SB0013sam001 104TH GENERAL ASSEMBLY

Sen. Kimberly A. Lightford

Filed: 4/16/2025

10400SB0013sam001 LRB104 07750 LNS 24977 a

AMENDMENT TO SENATE BILL 13

AMENDMENT NO. ______. Amend Senate Bill 13 by replacing everything after the enacting clause with the following:

"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 sufficiently to 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 support" includes, but is not limited to, support for curriculum design, faculty, and staff training, academic advising, career services, tutoring, disability resource services, and research initiatives.

"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 dollar or percentage 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.

"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.

"Base net tuition revenue" means the average of net tuition revenue for an eligible public institution for each of Fiscal Years 2023, 2024, and 2025.

"Base net tuition revenue per student" means the base net tuition revenue for an eligible public institution divided by the institution's average head count for Fiscal Years 2023, 2024, and 2025.

"Board" means the Board of Higher Education.

"Carnegie Classification system" means the most recent version of the Research Activity Designations system developed and maintained by the American Council on Education, which classifies higher education institutions.

"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 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.

"Current enrollment" means the unduplicated number of degree-seeking students enrolled in an eligible public institution in the fall of the most recent academic year for which data is available.

"Dentistry program adjustment" means an adjustment to core instructional program support calculated by the Board, to cover the increased cost of offering dentistry degree programs.

"Distribution formula" means the formula for calculating funding amounts to be provided to each eligible public institution, 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, pharmacy programs, physician's assistant programs, dentistry 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, including the Southern Illinois University School of Medicine; Southern Illinois University at Edwardsville; the University of Illinois at Chicago, including the University of Illinois at Chicago School of Medicine; the University of Illinois at Springfield; the University of Illinois at Urbana-Champaign, including 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, 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.

"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" or "per-student" means the rolling 3-year average of the unduplicated number of degree-seeking individuals enrolled in an eligible public institution, independent of the number of credit hours the individual is taking.

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

"High-cost program adjustment" means an adjustment to core instructional program support calculated by the Board 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 ratio cut" means the calculation used to apply the reduction ratio to the amount of the funding reduction in a given fiscal year.

"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.

"International student" means a foreign student who has studied at a foreign secondary school or university or requires a visa to study in the United States.

"Laboratory space" has the meaning as specified in United States Department of Education's "Postsecondary Education Facilities Inventory and Classification Manual" and reported by public universities to Board in the annual Resource Allocation and Management Program (RAMP) document.

"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 to cover the increased costs of offering medical degree programs.

"Net tuition revenue" means the gross tuition and mandatory fee revenue of an eligible public institution for a fiscal year, subtracting scholarships and waivers awarded to students in that fiscal year. Gross tuition and mandatory fees under this calculation do not include student health insurance fees. Scholarships and waivers to be subtracted include those provided from general appropriations and institution revenue. Scholarships and waivers provided by any source outside of the institution, including nonprofit organizations, federal sources, including, but not limited to, Pell grants, and State sources, including, but not limited to, Monetary Award Program grants, shall not be subtracted from gross tuition and mandatory fee revenue in this calculation.

"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.

"Nonacademic support" includes, but is not limited to, academic success programs that serve underrepresented, first-generation, low-income students, mental health and counseling services, resource centers, cultural or identity centers, experiential learning, transfer initiatives, housing, childcare, emergency aid, and other wrap-around services.

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

"Pharmacy program adjustment" means an adjustment to core instructional program support calculated by the Board to cover the increased cost of offering pharmacy degree programs.

"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.

"Physician's assistant program adjustment" means an adjustment to core instructional program support calculated by the Board to cover the increased cost of offering physician's assistant degree programs.

"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.

"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 in the manner prescribed in subsection (d) of Section 35 and through the funding formula created under this Act for public universities.

(b) The funding formula shall operate as follows:

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

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

(3) 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.

(4) The Board shall use the distribution formula set forth in Section 35 to calculate the amount of the new funding to each eligible public institution. The Board shall outline what conditions, if any, come with the new funding as established in Section 40.

(d) By January 15 annually, the Board shall publish on its website and provide to the Governor and General Assembly the adequacy target, resource profile, and adequacy gap for each eligible public institution and shall make recommendations for appropriations for the upcoming fiscal year. Based on its recommendations, the Board shall also publish the amount of new funding to allocate to each eligible public institution.

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 per student adequacy components and institutional adequacy components, as calculated in this Section.

(c) The adequacy components adjustments shall be evaluated and adjusted under subsection (j) of Section 45. In Fiscal Year 2026 and in each fiscal year thereafter, the dollar value of each of the base amounts and any adjustment represented by a dollar value identified in this Section shall be increased annually, on a cumulative basis, by a percentage equal to the percentage change, 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. 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 Board shall include in each eligible public institution's adequacy target the amount required to provide students with access support as follows:

(1) Access support in the base amount of $1,136 per student.

(2) Access adjustments to the access support base shall be determined as follows:

(A) an additional $500 for each undergraduate included in the eligible public institution's head count who meets the requirements for a low-access adjustment as defined in subsection (k); and

(B) an additional $1,000 for each undergraduate included in the eligible public institution's head count who meets the requirements for a medium-access adjustment as defined in subsection (k).

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

(1) Academic and nonacademic support in the base amount of $2,196 per student.

(2) A holistic support equity adjustment to the academic and nonacademic support base, determined as follows:

(A) 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 (l).

(B) 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 (l).

(C) 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 (l).

(D) 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 (l).

(3) A concentration factor adjustment to the academic and nonacademic support base, determined as follows:

(A) If 75% or more of the undergraduates 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 paragraph (2) of this subsection (e) shall be increased by a concentration factor of 50%.

(B) If 60% or more but less than 75% of the undergraduates 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 paragraph (2) of this subsection (e) shall be increased by a concentration factor of 30%.

(C) If 50% or more but less than 60% of the undergraduates 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 paragraph (2) of this subsection (e) shall be increased by a concentration factor of 10%.

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

(1) Core instructional program support in the base amount of $9,797 per student.

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

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

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

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

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

(3) A high-cost program adjustment to core instructional program support base, determined as follows:

(A) The core instructional program support base amount shall be increased by 20% for each student participating in a high-cost program at the eligible public institution and shall be increased by an additional 45% for each underrepresented student participating in a high-cost program.

(B) The core instructional program support base amount shall be increased by 100% for each student participating in a health professional program at the eligible public institution and shall be increased by an additional 87% for each underrepresented student participating in a health professional program.

(C) The core instructional program support base amount shall be increased by 330% for each student participating in a pharmacy program at the eligible public institution and shall be increased by an additional 44% for each underrepresented student participating in a pharmacy program.

(D) The core instructional program support base amount shall be increased by 330% for each student participating in a physician's assistant program at the eligible public institution and shall be increased by an additional 18% for each underrepresented student participating in a physician's assistant program.

(E) The core instructional program support base amount shall be increased by 610% for each student participating in a dentistry program at the eligible public institution and shall be increased by an additional 61% for each underrepresented student participating in a dentistry program.

(F) The core instructional program support base amount shall be increased by 1,400% for each student participating in a medical program at the eligible public institution and shall be increased by an additional 18% for each underrepresented student participating in a medical program.

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

(1) Research support in the base amount of $600 per student.

(2) A research support adjustment, determined as follows:

(A) an additional $500 for each student included in the eligible public institution's head count if the eligible public institution is designated as a Research College and University under the Carnegie Classification system;

(B) an additional $700 for each student included in the eligible public institution's head count if the eligible public institution is under the category of R2: High Research Spending and Doctorate Production under the Carnegie Classification system; or

(C) an additional $1,200 for each student included in the eligible public institution's head count if the eligible public institution is under the category of R1: Very High Research Spending and Doctorate Production under the Carnegie Classification system.

(h) The Board shall include in each eligible public institution's adequacy target the base amount of $200 per head count to promote public service and artistry.

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

(1) Institutional support in the base amount of $1,941 per student.

(2) A school size adjustment 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 base amount to generate a per-student adjustment. That adjustment shall then be multiplied by the head count.

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

(1) Physical plant support in the base amount of $7.78 per square foot as reported in the Board's Capital RAMP documents.

(2) A laboratory space adjustment of $1.54 per square foot of laboratory space.

(k) As used in subsection (d):

"Low-access adjustment" means a per-student adjustment for a student in any subgroup of students at 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 compared to the statewide average of all other students.

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

Students with multiple characteristics shall be placed in the category associated with their highest characteristic.

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

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

"Intensive holistic support equity adjustment" means a per-student adjustment for a student in any 2 subgroups of students at an eligible public institution eligible for the holistic support adjustment, one of which is high holistic support.

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

"Medium holistic support equity adjustment" means a per-student adjustment for a student in any subgroup of students at an eligible public institution having a disparity in retention rates greater than or equal to 6% but less than 11% 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 holistic support equity, high holistic support equity, medium holistic support equity, or low holistic support equity, 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.

(m) 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.

(n) 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:

"Adjusted net tuition revenue" means the dollar amount that is equal to the eligible public institution's base net tuition revenue per student multiplied by the current enrollment and multiplied by its net tuition revenue index for that academic year.

"Net tuition revenue index" means the weighted average of the following per-student adjustments; 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) a 10% reduction weight for each in-State undergraduate student included in the eligible public institution's current enrollment; plus

(2) a 35% reduction weight for each in-State undergraduate or graduate student included in the eligible public institution's current enrollment who meets the requirements for an intensive holistic support or high holistic support equity adjustment as defined in subsection (l) of Section 25; plus

(3) a 0% reduction weight for all other students.

(b) The Board shall, by January 15 annually, calculate each eligible public institution's resource profile. The resource profile shall be the sum of each eligible public institution's adjusted net tuition revenue, base funding minimum, and special operational funding as determined under this Act.

(1) In each academic year, the adjusted net tuition revenue of an eligible public institution shall be calculated under this Section.

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

(3) 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 from the General Professions Dedicated Fund.

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

(iii) at Illinois State University, scholarship appropriations from the State College and University Trust Fund.

(iv) at Northern Illinois University, scholarship appropriations from the State College and University Trust Fund.

(iv) at Southern Illinois University, the Daily Egyptian, the School of Pharmacy from the State College and University Trust Fund, and scholarship appropriations from the State College and University Trust Fund.

(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 from the General Professions Dedicated Fund, and scholarship appropriations from the State College and University Trust Fund.

(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) for Fiscal Year 2026 and Fiscal Year 2027, the following line-item State appropriations:

(A) 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

(B) 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.

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

(a) As used in this Section:

"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 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 initial funding amount 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 initial funding amount increased by any new State formula funding the eligible public institution received in the immediately preceding fiscal year as outlined in subsection (e).

(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 formula funding, each public university shall receive a distribution from the Board to meet its operational expenses equal to its pro rata share of State formula funding for the fiscal year, minus the sum of its base funding minimum, as calculated for Fiscal Year 2026 by the Board per subsection (b). By the 15th of each month of the fiscal year, the Board shall voucher to the Comptroller one-twelfth of each public university's total distribution. A public university shall receive the distribution on behalf of each eligible public institution that is part of that public university and then distribute funding to each eligible public institution.

The sum of the initial funding amount, as calculated for Fiscal Year 2026 by the Board per subsection (b), shall be appropriated in Fiscal Year 2026 and in each fiscal year thereafter from the State to the board of trustees of each public university to meet its operational expenses.

(e) In each fiscal year in which there is new State formula funding, 50% of the new State formula funding shall be distributed using the dollar gap formula and the remaining 50% shall be distributed using the adequacy gap formula through the following calculations:

(1) The dollar gap formula distribution 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 adequacy gap formula distribution 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 by 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.

(f) The reduction formula shall be used in a fiscal year in which the State reduces its annual formula funding appropriations relative to the previous fiscal year such that funds are insufficient to provide each public university with its base funding minimum. The reduction formula shall be determined as follows:

(1) By dividing the statewide adequacy gap by each eligible public institution's adequacy gap and multiplying the result by the percentage decrease in the current fiscal year's appropriation compared to the prior fiscal year's appropriation. The resulting percentage for each eligible public institution is then multiplied by its base funding minimum.

(2) Scale this by calculating the ratio of each institutional ratio cut to the statewide sum of institutional ratio cuts and then multiplying this result for each eligible public institution by the amount of reduction in funds.

(3) The total cut to each public university shall be the aggregate sum of the cuts to all eligible public institutions that are a part of that public university.

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

(a) The Board shall oversee an accountability and transparency framework for assessing the distribution, use, and student outcomes of funds provided through this Act. The framework shall be aligned with and complement the reporting set forth in the Board of Higher Education Act and any publicly reported metrics.

(b) The Board, in consultation with the Accountability and Transparency Committee established under subsection (e), shall report annually to the Governor, the General Assembly, and the board of trustees of each public university on the implementation of the funding formula as follows:

(1) The report shall be posted publicly on the Board's website by January 15, 2026 and by January 15 each year thereafter and shall, at a minimum, include all of the following:

(A) the percentage of each eligible public institution's adequacy target funded as of June 30 of the prior fiscal year;

(B) the use of new appropriations received by each eligible public institution for the prior fiscal year, which shall supplement reporting under subsection (b) of Section 13.5 of the State Finance Act and be based on accounting categories established by the Board;

(C) metrics, including, but not limited to, measuring student retention data and data trends disaggregated by the student groups who carry with them equity adjustments, as set forth in Section 25;

(D) metrics, including, but not limited to, measuring each eligible public institution's current 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, as set forth in Section 25;

(E) metrics, including, but not limited to, 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 Section 25;

(F) metrics, including, but not limited to, measuring undergraduate student graduation rates within 4, 5, and 6 years and year-over-year changes in undergraduate graduation rates and for graduate students reporting graduation rates in alignment with degree level, program type, and credit-hour requirement; undergraduate and graduate student graduation rates shall be disaggregated by the student groups who carry with them equity adjustments, as set forth in Section 25;

(G) any actions taken by the Board under subsection (d), including justification; and

(H) plans from each eligible public institution on 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.

(2) No later than January 1, 2026, the Board shall, in consultation with public universities, submit a plan to the Governor and the General Assembly that outlines financial reporting expectations with respect to prospective spending proposals and retrospective spending summaries under this Section and any conforming changes to current accounting structures and financial reporting expectations. This plan shall include all opportunities to streamline current reporting with new expectations such that universities do not have to submit information that is duplicative or unnecessary in administering the formula.

(c) The Board shall specify at what point an eligible public institution's adequacy gap is sufficiently small that it should be consistently advancing 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 specified, the eligible public institution is exempt from the actions described in subsection (d).

(d) If the Board determines that an eligible public institution is failing to meet progress metrics despite being adequately funded according to subsection (c), the Board may implement the following actions, including, but not limited to, requiring that an eligible public institution:

(1) develop a new plan for ensuring adequate progress based on the resources provided or updating its equity plan to improve progress;

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

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

(4) direct the public university to create or modify its spending plan for new formula funds to address equity gaps and achieve the metrics outlined in this Act; and

(5) if other actions under this subsection (d) prove to be unsuccessful within a reasonable period of time of not less than 3 years, recommend to the General Assembly as part of its annual budget recommendations that the eligible public institution's access to additional funds be restricted or paused until progress has been made.

The Board shall adopt rules as necessary to implement this subsection (d).

(e) To aid the Board in maintaining the accountability and transparency framework and in reporting its findings, the Executive Director of the Board shall establish an Accountability and Transparency Committee. The Accountability and Transparency Committee shall offer relevant and necessary technical expertise, guidance, review, and recommendations to the Executive Director by December 15 each year in designing and assessing metrics and preparing the report under subsection (b). The Accountability and Transparency Committee shall also make recommendations for the Board to fulfill its responsibilities under subsections (c) and (d).

(1) The Accountability and Transparency Committee shall be composed of no more than 11 individuals and shall consist of Board members, policymakers, and State and national technical experts on higher education accountability systems.

Except as otherwise provided, 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, appointed by the Chairperson of the Board;

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

(C) one member with experience working in higher education and 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 experience working in higher education and with expertise in public university budgeting and finance;

(E) one member with experience working in higher education and with expertise in university management;

(F) one member with experience working in higher education and with expertise in performance management and evaluation; and

(G) one member with experience working in higher education and with expertise as determined by the Executive Director of the Board.

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.

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) one member from each of the public universities;

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

(9) one member that represents a public university faculty, recommended by a statewide organization that represents public university faculty;

(10) one member that represents a public university faculty, recommended by another statewide organization that represents public university faculty;

(11) 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;

(12) 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;

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

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

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

(16) 2 members with specific expertise in education finance;

(17) 2 members representing an organization that has specific expertise in amplifying young adult voices; and

(18) one member representing faculty from a public university.

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) net tuition revenue, though no recalibrations or changes may be made for a period of 5 years after the effective date of this Act;

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

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

(5) additional underserved students to be included in the holistic support adjustments, including, but not limited to, student parents, undocumented students, English learners, students with disabilities, and first-generation students.

(f) No sooner than 3 years but no later than 7 years after the effective date of this Act, the Funding Formula Review Panel shall provide to the Board, the General Assembly, and the Governor a report containing a review of and recommendations concerning the health professional program adjustment, pharmacy program adjustment, dentistry program adjustment, and medical program adjustment set forth in Section 25. The report shall include, but not be limited to, a review of the revenue and expenditures for each health professional program within the State, a comparison to nationwide revenue and expenditure data for such programs, and recommended changes to the high-cost program adjustment to the core instructional program support base for the specified programs, and the projected impact any such recommended adjustments would have on adequacy targets, adequacy gaps, and distribution.

(g) No sooner than 3 years and no more than 5 years after the effective date of this Act, the Funding Formula Review Panel shall provide a review of and recommendation on the distribution of funds to the Board, the General Assembly, and the Governor.

(h) In consultation with public universities, the Board shall collect data on all of the named subgroups by January 1, 2026.

(i) 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.

(j) 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 (c) of Section 25, 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.

(k) 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 include 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 include the resources needed to support the Board's 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 any additional data required for inclusion in the funding formula.

(c) The State Board of Education shall enter into an intergovernmental agreement with the Board of Higher Education within 60 days after the effective date of this Act to provide appropriate student level data for purposes of establishing the adequacy target for each eligible public institution and the formula funding level. The intergovernmental agreement shall include, but not be limited to, the date by which the data must be annually transmitted to the Board of Higher Education, the parameters necessary for the Board of Higher Education to calculate the components of the formula as required under this Act, and security provisions to guarantee the protection of student data.

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, and the Board of Trustees of Western Illinois University shall submit to the Board not later than the 15th day of November of each year their its budget proposals for the operation and capital needs of the institutions under their its governance or supervision for the ensuing fiscal year. The Illinois Community College Board shall submit to the Board by December 15 of each year its budget proposal for the operation and capital needs of the institutions under its governance or supervision for the ensuing fiscal year. 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 public community the State universities and 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 institutions 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; 103-940, eff. 8-9-24; revised 8-23-24.)

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