal Year 2028 and each fiscal year thereafter, the Board shall determine, based on the recommendations of the Funding Formula Review Panel, the special operational funding to be included in the resource profile.

Section 35. Distribution of State appropriations for eligible public institutions.

(a) As used in this Section:

"Guardrail percentage" means the percentage obtained by multiplying 50% by the lesser of either:

(1) the annual inflation rate measured by the Employment Cost Index (Midwest Economy) published by the Bureau of Labor Statistics of the United States Department of Labor for the 4-quarter period ending on December 31 of the immediately preceding fiscal year, but not less than 0%; or

(2) the percentage equal to (i) the total amount of new State formula funding for the fiscal year, divided by (ii) the total amount of annual formula funding for the immediately preceding fiscal year. The dollar amount of new State formula funding in a fiscal year that remains after accounting for all guardrail distributions to be made in the fiscal year shall be referred to as the new State formula funding.

"New State formula funding" means, in a fiscal year, the dollar amount of State appropriations that exceeds the dollar amount of the annual formula funding appropriated for public universities in the immediately preceding fiscal year.

"Pro rata share" means an amount that is equal to the sum of (i) the amount of the guardrail distribution allocated to the eligible public institution for the fiscal year, as determined in subsection (e), plus (ii) the eligible public institution's adequacy gap formula distribution and dollar gap formula distribution for the fiscal year, as determined in paragraph (1) of subsection (f).

(b) The base funding minimum for each eligible public institution shall be determined as follows:

(1) For Fiscal Year 2026, the base funding minimum of an eligible public institution shall be the sum of all State appropriations made from the Education Assistance Fund or the General Revenue Fund to the eligible public institution to use as operating funds in the previous fiscal year.

(2) For Fiscal Year 2027 and each fiscal year thereafter, the base funding minimum of an eligible public institution shall be the dollar value of its base funding minimum from the immediately preceding fiscal year, increased by any new State formula funding the eligible public institution received in the immediately preceding fiscal year, provided that there was new State formula funding appropriated in the immediately preceding fiscal year. If there was no increase or decrease made to annual formula funding in the immediately preceding fiscal year, then the dollar value of the base funding minimum for the eligible public institution that pertained to the immediately preceding fiscal year shall carry forward into the next fiscal year. If there was a year-to-year reduction in annual formula funding in the immediately preceding fiscal year, then the base funding minimum for the eligible public institution in the next succeeding fiscal year shall be the State appropriations made to the eligible public institution to meet its operational expenses for the fiscal year.

(c) To enhance the stability of long-term funding for public universities, to create predictability in funding, to enhance the capacity of public universities to prepare budgets, and to create a feasible pathway to fully fund the adequacy target of each public university within a reasonable period of time, in Fiscal Year 2026 and in each fiscal year thereafter, the State shall endeavor to increase the aggregate amount of annual formula funding by an amount that is at least $135,000,000 more than the aggregate annual formula funding appropriation made in the immediately preceding fiscal year, and that amount shall be designated as the minimum target increase. The minimum target increase shall be in addition to and not a replacement for any other appropriations the State makes to support either public universities or the students who attend public universities.

The first fiscal year occurring after the adequacy target of every eligible public institution is fully funded, after accounting for inflation and enrollment changes, shall be the full funding date, and the minimum target increase shall be an amount equal to the annual formula funding amount for the fiscal year of the full funding date, increased on a cumulative basis by a percentage equal to the percentage increase, if any, in the Employment Cost Index (Midwest Economy) published by the Bureau of Labor Statistics of the United States Department of Labor for the 4-quarter period ending on December 31 of the fiscal year in which the full funding date occurs. Thereafter, the minimum target increase in a fiscal year shall be the annual formula funding amount for the immediately preceding fiscal year, increased by a percentage equal to the percentage increase, if any, in the Employment Cost Index (Midwest Economy) published by the Bureau of Labor Statistics of the United States Department of Labor for the 4-quarter period ending on December 31 of the immediately preceding fiscal year.

(d) In Fiscal Year 2026 and in each fiscal year thereafter in which the State appropriates new State formula funding, each public university shall receive an appropriation from the Board equal to the sum of its base funding minimum for the fiscal year, plus its pro rata share of new State formula funding for the fiscal year. A public university shall receive all funding on behalf of each eligible public institution that is part of that public university and then distribute that funding to each eligible public institution.

(e) In each fiscal year in which the State appropriates new State formula funding, a portion of the new State formula funding shall be set aside and used as the aggregate guardrail distribution that shall be made to all public universities in the fiscal year. The amount of the guardrail distribution a public university shall receive in an applicable fiscal year shall be equal to the dollar value of its base funding minimum for the fiscal year, multiplied by the guardrail percentage.

(f) In each fiscal year in which there is new State formula funding, 50% of the new State formula funding shall be calculated using the dollar gap formula for each eligible public institution, and the remaining 50% shall be calculated using the adequacy gap formula for each eligible public institution through the following calculations:

(1) The portion of the new State formula funding to be distributed under the dollar gap formula shall be calculated for each eligible public institution as follows:

(A) First, add the total dollar value of the adequacy gap of all eligible public institutions for the fiscal year, which shall be the total adequacy gap.

(B) Second, divide the dollar value of the adequacy gap of the eligible public institution by the dollar value of the total adequacy gap, which shall be the gap percentage A.

(C) Third, multiply the eligible public institution's gap percentage A times the amount available for the dollar gap formula for the fiscal year.

(D) The dollar value of the product obtained after calculating subparagraph (C) of this paragraph (1) shall be the dollar gap formula distribution for the eligible public institution.

(2) The portion of the new State formula funding to be distributed under the adequacy gap formula shall be calculated for each eligible public institution as follows:

(A) First, add the percentage gaps of all eligible public institutions for the fiscal year, which shall be the total percentage gap.

(B) Second, divide the percentage gap of the eligible public institution by the total percentage gap, which shall be the gap percentage B.

(C) Third, multiply the eligible public institution's gap percentage B times the amount available for the adequacy gap formula for the fiscal year.

(D) The dollar value of the product obtained after calculating subparagraph (C) of this paragraph (2) shall be the adequacy gap formula distribution for the eligible public institution.

(g) The reduction formula shall be used in a fiscal year in which the State reduces its overall appropriations to public universities relative to the previous fiscal year such that funds are insufficient to provide each public university with its base funding minimum. In each fiscal year in which there is a reduction in funds relative to the previous fiscal year, the funding reductions shall be borne by public universities using the reduction guardrail factor, which equals 25%, and the remaining 75% shall be borne by public universities using the scaled institutional ratio cut. The reduction formula shall be determined as follows:

(1) A reduction shall be determined by multiplying the amount of the reduction of funds relative to the previous fiscal year by the reduction guardrail factor. This amount is to be subtracted from the eligible public institutions' base funding minimum, with each eligible public institution absorbing the percentage of the amount that corresponds to each eligible public institution's percentage of the base funding minimum.

(2) The balance of the remaining reduction in funds shall be distributed to universities using the reduction ratio formula determined as follows:

(A) The reduction ratio formula shall be calculated by dividing the cumulative statewide adequacy gap percentage by each eligible public institution's adequacy gap percentage and multiplying the result by the percentage decrease in the current fiscal year's appropriation compared to the prior fiscal year's appropriation.

(B) To complete the reduction calculation, each eligible public institution's percentage of the cut shall be proportionally scaled up or down to fit the total amount of the reduced appropriations. The scaled institutional ratio cut shall be scaled by:

(i) calculating the difference between the statewide sum of institutional ratio cuts and the statewide sum of the guardrail reduction;

(ii) calculating the ratio of each institutional ratio cut and the statewide sum of institutional ratio cuts; and

(iii) calculating the product of subdivisions (i) and (ii) of this subparagraph (B) and subtracting that amount from each institutional ratio cut.

(C) Once the reduction calculation is complete, each eligible public institution that is part of a public university shall have its cuts aggregated into a total cut for the public university.

Section 40. Accountability and transparency framework; reporting; committee.

(a) The Board shall oversee an accountability and transparency framework for assessing the distribution and use of funds appropriated by the funding formula under Section 30 and evaluating the funds' effects on institutional outcomes pertaining to student affordability, enrollment, persistence, and outcome metrics.

(b) The Board shall report annually to the General Assembly on the implementation of the funding formula as follows:

(1) The report shall be posted publicly on the Board's website by March 1 of each year and shall, at a minimum, include all of the following:

(A) an updated adequacy target for each eligible public institution for the upcoming fiscal year, calculated from the following:

(i) the updated resource profile for each eligible public institution; and

(ii) the updated adequacy gap for each eligible public institution; and

(B) a description of the use of all resources received by eligible public institutions through the appropriations of the funding formula; and

(C) a description of the status and year-over-year progress of each eligible public institution on a series of institutional spending, institutional performance, and student support metrics described in this Section.

(2) The Board, with advice of each public university, shall specify a set of metrics and associated information designated for evaluating institutional performance and annually report on those metrics. These metrics shall include both point-in-time and longitudinal measures of institutional spending of any resources received from the funding formula and institutional performance regarding student affordability, student enrollment, student retention, and student graduation. Each eligible public institution shall provide the needed data to calculate the set of metrics and related information annually to the Board by December 31. The metrics and related information and materials shall include all of the following information:

(A) Prospective spending proposals through which eligible public institutions delineate their projected use of appropriations allocated through the funding formula for the forthcoming fiscal year. These expenditure plans shall be categorized according to accounting spending classifications established by the Board.

(B) Retrospective spending summaries through which eligible public institutions disclose the expenditure of all new appropriations received in the preceding fiscal year. These expenditure reports shall be structured based on accounting spending categories designated by the Board.

(C) Metrics measuring the institutional status and year-over-year changes in students' tuition and fees, net price, and expected share of expenses. Student affordability data and data trends shall be disaggregated by undergraduate and graduate students with further disaggregation by the student equity categories aligned with the equitable student share, set forth in paragraph (2) of subsection (b) of Section 30.

(D) Metrics measuring the institutional status and year-over-year changes in student enrollment. Enrollment data and data trends shall be disaggregated by undergraduate and graduate students with further disaggregation by the student groups who carry with them equity adjustments, as set forth in subsections (c) through (e) of Section 25.

(E) Metrics measuring the institutional status and year-over-year changes in student retention increased rates from one year of enrollment to the next, minus those that transfer from one eligible public institution to another, and minus those that receive a credential and no longer enroll thereafter. Student retention data and data trends shall be disaggregated by the student groups who carry with them equity adjustments, as set forth in subsections (c) through (e) of Section 25.

(F) Metrics measuring student graduation rates within 4 years, 5 years, and 6 years and year-over-year changes in graduation rates. Graduation data and data trends shall be disaggregated by the student groups who carry with them equity adjustments, as described in subsections (c) through (e) of Section 25.

(3) The Board shall identify at what point an adequacy gap is sufficiently small, thereby signifying an eligible public institution's capability to consistently advance toward achieving State objectives, including, but not limited to, institutional student affordability, enrollment, persistence, completion, and outcomes. If an eligible public institution's adequacy gap exceeds the level determined by the Board, the eligible public institution is exempt from the actions described in paragraph (4) of subsection (e).

(c) For each of its metrics, the Board, with advice from eligible public institutions, shall determine goals for each eligible public institution in alignment with the funding formula. These goals shall include overall progress and status goals for the eligible public institution, as well as goals that close equity gaps between students who carry with them subsidies and the institutional average. The Board shall track and report publicly on its website and in its annual written reports the progress of each eligible public institution toward those goals.

(d) The Board may review data submitted by an eligible public institution to ensure that it is responsive to the requirements of this Act. If the Board determines that the data submitted is not responsive to the requirements of this Act or the Board's rules, the Board may require an eligible public institution to submit corrected data.

(1) If an eligible public institution does not comply with data requests promptly, the Board may withhold any funds appropriated to that eligible public institution from the funding formula beyond the eligible public institution's base funding minimum until the proper data is submitted.

(2) If the Board determines that an eligible public institution has reported revenue or expenditures in the wrong category as set by the Board, the Board may reclassify those revenues or expenditures.

(e) To aid the Board in upholding the accountability and transparency framework and in reporting its findings in Fiscal Year 2026, the Executive Director of the Board shall establish an Accountability and Transparency Committee tasked with conducting pertinent technical evaluations of each eligible public institution's resource allocation and advancement in student affordability, enrollment, persistence, and outcome metrics. The Accountability and Transparency Committee shall offer relevant and necessary technical expertise in facilitating the implementation of the accountability and transparency measures set forth in this Act, including, but not limited to, those in paragraph (4) of this subsection (e).

(1) The Accountability and Transparency Committee shall be composed of no more than 15 individuals and shall consist of Board members, policymakers, and State and national technical experts on higher education accountability systems.

Members of the Accountability and Transparency Committee shall be appointed by the Executive Director of the Board. The Accountability and Transparency Committee shall include:

(A) 4 members of the Board or their designees;

(B) one member with expertise in closing educational disparities and identifying and implementing solutions that address historic inequities in higher education;

(C) one member with expertise in providing research-based academic and student support that prepares all students to achieve success in college and a career;

(D) 2 members with expertise in public university budget and finance; and

(E) one member with expertise in university management and performance.

The Executive Director of the Board shall ensure that the membership of the Accountability and Transparency Committee includes representatives reflecting the geographic, socioeconomic, racial, and ethnic diversity of this State. Members shall be appointed to 4-year terms, except that for the initial appointments, half of the members shall be appointed to initial 2-year terms. Members may be reappointed to the Accountability and Transparency Committee, and all reappointments shall be for 4-year terms.

(2) Recommendations of the Accountability and Transparency Committee shall be made based on a simple majority vote of those Committee members present and voting. A minority opinion may also accompany any recommendation of the Accountability and Transparency Committee.

(3) The Accountability and Transparency Committee shall holistically assess progress on each of the Board's metrics. The Accountability and Transparency Committee may request an additional explanation or data from an eligible public institution, which the Committee may consider in determining if an eligible public institution has made progress toward a goal. All considerations shall be thoroughly documented and reported to the Board and the public.

(4) The Accountability and Transparency Committee may request additional data from an eligible public institution regarding spending and reporting if deemed necessary. If the Accountability and Transparency Committee determines that an eligible public institution is failing to meet progress metrics despite being adequately funded, the Accountability and Transparency Committee shall advise the Board to implement the following actions, including, but not limited to, requiring that an eligible public institution:

(A) develop a plan for ensuring adequate progress based on the resources provided;

(B) provide additional reporting on institutional spending in alignment with the components of the adequacy target;

(C) provide additional reporting on the institutional metrics set forth in this Section; and

(D) permit closer oversight for spending by the Board.

If other actions under this paragraph (4) prove to be unsuccessful, the Board may recommend restricting or pausing access to additional funds until progress has been made.

(5) The Board shall review its existing reporting requirements to ensure that the required reporting from each eligible public institution is not duplicative.

Section 45. Funding Formula Review Panel.

(a) The Board shall establish a Funding Formula Review Panel tasked with studying and reviewing topics pertaining to the implementation and impact of the funding formula. The Panel shall provide recommendations and service to the Governor, the General Assembly, and the Board.

(b) The Executive Director of the Board or the Executive Director's designee shall serve as a voting member and chairperson of the Funding Formula Review Panel.

(c) Members of the Funding Formula Review Panel shall be appointed by the Executive Director of the Board, except as otherwise provided in this Section. The Funding Formula Review Panel shall include representatives of public universities, faculty, students, families, advocacy organizations, and State government agencies, along with technical experts, and shall include:

(1) the Executive Director of the Board;

(2) one member of the House of Representatives, appointed by the Speaker of the House of Representatives;

(3) one member of the Senate, appointed by the President of the Senate;

(4) one member of the House of Representatives, appointed by the Minority Leader of the House of Representatives;

(5) one member of the Senate, appointed by the Minority Leader of the Senate;

(6) one member appointed by the Governor;

(7) 6 members from public universities, each appointed to reflect the diversity of public universities;

(8) the Executive Director of the Illinois Student Assistance Commission or the Executive Director's designee;

(9) 2 members representing an organization that advocates on behalf of public university faculty members who are each employed by a different public university;

(10) one member representing a statewide organization that has specific expertise in research-based education policy to support a healthy public education system that prepares all students to achieve success in college, a career, and civic life;

(11) one member representing a higher education advocacy organization focused on eliminating disparities in college completion in this State for low-income and first-generation college students and students of color;

(12) one member representing a statewide advocacy organization focused on improving educational and employment opportunities for women and adults;

(13) one member representing a statewide organization that has specific expertise in equity, justice, and economic prosperity for the Latino community;

(14) one member representing a statewide organization that has specific expertise in equity, justice, and economic prosperity for the Black community;

(15) 2 members with specific expertise in education finance; and

(16) 2 members representing an organization that has specific expertise in amplifying young adult voices.

The Executive Director shall ensure that the membership of the Funding Formula Review Panel includes representatives reflecting the geographic, socioeconomic, racial, and ethnic diversity of this State.

The Executive Director shall appoint a vice chairperson from the membership of the Funding Formula Review Panel.

(d) Members shall be appointed for 4-year terms, except that for the initial appointments, half of the members shall be appointed to 2-year terms. Members may be reappointed to the Funding Formula Review Panel, and all reappointments shall be for 4-year terms.

(e) Recommendations of the Funding Formula Review Panel shall be made based on a simple majority vote of those Panel members present and voting. A minority opinion may also accompany any recommendation of the Funding Formula Review Panel.

The Funding Formula Review Panel shall study topics at the direction of the General Assembly, the Board of Higher Education, or the chairperson and shall recommend any funding formula recalibrations or changes to the Board, including, but not limited to, all of the following:

(1) special operational funding for inclusion in the resource profile;

(2) equitable student share;

(3) the high-cost and high-priority program adjustments;

(4) the inclusion of graduate students throughout the funding formula;

(5) medical expenses; and

(6) additional underserved students to be included in the equity adjustments and equitable student share, including, but not limited to, student parents, undocumented students, English learners, and first-generation students.

(f) On an annual basis, the Funding Formula Review Panel shall validate the following per-student elements of the adequacy target on a cumulative basis by inflation computed using the Employment Cost Index (Midwest Economy) published by the Bureau of Labor Statistics of the United States Department of Labor for the 4-quarter period ending on December 31 of the fiscal year in which the full funding date occurs:

(1) access support;

(2) academic and nonacademic support;

(3) core instructional program support;

(4) research support;

(5) public service and artistry support;

(6) institutional support; and

(7) physical plant support.

(g) Once every 3 years, the Funding Formula Review Panel shall consider and make recommendations to the Board and General Assembly for recalibrating each of the following adjustments of the adequacy target, except for inflation adjustments under subsection (b) of Section 20, based on evidence-based practices, research, a study of average expenses, and the U.S. National Science Foundation's Higher Education Research and Development database and as reported in the Board's most recent revenue and expenditure reports:

(1) the access adjustment;

(2) the holistic support equity adjustment;

(3) the concentration factor adjustment;

(4) the core instructional program adjustment;

(5) the diversity programs adjustment;

(6) the research support adjustment;

(7) the school size adjustment; and

(8) the laboratory space adjustment.

(h) Within 5 years after the implementation of this Section and every 5 years thereafter, the Funding Formula Review Panel shall conduct a comprehensive review on the functioning of the funding formula that is aligned as much as possible to the Board's strategic plan development timeline. The Funding Formula Review Panel shall report to the Board of Higher Education, the General Assembly, and the Governor on the findings of the review.

Section 50. Board of Higher Education capacity. The Board's annual budget request shall describe any additional resources needed to support the implementation of the funding formula, the Funding Formula Review Panel, and the Accountability and Transparency Committee. The budget request shall include any relevant descriptions regarding how the Board is supporting the initial implementation of the funding formula, including establishing the necessary definitions, reviewing submitted eligible public institution data for accuracy and completeness, working with each eligible public institution to ensure the accuracy of reported data, determining whether each eligible public institution is complying with the requirements of this Act, and supporting each eligible public institution to improve the eligible public institution's performance.

Section 55. Data infrastructure.

(a) The Board's annual budget request shall describe the resources needed to support the collection of data needed to implement and recommend recalibrations of the funding formula. If the Accountability and Transparency Committee or Funding Formula Review Panel recommends additional data capacity, the Board shall consider those recommendations in developing its annual budget request.

(b) The Board shall develop guidelines for each eligible public institution receiving funds under the funding formula to submit data annually for inclusion in the funding formula.

Section 900. The Board of Higher Education Act is amended by changing Section 8 as follows:

(110 ILCS 205/8) (from Ch. 144, par. 188)

Sec. 8. The Board of Trustees of the University of Illinois, the Board of Trustees of Southern Illinois University, the Board of Trustees of Chicago State University, the Board of Trustees of Eastern Illinois University, the Board of Trustees of Governors State University, the Board of Trustees of Illinois State University, the Board of Trustees of Northeastern Illinois University, the Board of Trustees of Northern Illinois University, the Board of Trustees of Western Illinois University, and the Illinois Community College Board shall submit to the Board not later than the 15th day of November of each year its budget proposals for the operation and capital needs of the institutions under its governance or supervision for the ensuing fiscal year. The Illinois Community College Board shall also submit its budget proposal for the operational needs of the institutions under its governance or supervision for the ensuing fiscal year at this time. Each budget proposal shall conform to the procedures developed by the Board in the design of an information system for State universities and colleges.

In order to maintain a cohesive system of higher education, the Board and its staff shall communicate on a regular basis with all public university presidents. They shall meet at least semiannually to achieve economies of scale where possible and provide the most innovative and efficient programs and services.

The Board, in the analysis of formulating the annual budget request, shall consider rates of tuition and fees and undergraduate tuition and fee waiver programs at the State universities and public community colleges. The Board shall also consider the current and projected utilization of the total physical plant of each campus of a public university or community college in approving the capital budget for any new building or facility.

The Board of Higher Education shall submit to the Governor, to the General Assembly, and to the appropriate budget agencies of the Governor and General Assembly its analysis and recommendations on such budget proposals.

The Board is directed to form a broad-based group of individuals representing the Office of the Governor, the General Assembly, public community colleges institutions of higher education, State agencies, business and industry, statewide organizations representing faculty and staff, and others as the Board shall deem appropriate to devise a system for allocating State resources to public community colleges institutions of higher education based upon performance in achieving State goals related to student success and certificate and degree completion.

In each fiscal year Beginning in Fiscal Year 2013, the Board of Higher Education budget recommendations to the Governor and the General Assembly shall include allocations to public community colleges in stitutions of higher education based upon performance metrics designed to promote and measure student success in degree and certificate completion. Public university metrics must be adopted by the Board by rule, and public community college metrics must be adopted by the Illinois Community College Board by rule. These metrics must be developed and promulgated in accordance with the following principles:

(1) The metrics must be developed in consultation with public community colleges institutions of higher education, as well as other State educational agencies and other higher education organizations, associations, interests, and stakeholders as deemed appropriate by the Board.

(2) The metrics shall include provisions for recognizing the demands on and rewarding the performance of community colleges institutions in advancing the success of students who are academically or financially at risk, including first-generation students, low-income students, and students traditionally underrepresented in higher education, as specified in Section 9.16 of this Act.

(3) The metrics shall recognize and account for the differentiated missions of community colleges institutions and sectors of higher education.

(4) The metrics shall focus on the fundamental goal of increasing completion of college courses, certificates, and degrees. Performance metrics shall recognize the unique and broad mission of public community colleges through consideration of additional factors including, but not limited to, enrollment, progress through key academic milestones, transfer to a baccalaureate institution, and degree completion.

(5) The metrics must be designed to maintain the quality of degrees, certificates, courses, and programs. In devising performance metrics, the Board may be guided by the report of the Higher Education Finance Study Commission.

Each State university must submit its plan for capital improvements of non-instructional facilities to the Board for approval before final commitments are made if the total cost of the project as approved by the institution's board of control is in excess of $2 million. Non-instructional uses shall include but not be limited to dormitories, union buildings, field houses, stadium, other recreational facilities and parking lots. The Board shall determine whether or not any project submitted for approval is consistent with the strategic plan for higher education and with instructional buildings that are provided for therein. If the project is found by a majority of the Board not to be consistent, such capital improvement shall not be constructed.

(Source: P.A. 102-1046, eff. 6-7-22.)

Section 999. Effective date. This Act takes effect upon becoming law.