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    On page 6 of the Senate Education Committee engrossed bill, delete lines 4 to 24, inclusive, and insert:

"

            (1)    If the projected state general fund increase allows, the higher education system may receive funding through the normal budgeting process for performance funding. Any sum appropriated from the general fund for the purpose of performance funding shall be provided to the Board of Regents. The Board of Regents shall then determine the allocation of funds to the institutions it governs that reflect institutional performance and system strategic investments. For fiscal years 2014 and 2015, funds appropriated for performance funding shall be awarded to the higher education institutions based on improvements in the following areas:

            (a)    One-half of the performance funding shall be based on the number of new graduates with special emphasis on those graduates with degrees in science, technology, engineering, and mathematics or other critical need areas as determined by the Council on Higher Education Policy Goals, Performance, and Accountability established in section 6 of this Act; and

            (b)    One-half of the funding shall be based on the growth of expenditures for research;

                For fiscal year 2016 and in subsequent fiscal years, the performance funding shall be awarded to the Board of Regents based on criteria established by the Council of Higher Education Policy Goals, Performance and Accountability; and

            (2)    If the higher education system receives the performance funding in subdivision (1), and the cost of the performance funding is less than the projected state general fund increase, the higher education institutions may also receive, through the normal budgeting process, a mission expansion increase calculated pursuant to this subsection to reflect expanded student services and increases in enrollments and credit hour completions. If the performance funding provided pursuant to subdivision (1), and the amount calculated in this subdivision for a mission expansion increase is greater than the projected state general fund increase, each higher education institution shall receive a pro rata share of the total amount calculated. The mission expansion increase shall be calculated as follows:

            (a)    Each institution of higher education shall receive a payment equal to one-half of the average state appropriation per higher education student for each full-time equivalent enrollment in the previous fiscal year that exceeded the total full-time equivalent enrollment in the year preceding the previous fiscal year; and

            (b)    Each institution of higher education shall also receive a payment equal to one-half of the average state appropriation per higher education student for each full-time equivalent of credit hour completions in the previous fiscal year that exceeded the

total full-time equivalent of credit hour completions in the year preceding the previous fiscal year. The full-time equivalent of credit hour completions for which an institution is entitled to a payment pursuant to this section shall be calculated as follows:

            (i)    For the previous fiscal year, at each degree level, divide the total number of credit hours completed at that institution by the number of credit hours required to be a full-time equivalent student;

            (ii)    For the year prior to the previous fiscal year, at each degree level, divide the total number of credit hours completed at that institution by the number of credit hours required to be a full-time equivalent student;

            (iii)    If the product of subsection (i) is greater than the product of subsection (ii), calculate the difference between the two at each degree level; and

            (iv)    Add together the results for each degree level;

                In addition to the mission expansion funding calculated pursuant to this subsection, the Legislature may also provide additional funding to institutions of higher education for the expansion of program mission; and

            (3)    If the higher education system receives the performance funding in subdivision (1) and the mission expansion increase in subdivision (2), and the cost of both of the increases is less than the projected state general fund increase, the higher education system may receive, through the normal budgeting process, an operating budget inflationary increase equal to the annual percentage change in the consumer price index for urban wage earners and clerical workers as computed by the Bureau of Labor Statistics of the United States Department of Labor for the year before the year immediately preceding the year of adjustment or three percent, whichever is less. For the purpose of this section, the operating budget does not include any portion of the budget that contains funding for salaries and benefits for any employees provided by the Legislature through the General Appropriations Act.".

    On page 7, delete lines 1 to 24, inclusive.

    On page 8, delete lines 1 to 20, inclusive.