TITLE 19. EDUCATION

PART 1. TEXAS HIGHER EDUCATION COORDINATING BOARD

CHAPTER 1. AGENCY ADMINISTRATION

SUBCHAPTER A. GENERAL PROVISIONS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts amendments to Title 19, Part 1, Chapter 1, Subchapter A, §§1.9, 1.13, and 1.16, General Provisions, without changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2315). The rules will not be republished.

This amendment will make minor conforming changes.

Texas Education Code, §61.035, authorizes the Coordinating Board to engage in rulemaking involving compliance monitoring. Texas Education Code, §61.027, provides the Coordinating Board with general rule making authority.

Rule 1.9, Training for Members of Governing Boards and Board Trustees, adds a requirement that members of governing boards provide a sworn statement to the Board that they understand their duties and responsibilities in accordance with statutory changes made by Senate Bill 37, 89th Texas Legislature, Regular Session, updating Texas Education Code, Section 61.084.

Rule 1.13, Internal Audit and Compliance Monitoring, adds a definition for Coordinating Board and distinguishes the duties of the Board itself and the Board staff. The amendment also adds a reference to §13.525 and provides that a compliance monitoring plan must be presented to the full Board rather than the Agency Operations Committee.

Rule 1.16, Contracts, Including Grants, for Materials and/or Services, provides that written notifications be provided to the Board Secretary rather than the Agency Operations Committee.

Doug Brock, General Counsel, has determined that for each of the first five years the sections are in effect there would be no fiscal implications for state or local governments as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rule. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

No comments were received regarding the adoption of the repeal.

The amendment is adopted under Texas Education Code, Sections 61.027, 61.035, and 61.084, which provide the Coordinating Board with the authority to make rules generally and specifically related to compliance monitoring and Board Training.

The adopted amendment affects Texas Education Code, Sections 61.035 and 61.084.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603090

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6375

SUBCHAPTER F. LEAVE POOLS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts new rules in Title 19, Part 1, Chapter 1, Subchapter F, §1.126 and §1.127, Leave Pools, with changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2318). The rules will be republished.

This new section updates and aligns the sick leave pool rule with statute, moves it to a more appropriate place in the chapter, and adds a rule for the family leave pool.

Texas Government Code, Chapter 661, Subchapters A and A-1, authorizes the Coordinating Board to engage in rulemaking involving sick leave pools and family leave pools.

Rule 1.126, Sick Leave Pool for Board Employees, designates the sick leave pool administrator and provides that the pool will be administered in accordance with policy.

Rule 1.127, Family Leave Pool for Board Employees, designates the family leave pool administrator and provides that the pool will be administered in accordance with policy.

Subsequent to the posting of the rules in the Texas Register, the following changes were incorporated into the adopted rule.

Section 1.126 is amended to fix a typo.

Section 1.127 is amended to fix a typo.

No comments were received regarding the adoption of the new rules.

The new sections are adopted under Texas Government Code, Sections 661.002(c) and 661.022(c), which provide the Coordinating Board with the authority to adopt rules regarding the operation of a sick leave pool and a family leave pool for Coordinating Board employees.

The adopted rules affect Texas Government Code, Sections 661.002 and 661.022.

§1.126. Sick Leave Pool for Board Employees.

A sick leave pool is established to alleviate hardship caused to an employee and the employee's family if a catastrophic illness or injury forces the employee to exhaust all leave time earned by that employee and to lose compensation from the state.

(1) The Assistant Commissioner for People Operations is designated as the pool administrator.

(2) The pool will be operated according to the Coordinating Board's Policies and Procedures.

(3) Operation of the pool shall be consistent with Texas Government Code, Chapter 661.

§1.127. Family Leave Pool for Board Employees.

A family leave pool is established to provide eligible employees more flexibility in bonding with and caring for children during a child's first year following birth, adoption, or foster placement, and caring for a seriously ill family member or the employee's own serious illness, including pandemic-related illnesses or complications caused by a pandemic.

(1) The Assistant Commissioner for People Operations is designated as the pool administrator.

(2) The pool will be operated according to the Coordinating Board's Policies and Procedures.

(3) Operation of the pool shall be consistent with Texas Government Code, Chapter 661.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603094

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6116

SUBCHAPTER AA. SICK LEAVE POOL

The Texas Higher Education Coordinating Board (Coordinating Board) adopts the repeal of Title 19, Part 1, Chapter 1, Subchapter AA, §1.900, Sick Leave Pool, without changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2319). The rule will not be republished.

This repeal was done in conjunction with a new set of rules that are in a more appropriate subchapter and are better aligned with the statute.

Texas Government Code, Chapter 661, Subchapter A, authorizes the Coordinating Board to engage in rulemaking involving the sick leave pool.

No comments were received regarding the adoption of the repeal.

The repeal is adopted under Texas Education Code, Section 661.002(c), which provides the Coordinating Board with the authority to adopt rules regarding the operation of a sick leave pool for Coordinating Board employees.

The adopted repeal affects Texas Government Code, Section 661.002.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603092

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6193

CHAPTER 2. ACADEMIC AND WORKFORCE EDUCATION

SUBCHAPTER P. APPROVAL PROCESS AND CRITERIA FOR OFF-CAMPUS EDUCATION AT PUBLIC UNIVERSITIES AND HEALTH-RELATED INSTITUTIONS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts amendments to Texas Administrative Code, Title 19, Part 1, Chapter 2, Subchapter P, §2.382 and new §2.388, Approval Process and Criteria for Off-Campus Education at Public Universities, Health-Related institutions, and Public Two-Year Colleges, with changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2320). The rules will be republished. Sections 2.380, 2.381, 2.383, 2.384, 2.386 and 2.389 are adopted without changes and the rules will not be republished.

These amendments and new sections incorporate and streamline approval processes for off-campus education at public two-year colleges (other than technical colleges). The existing rules for public two-year colleges in Chapter 4, Subchapter Q, are simultaneously being repealed. Off-campus rules for public technical colleges are simultaneously being adopted in Chapter 11, Subchapter C.

The Coordinating Board is authorized by Texas Education Code (TEC), §61.0512(a), which requires Coordinating Board approval for a new certificate or degree program, TEC, §61.0512(g), which requires prior approval from the Coordinating Board to offer off-campus courses, and TEC, §51.981, which establishes criteria for approval of off-campus employer requested programs.

The title of the subchapter is amended to incorporate public two-year colleges.

Section 2.80, Purpose and Applicability, is amended to indicate the rules also apply to a public two-year college other than a technical college.

Section 2.382, Definitions, is amended to distinguish in the definition of "Off-Campus Educational Site" the difference between public two-year colleges other than technical colleges (outside the institution's service area) and public universities and health-related institutions (away from the main campus). The section is also amended to include definitions for "Main Campus" and "Employer Requested Off-Campus Program".

Section 2.383, Standards and Criteria for Delivery of Courses and programs at an Off-Campus Educational Site, is amended for additional clarity and to reference Coordinating Board approval of off-campus educational sites, as applicable to branch campuses for community colleges.

Section 2.384, Notification Required for Off-Campus Delivery of Courses, Certificates, and Less than Fifty Percent (50%) of a Degree Program, is amended for language consistency within the rules.

Section 2.388, Employer Requested Off-Campus Programs, establishes procedures and criteria to establish an employer requested off-campus non-credit or credit program.

Section 2.389, Effective Date of Rules, specifies the rules are applicable to approvals on or after September 1, 2026.

Subsequent to the posting of the rules in the Texas Register, the following changes were incorporated into the adopted rule.

Section 2.382 is amended to clarify that the definition for Employer Requested Off-Campus Program includes either a credit or non-credit program.

Section 2.388 is amended to clarify that the employer requested program under TEC, §51.981, does not require off-campus location approval from the Coordinating Board, but does require appropriate certificate or degree program approval and by removing language that refers to standard regional notification requirements from which statute exempts employer-requested off-campus programs.

The following comments were received regarding the adoption of the amendments and new rules.

Comment: Del Mar College, Midland College, North Central Texas College, Alamo College Districts, Blinn College District,  all submitted comments concerning Coordinating Board oversight of employer requested programs under Texas Education Code, §51.981. The comments assert that the proposed rules remove Coordinating Board oversight of the development of employer-requested programs and that Texas Education Code, §51.981, only exempts programs from higher education regional council oversight. The comments raised concerns about the potential unnecessary duplication with removal of Coordinating Board approval or oversight.

Response: The Coordinating Board thanks the institutions for the comments but disagrees with the assertion that the proposed rules do not require oversight of employer-requested programs by the Coordinating Board. The language in §2.388(b) flagged in the institution's comment, "without prior approval of the Coordinating Board", is specific to the off-campus location of the program, not for approval of the program. Section 2.388(c) requires Coordinating Board approval of any new degree program developed for the purpose of the employer requested program. Section 2.388(d) requires that any modifications which fall under existing Board oversight made to a program for the purpose of an employer-requested program be submitted to the Coordinating Board for review or approval. Subsection (e) requires that an institution notify the Coordinating Board of any employer-requested program under the same provisions for off-campus delivery of a program or certificate. The provisions under (c), (d), and (e), all provide varying levels of Coordinating Board oversight for employer-requested program, requiring that institutions still follow standardized program approval and program modification procedures for all employer-requested programs.

Comment: South Texas College submitted a comment concerning the use of the term "non-credit" in the proposed new §2.388, and requested clarity on whether that employer-requested non-credit courses are included in the site notification requirements under §2.384.

Response: The Coordinating Board thanks the institution for its comment. Regarding use of the term "non-credit", the definition of Employer Requested Off-Campus Program has been amended to provide clarity that employer requested off-campus programs may be for credit or non-credit, in alignment with statute.  Regarding the site notification under §2.384, sites where non-credit courses that are part of employer requested programs should be included in the required notification. Board staff will provide additional implementation guidance after rule adoption.

The amendments and new sections are adopted under Texas Education Code, Section 61.0512(a) which requires Coordinating Board approval for a new certificate or degree program, Texas Education Code, Section 61.0512(g) which requires prior approval from the Coordinating Board to offer off-campus courses, and Texas Education Code, Section 51.981, which establishes criteria for approval of off-campus employer requested programs.

The adopted amendment and new sections affect Texas Education Code, Sections 61.0512(g), and 51.981.

§2.382. Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Off-Campus Degree Program--A degree program in which fifty percent (50%) or more of required instruction or coursework is in-person at an off-campus educational site.

(2) Off-Campus Educational Site--An additional location, which may include a branch campus or a center, approved by the institution's Board-recognized accreditor in accordance with 34 C.F.R. §600.32, and:

(A) For public universities and health-related institutions, an off-campus educational site is any site away from the main campus where the required instruction or coursework for a credit course, certificate, or degree program is delivered in-person.

(B) For public two-year colleges other than a technical college, an off-campus educational site is any site outside of the institution's service area where required instruction or coursework for a credit course, certificate, or degree program is delivered in person.

(3) Main Campus--The primary campus or campuses of an institution of higher education providing instruction and supported by on-site administration, also referred to as on-campus.

(4) Employer Requested Off-Campus Program--A credit or non-credit degree or certificate program and site requested by an employer pursuant to Texas Education Code, Chapter 51, §51.981.

§2.388. Employer Requested Off-Campus Programs.

(a) To establish an employer requested off-campus, non-credit, or credit program, an employer shall first solicit, in writing, an agreement with an institution of higher education within the uniform state service region or a public junior college's service area, as applicable, where the employer requested off-campus educational site is located.

(b) If the institution initially solicited for an agreement under subsection (a) of this section does not finalize an offer to enter into an agreement with the employer that meets the employer's specifications for the off-campus program within six weeks of the initial written offer, the employer may enter into an agreement with another institution of higher education without prior off-campus location approval of the Coordinating Board.

(c) If the employer requested off-campus program is a new degree or certificate program, an institution of higher education shall request Coordinating Board approval of the new degree or certificate program, in accordance with the requirements of this chapter concerning approval of new degree and certificate programs, prior to delivery of the employer requested off-campus program.

(d) If the employer requested off-campus program is an existing program that will be modified for the purpose of delivery for the employer, an institution shall follow the program modification requirements set forth in this chapter.

(e) An institution of higher education shall notify the Coordinating Board of the employer-requested program.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603099

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6299

The Texas Higher Education Coordinating Board (Coordinating Board) adopts the repeal of Title 19, Part 1, Chapter 2, Subchapter P, §2.388, Effective Date of Rules, without changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2322). The rule will not be republished.

This repeal allows the agency to insert a new section into the subchapter.

The Coordinating Board is authorized by Texas Education Code, §61.0512(g) and §51.981, to approve off-campus credit courses.

No comments were received regarding the adoption of the repeal.

The repeal is adopted under Texas Education Code, Sections 61.0512(g), and 51.981 which provides the Coordinating Board with the authority to approve off-campus credit courses.

The adopted repeal affects Texas Education Code, Sections 61.0512(g) and 51.981.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603101

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6299

SUBCHAPTER R. TEXAS MENTAL HEALTH PROFESSION PIPELINE PROGRAM

The Texas Higher Education Coordinating Board (Coordinating Board) adopts new rules in Title 19, Part 1, Chapter 2, Subchapter R, §§2.500 - 2.503, Texas Mental Health Profession Pipeline Program without changes to the proposed text as published in the April 24, 2026, issue of the Texas Register (51 TexReg 2559). The rules will not be republished.

These new sections establish the requirements for participation in the Texas Mental Health Profession Pipeline Program.

Texas Education Code, §61.070, creates the Texas Mental Health Profession Pipeline Program and requires the Coordinating Board to develop rules relating to program administration.

Section 2.500, Purpose and Authority, establishes the purpose of the subchapter and defines the statutory authority for developing rules.

Section 2.501, Definitions, establishes definitions specific to the subchapter.

Section 2.502, Requirements for the Texas Mental Health Pipeline Program, establishes general requirements of program, including roles and responsibilities of the Coordinating Board.

Section 2.503, Requirements for Participating Institutions, establishes requirements for each participating institution including expectations, deliverables, and annual reporting.

No comments were received regarding the adoption of the new rules.

The new sections are adopted under Texas Education Code, Section 61.070, which provides the Coordinating Board with the authority to adopt rules for the Texas Mental Health Profession Pipeline Program.

The adopted new sections affect Texas Education Code, Section 61.070.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603102

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 24, 2026

For further information, please call: (512) 427-6299

CHAPTER 4. RULES APPLYING TO ALL PUBLIC INSTITUTIONS OF HIGHER EDUCATION IN TEXAS

SUBCHAPTER Q. APPROVAL OF OFF-CAMPUS AND SELF-SUPPORTING COURSES AND PROGRAMS FOR PUBLIC INSTITUTIONS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts repeal of Title 19, Part 1, Chapter 4, Subchapter Q, §§4.270 - 4.279, Approval of Off-Campus and Self-Supporting Courses and Programs for Public Institutions, without changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2323). The rules will not be republished.

Rules relating to approval of self-supporting courses and programs have been replaced in Chapter 2, Subchapter O. Rules relating to the approval of off-campus courses and programs for public universities and health-related institutions have been replaced in Chapter 2, Subchapter P, and are being amended at the same time as this repeal to include public junior colleges. Rules relating to approval for off-campus courses and programs at Texas state technical colleges are being adopted in Chapter 11, Subchapter B, at the same time as this repeal.

Texas Education Code (TEC), §61.002, charges the Coordinating Board with "the elimination of costly duplication in program offerings, faculties, and physical plants." TEC, §61.0512(a), requires Coordinating Board approval for a new certificate or degree program. TEC, §61.0512(g), states that institutions may offer off-campus credit courses only with prior approval from the Coordinating Board.

No comments were received regarding the adoption of the repeal.

The repeal is adopted under Texas Education Code, Section 61.0512(g), which states that institutions may offer off-campus credit courses only with prior approval from the Coordinating Board.

The adopted repeal affects Texas Education Code, Sections 61.0512(g) and 51.661.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603103

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6299

SUBCHAPTER W. RESEARCH SECURITY AND FOREIGN ADVERSARY RESTRICTIONS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts new rules in Texas Administrative Code, Title 19, Part 1, Chapter 4, Subchapter W, §4.356, Gifts of De Minimis Value with changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2323). The rule will be republished.

This new section establishes a definition for gifts of "de minimis value", in accordance with statutory changes made by House Bill 127, 89th Texas Legislature, Regular Session, updating Texas Education Code (TEC) Chapters 51 and 51B.

The Coordinating Board is required by TEC, §51B.051(a) to, in consultation with the Higher Education Research Security Council, determine by rule what constitutes a gift of "de minimis value." The Coordinating Board has consulted with the Higher Education Research Security Council in proposing this rule.

Rule 4.356, Gifts of De Minimis Value, implements TEC, §51B.051(a), by defining "de minimis value" for purposes of the statutory restriction on accepting gifts from a foreign source of a foreign adversary as defined in §51B.001. The rule limits de minimis value to non-cash items under $50 that are unsolicited, non-recurring, and not offered in exchange for any official action (i.e., nominal promotional items), and specifies that cash or cash equivalents, travel or related hospitality, honoraria, non-public discounts, recurring or decision-linked items, and items where the source or intent would lead a reasonable person to believe the gift is from a foreign adversary or presents institutional security concerns.

Subsequent to the posting of the rules in the Texas Register, the following changes were incorporated into the adopted rule:

Section 4.356(b)(6) is amended to replace the prohibition on gifts where the "source, intent, or circumstances" are "unclear," to gifts where the "source, intent, or circumstances would cause a reasonable person to conclude the gift may directly or indirectly be offered from a foreign source of a foreign adversary or otherwise create a material research security, ethics, or institutional integrity concern."

The following comments were received regarding the adoption of the new rules.

Comment: The University of Texas at Austin submitted a comment with a concern that the proposed language of §4.356(b)(6) restricting gifts with unclear "source, intent, or circumstances" was ambiguous and overbroad, and should be replaced with a more clear "reasonable person" standard restricting gifts adverse to institutions' security.

Response: The Coordinating Board appreciates the feedback and has amended §4.356(b)(6). The rules now restrict gifts where the source, intent, or circumstances would lead a reasonable person to believe the gift is from a foreign adversary or presents institutional security concerns.

The new section is adopted under Texas Education Code, Section 51B.051(a), which requires the Coordinating Board to, in consultation with the Higher Education Research Security Council, determine by rule what constitutes a gift of "de minimis value."

The adopted new section affects Texas Administrative Code, Title 19, Part 1, Chapter 4, Subchapter W.

§4.356. Gifts of De Minimis Value.

(a) For purposes of Texas Education Code, §51B.051, which restricts institutions of higher education and their employees from accepting gifts from a foreign source of a foreign adversary unless the gift is of de minimis value, a "gift of de minimis value" means a non-cash item with a value of less than $50 that is unsolicited, non-recurring, and not offered in exchange for any official action (i.e., a nominal promotional item).

(b) The following are not gifts of de minimis value:

(1) cash or cash equivalents (including gift cards);

(2) travel, lodging, meals, or entertainment;

(3) honoraria;

(4) discounts not publicly available;

(5) anything recurring, tied to a business decision, or that could reasonably be viewed as influencing official action; or

(6) anything where the source, intent, or circumstances would cause a reasonable person to conclude the gift may directly or indirectly be offered from a foreign source of a foreign adversary or otherwise create a material research security, ethics, or institutional integrity concern.

(c) The acceptance of a gift of de minimis value by an institution of higher education or an employee of an institution of higher education from a foreign source of a foreign adversary as defined in Texas Education Code, §51B.001, does not violate Texas Education Code, §51B.051.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603105

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6116

CHAPTER 6. HEALTH EDUCATION, TRAINING, AND RESEARCH FUNDS

SUBCHAPTER E. TEXAS EMERGENCY AND TRAUMA CARE EDUCATION PARTNERSHIP PROGRAM

The Texas Higher Education Coordinating Board (Coordinating Board) adopts the repeal of Title 19, Part 1, Chapter 6, Subchapter E, §§6.91 - 6.96, Texas Emergency and Trauma Care Education Partnership Program, without changes to the proposed text as published in the April 10, 2026 issue of the Texas Register (51 TexReg 2324). The rules will not be republished.

This repeal removes duplicate administrative rules that have been revised and moved to Chapter 10, Subchapter H.

Texas Education Code, Chapter 61, Subchapter HH, §§61.9801 - 61.9807, authorizes the Coordinating Board to adopt rules to administer the Texas Emergency Trauma Care Education Partnership Program.

No comments were received regarding the adoption of the repeal.

The repeals are adopted under Texas Education Code, Chapter 61, Subchapter HH, Sections 61.9801 - 61.9807, which authorizes the Coordinating Board to adopt rules to administer the Texas Emergency Trauma Care Education Partnership Program. The adopted repeal affects Texas Education Code, Sections 61.9801 - 61.9807.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603111

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6299

CHAPTER 11. TEXAS STATE TECHNICAL COLLEGE SYSTEM

SUBCHAPTER C. OFF-CAMPUS RULES FOR TEXAS STATE TECHNICAL COLLEGE SYSTEM

The Texas Higher Education Coordinating Board (Coordinating Board) adopts new rules in Texas Administrative Code, Title 19, Part 1, Chapter 11, Subchapter C, §§11.42, 11.44 and 11.47, Off-Campus Rules for Texas State Technical College System with changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2325). The rules will be republished. Sections 11.40, 11.41, 11.43, 11.45, 11.46, and 11.48 are adopted without changes and will not be republished.

The new rules are designed to streamline and consolidate processes related to notification and approval of off-campus courses, certificates, and programs for the Texas State Technical College System. The new rules replace existing rules in Chapter 4, Subchapter Q, relating to the delivery of off-campus courses, certificates, and programs for community and technical colleges, which will be repealed under separate rulemaking.

Texas Education Code (TEC), §61.002, charges the Coordinating Board with "the elimination of costly duplication in program offerings, faculties, and physical plants." TEC, §61.0512(a), requires the Coordinating Board approval for a new certificate or degree program. TEC, §61.0512(g), states that institutions may offer off-campus credit courses only with prior approval from the Coordinating Board.

Section 11.40, Definitions, provides words and terms relevant to approval of and delivery of certificate and degree programs at off-campus educational sites.

Section 11.41, Standards and Criteria for Delivery of Courses and Programs at an Off-Campus Educational Site, establishes required criteria that a technical college must comply with to offer off-campus education. These criteria align with state and federal standards and ensure that each student enrolled in an off-campus degree program has access to the same quality of education as on-campus students.

Section 11.42, Notification Required for Off-Campus Delivery of Courses, Certificates, and Less than Fifty Percent (50%) Content of a Degree Program, establishes procedures for a technical college to notify the Coordinating Board of its intent to offer off-campus education, including instruction that does not meet the fifty percent (50%) content threshold. The section also identifies which site types are not required as part of the notification. This requirement is new but ensures statutory compliance with as minimal data collection as possible.

Section 11.43, Approval Required for Off-Campus Delivery of a New Certificate or Degree Program, establishes approval procedures for a technical college seeking approval for a new certificate or degree program that will be offered at an off-campus location. This section does not represent a departure from current practice for technical colleges.

Section 11.44, Approval Required for Off-Campus Delivery of an Existing Certificate or Degree Program, establishes procedures for a technical college seeking approval for an existing certificate or degree program to be offered at an off-campus location. This requirement is not new and removes the institutional requirement to submit a 50-mile notification prior to submission to the Coordinating Board. The Coordinating Board will send out a regional informal notice for a 30-day comment period for an off-campus request, which it does with new degree programs.

Section 11.45, Modifications and Phase Out of An Off-Campus Certificate or Degree Program, establishes procedures for making a modification to a certificate and degree program offered at an off-campus educational site.

Section 11.46, Statutory Exemptions from Program Approval, delineates Texas counties that are exempt from program approval requirements.

Section 11.47, Requirements for an Employer Requested Program, establishes the procedures that a technical college must follow related to TEC, §51.981.

Section 11.48, Effective Dates of Rules, specifies that the rules are effective beginning September 1, 2026.

Subsequent to the posting of the rules in the Texas Register, the following changes were incorporated into the adopted rule.

Section 11.42, Approval Required for Off-Campus Delivery of Courses, Certificates, and Less than Fifty Percent (50%) Content of a Degree Program, is amended to change the title to Notice Required for Off-Campus Delivery of Courses, Certificates, and Less than Fifty (50%) Content of a Degree Program to align with the rule.

Section 11.44(a) Approval by Notification, language replaced previous references to approval requirements in Subchapter 2L and Subchapter 2K.

Section 11.47 (a) - (b) was replaced by a new §11.47 (a) - (e) that details the requirements for programs requested by employers. Section 11.47 Requirements for an Employer Requested Program is amended to reduce confusion and clarify that the employer requested program under TEC, §51.981, does not require off-campus location approval from the Coordinating Board, but does require appropriate certificate or degree program approval.

The following comments were received regarding the adoption of the new rules.

Comments from Alamo Colleges, Del Mar College, Midland College, North Central Texas College, and Victoria College:

Comment: A concern that the proposed rules do not define regions for purpose of notification and opportunity for comment on proposed off-campus programs.

Response: The Coordinating Board acknowledges these concerns, and has made some adjustment to the language. The rules now clarify that the Coordinating Board has the authority to make informal notifications to institutions offering similar program in the region regarding new programs proposed by TSTC. This approach allows the Coordinating Board to honor variation across the state regarding what constitutes a region; for example, determining the region or area in a manner that reflects population distribution as well as geographic proximity.

Comment: A concern regarding §11.47 that the language conflicts with the provisions of TEC, §135.04(b) and §135.02. Specifically, that Texas State Technical College must establish before offering a program in the taxing district of a community college operating a career and technical program that the community college is incapable or unable to offer the program and that a need exists for the program. Additionally, TEC, §135.02 limits the location where Texas State Technical College may operate a campus or extension center.

Response: The Coordinating Board appreciates the feedback and considers that the requirements set forth in §11.47 and TEC, §51.981, only allows an institution to offer an employer requested program after they have requested in writing that the local institution provide the program and the local institution is unable to enter into an agreement within six weeks. Rule 11.47 mirrors the language proposed in Texas Administrative Code (TAC), §2.388 for community colleges and thus the employer sponsored program is not limited to TSTC.

Comment: A concern regarding TAC, §2.388(b) that the phrase "without prior approval of the Coordinating Board" be removed as it stands in tension with the remainder of the rule.

Response: While TAC, §2.388 is not part of this rule packet, substantially similar language is found in §11.47(a). The Coordinating Board modified the language in §11.47(a) to clarify that prior off-campus location approval of the Coordinating Board is not required for an employer requested program. This aligns with the remainder of §11.47 which require appropriate program approval for and employer requested program.

Comments from Texas State Technical College:

Comment: Texas State Technical College expressed concern that §11.44 and §11.47 could require employer-requested programs to go through an off-campus approval and regional comment process that could delay TSTC's ability to respond to employer needs, citing TEC, §51.981.

Response: THECB thanks Texas State Technical College for its comment and has amended the rules to clarify that the location of the employer requested program requires notification so long as it has requisite program approval.

The new sections are adopted under Texas Education Code, Sections 61.1002, 61.0512(a), and 61.0512(g), which provide the Coordinating Board with the authority to eliminate duplication in program offerings, faculties, and physical plans; requires board approval of new certificate and degree programs; and states that institutions may offer off-campus credit courses only with board prior approval, respectively.

The adopted new sections affect Texas Administrative Code, Chapter 11, Subchapter C.

§11.42. Notification Required for Off-Campus Delivery of Courses, Certificates, and Less than Fifty Percent (50%) Content of a Degree Program.

(a) The provisions under this section are subject to Notification Only approval as set out in Chapter 2, Subchapter L (relating to the Approval Process for a Career and Technical Education Certificate), and Subchapter K (relating to the Approval Process for an Applied Associate Degree) and §2.4 of this title, (relating to Types of Approval Required).

(b) Not less than once a year in a manner prescribed by the Board, a technical college shall notify the Coordinating Board of an off-campus educational site at which a career and technical education course, certificate, or less than fifty percent (50%) of required instruction and coursework for a degree program is offered.

(c) Internship, clinical, dual credit, and study abroad sites are exempt from the requirements of this section.

§11.44. Approval Required for Off-Campus Delivery of an Existing Certificate or Degree Program.

(a) A technical college shall request to offer an existing career and technical education certificate or degree program as an Off-Campus Degree Program or an Off-Campus Certificate Program. The provisions under this section are subject to approval by Notification only.

(b) The Coordinating Board shall provide informal notice and opportunity to comment to institutions of higher education that offer substantially similar programs in the region on the proposed off-campus delivery of the program in accordance with §2.7 of this title (relating to Informal Notice and Comment on Proposed Local Programs).

§11.47. Requirements for an Employer Requested Program.

(a) To establish an employer requested off-campus, non-credit, or credit program, an employer shall first solicit, in writing, an agreement with an institution of higher education within the uniform state service region or a public junior college's service area, as applicable, where the employer requested off-campus educational site is located.

(b) If the institution initially solicited for an agreement under subsection (a) of this section does not finalize an offer to enter into an agreement with the employer that meets the employer's specifications for the off-campus program within six weeks of the initial written offer, the employer may enter into an agreement with another institution of higher education without prior off-campus location approval of the Coordinating Board.

(c) If the employer requested off-campus program is a new degree or certificate program, a technical college shall request Coordinating Board approval of the new degree or certificate program, in accordance with the requirements of this chapter concerning approval of new degree and certificate programs, prior to delivery of the employer requested off-campus program.

(d) If the employer requested off-campus program is an existing program that will be modified for the purpose of delivery for the employer, a technical college shall follow the program modification requirements set forth in this chapter.

(e) A technical college shall notify the Coordinating Board of the employer-requested program.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603114

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6209

CHAPTER 13. FINANCIAL PLANNING

SUBCHAPTER J. TEXAS FUND FOR GEOGRAPHY EDUCATION

The Texas Higher Education Coordinating Board (Coordinating Board) adopts the repeal of Title 19, Part 1, Chapter 13, Subchapter J, §§13.180 - 13.186, Texas Fund for Geography Education, without changes to the proposed text as published in the April 10, 2026, issue of the Texas Register (51 TexReg 2327). The rules will not be republished.

This repeal removed unnecessary rules in the Texas Administrative Code that are no longer needed.

Texas Education Code, §61.027, authorizes the Coordinating Board to adopt and repeal rules. The fund to which the rules apply has been dissolved, and the Coordinating Board has determined that the rules are no longer required.

No comments were received regarding the adoption of the repeal.

The repeal is adopted under Texas Education Code, Section 61.027, which provides the Coordinating Board with the authority to adopt and repeal rules.

The adopted repeal affects Texas Education Code, §§61.9681- 61.9684.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603118

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 10, 2026

For further information, please call: (512) 427-6299

SUBCHAPTER T. COMMUNITY COLLEGE FINANCE PROGRAM: HIGH-DEMAND FIELDS

The Texas Higher Education Coordinating Board (Coordinating Board) adopts amendments to Title 19, Part 1, Chapter 13, Subchapter T, §13.595 and §13.597, Community College Finance Program: High-Demand Fields, without changes to the proposed text as published in the April 24, 2026, issue of the Texas Register (51 TexReg 2560). The rules will not be republished.

This amendment corrects a typographical error that incorrectly refers to Emerging Occupations rather than Essential Occupations and adds a reference to Chapter 13, Subchapter V and Subchapter W. This amendment also removes the word standard when referencing the Regional High-Demand Fields list.

Texas Education Code, §130A.101(c)(1), provides the Coordinating Board with the authority to make rules defining when a college is entitled to additional performance tier funding for awarding a credential in a high-demand occupation or appropriate proxy.

Rule 13.595(a), Essential Occupations, is amended to add a reference to §13.648, which references the current fiscal year 2026 rules in Subchapter V, and a reference to §13.668, which references the new rules beginning in fiscal year 2027 in Subchapter W. This amendment ensures that this subchapter is in line with the current rules in place for the Community College Finance Program.

Rule 13.595(b)(4) is amended to make grammatical changes to update the rule to Texas Register publishing requirements.

Rule 13.595(c)(5) is amended to correct a typographical error that incorrectly noted "Emerging Occupations" to "Essential Occupations", as this rule is specifically relating to Essential Occupations.

Rule 13.597(1), Effective Dates: High-Demand Fields, is amended to remove the word "Standard" before Regional High-Demand Fields List to eliminate confusion around the regional list the Coordinating Board provides alongside the statewide list at the beginning of the biennium. This will clarify that the Regional High-Demand Fields List refers to the high-demand occupations identified as published by the Coordinating Board and excludes additional occupations as determined through the Essential and Emerging Occupations processes.

No comments were received regarding the adoption of the amendments.

The amendments are adopted under Texas Education Code, Section 130A.101(c)(1), which provides the Coordinating Board with the authority to make rules defining when a college is entitled to additional performance tier funding for awarding a credential in a high-demand occupation or appropriate proxy.

The adopted amendment affects Texas Education Code, Section 130A.101.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603120

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 24, 2026

For further information, please call: (512) 427-6495

SUBCHAPTER U. COMMUNITY COLLEGE FINANCE PROGRAM: FORECASTING METHODOLOGY AND FINANCE POLICY

The Texas Higher Education Coordinating Board (Coordinating Board) adopts amendments to Title 19, Part 1, Chapter 13, Subchapter U, §13.624, Forecasting Fundable Outcomes, without changes to the proposed text as published in the April 24, 2026, issue of the Texas Register (51 TexReg 2563). The rule will not be republished.

This amendment corrects an imbedded rule reference and remove the upper bounding parameter to increase the precision of the forecasting methodology to fund student outcomes for public community colleges.

Texas Education Code (TEC), §130A.005, provides the Coordinating Board with the authority to adopt rules and take other actions consistent with TEC, Chapter 61, Chapter 130, and Chapter 130A, to implement House Bill 8, 88th Texas Legislature, Regular Session. In addition, TEC, §130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

Rule 13.624(c), Forecasting Fundable Outcomes, is amended to correct a reference that was inadvertently not updated when Chapter 13, Subchapter U, was amended in August 2025.

Rule 13.624(e) is amended to remove the upper bounding limitation on the forecasted outcomes. This will ensure closer alignment to forecasted outcomes and outcome growth trends.

The following comments were received regarding the adoption of the amendments.

Comment: San Jacinto College noted that the proposed amendment to §13.624(e) still includes language about "maximum allowable change" even after the upper bound is removed and is inquiring if this phrase is necessary to remain in the rule language or if it needs to be revised.

Response: The THECB thanks San Jacinto College for the question. The "maximum allowable change" also applies to the lower bounded count if the bounding is being calculated on a prior year value that is also forecasted requiring "maximum allowable change" to remain in rule language.

Comment: San Jacinto College requests that THECB provide additional technical guidance and reproducible files for the 3-model forecasting methodology and any future iterations in advance of or concurrently with published funding calculations. Because forecasting affects foundation payments, dynamic adjustments, and institutional budget planning, colleges need enough information to validate and to explain THECB's calculations to the institutional governing board and local stakeholders. Providing reproducible forecasting files would strengthen confidence in the model and help institutions distinguish between performance-based changes and technical forecasting effects.

Response: The THECB thanks San Jacinto College for the request and while this request does not relate to the proposed changes in this subchapter, agrees with the sentiment expressed. The THECB provided additional guidance alongside the FY2026 funding model and plans to continue this practice moving forward.

Comment: San Jacinto College requests and recommends that THECB consider adding, for FY27 and all future years, an appropriation-sufficiency provision to the payment-schedule rules governing dynamic adjustments, settle-up adjustments, and future foundation payments rather than adopting multiple simultaneous methodology changes that may reduce the value of outcomes before the state has had sufficient time to evaluate the effect of prior HB8 implementation changes. Such a provision would align with a "do no harm" approach. It would allow the Legislature to see the actual cost of increased student success outcomes and determine whether additional appropriations are warranted, while avoiding methodology changes that may unintentionally suppress the very outcomes the HB8 finance system is designed to encourage.

Response: The THECB thanks San Jacinto College for the request. While the request does not relate to the proposed changes in this subchapter In partnership with stakeholders and the advisory committee, the THECB has thoughtfully made model adjustments in early implementation years to support and sustain the outcomes-based model in alignment with statutory purpose and legislative intent. THECB is held to responsibly disbursing appropriations determined by the legislature, and any additional funding needed for adjustments to the model above and beyond a given fiscal year appropriation is a decision made by the legislature.

Comment: The Texas Association of Business supports the removal of the 110 percent forecasting cap, which will improve the accuracy, stability and integrity of the funding model.

Response: The THECB thanks the Texas Association of Business and agrees with the sentiment expressed.

The amendment is adopted under Texas Education Code (TEC), Section 130A.005, which provides the Coordinating Board with the authority to adopt rules and take other actions consistent with TEC, Chapter 61, Chapter 130, and Chapter 130A to implement House Bill 8, 88th Texas Legislature, Regular Session. In addition, TEC, Section 130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

The adopted amendment affects TEC, Chapter 130A, and TEC, Sections 61.059 and 130.0031.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603123

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 24, 2026

For further information, please call: (512) 427-6495

SUBCHAPTER V. COMMUNITY COLLEGE FINANCE PROGRAM: BASE AND PERFORMANCE TIER METHODOLOGY FOR FISCAL YEAR 2026

The Texas Higher Education Coordinating Board (Coordinating Board) adopts amendments to Title 19, Part 1, Chapter 13, Subchapter V, §§13.643, 13.644 and 13.646, Community College Finance Program: Base and Performance Tier Methodology for Fiscal Year 2026, without changes to the proposed text as published in the April 24, 2026, issue of the Texas Register (51 TexReg 2564). The rules will not be republished.

These amendments correct typographical errors and codify that the Credential of Value Baseline list for associate degrees for fiscal year 2026 will not change after its adoption.

Texas Education Code (TEC), §130A.005, provides the Coordinating Board with the authority to adopt rules and take other actions consistent with TEC, Chapter 61, Chapter 130, and Chapter 130A to implement. House Bill 8, 88th Texas Legislature, Regular Session. In addition, TEC, §130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

Rule 13.643(17), Definitions, is amended to correctly reference definition (34) for Semester Credit Hour.

Rule 13.644(c)(2), Base Tier Allotment, is amended to replace the phrase "funding certified data" with "fundable certified data", which is defined in Chapter 13, Subchapter U. This ensures alignment of terms across the subchapters that govern the Community College Finance Program.

Rule 13.646(b)(2)(F), Performance Tier: Fundable Outcomes, is added to clarify that the associate degrees that are identified as credentials of value will remain unchanged for the duration of all payment calculations for fiscal year 2026. This codifies the current practice of not updating the list of fundable credentials after its initial adoption, and maintaining that list during any updates to the fiscal year 2026 funding model during subsequent fiscal years to allow for consistency in budgeting for the community colleges.

Minor non-substantive grammatical errors have been corrected. Capitalization of the word chapter when preceding a number and the word subchapter when preceding a letter has been standardized throughout the rules for consistency.

No comments were received regarding the adoption of the amendments.

The amendments are adopted under Texas Education Code, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules and take other actions consistent with Texas Education Code, Chapter 61, Chapter 130, and Chapter 130A to implement. HB 8, 88th Texas Legislature, Regular Session. In addition, Texas Education Code, Section 130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

The adopted amendments affect Texas Education Code, Sections 28.0295, 61.003, 61.059, 130.003, 130.0031, 130.0034, 130.008, 130.085, 130.310, 130.352, and Chapter 130A.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603125

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 24, 2026

For further information, please call: (512) 427-6495

SUBCHAPTER W. COMMUNITY COLLEGE FINANCE PROGRAM: BASE AND PERFORMANCE TIER METHODOLOGY BEGINNING IN FISCAL YEAR 2027

The Texas Higher Education Coordinating Board (Coordinating Board) adopts new rules in Title 19, Part 1, Chapter 13, Subchapter W, §§13.660, 13.662, 13.666, and 13.669, Community College Finance Program: Base and Performance Tier Methodology Beginning in Fiscal Year 2027, with changes to the proposed text as published in the April 24, 2026, issue of the Texas Register (51 TexReg 2571). The rules will be republished. Sections 13.661, 13.663 - 13.665, 13.667, 13.668 and 13.670 are adopted without changes and will not be republished.

Specifically, this new section clarifies that Chapter 13, Subchapter W, rules apply to the Coordinating Board's calculation of foundation payments made beginning in fiscal year 2027 and future adjustments of those payments under the dynamic funding model, and it also contains a number of modifications relating to specific issue areas, as detailed below. Subsequently, Subchapter V, has continued authority for fiscal year 2026 only.

The Coordinating Board initially adopted the regular rules relating to the community college finance system in April 2025 for fiscal year 2026, including Chapter 13, Subchapter V. Subchapter W will perform the same functions as Chapter 13, Subchapter V, which establishes all definitions, methods, weights and rates for the base and performance tiers, but is applied beginning with funding year FY2027. The adopted rules make the following substantive changes for fiscal year 2027 to the rules previously adopted by the Coordinating Board for fiscal year 2026:

1. Removal of the Third-Party Credentials as a fundable outcome, as the Coordinating Board does not have the data to analyze or calculate funding for this outcome and how those credentials relate to state education and workforce needs.

2. Modification of the Academically Disadvantaged weight from 25% to 20% in both the Base Tier and Performance Tier calculations.

3. Modification of the Economically Disadvantaged weight from 25% to 20% in both the Base Tier and Performance Tier calculations.

4. Modification of the Adult Learner weight from 50% to 40% in both the Base Tier and Performance Tier calculations.

6. Modification of the three-year average to a two-year average when calculating the funding amounts after eligible outcomes are weighted.

6. Further limits the number of outcomes eligible to be funded in which one outcome of each type can be earned within a 5-year time frame, with the exception of two Level 1 certificates or continuing education certificates being allowed.

Subchapter W, maintains continuity with existing rules in Subchapter V, while making the changes listed above and ensuring the applicability of the rules beyond the 2026 fiscal year.

Texas Education Code (TEC), §130A.005, provides the Coordinating Board with the authority to adopt rules and take other actions consistent with TEC, Chapter 61, Chapter 130, and Chapter 130A to implement HB 8, 88th Texas Legislature, Regular Session. In addition, TEC, §130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

Rule 13.660, Purpose, establishes that the purpose of Subchapter W, is to implement the community college finance system established by HB 8, 88th Texas Legislature, Regular Session.

Rule 13.661, Authority, establishes the portions of the TEC that authorize the Coordinating Board to adopt rules pertaining to community college finance.

Rule 13.662, Applicability, establishes that the Coordinating Board will apply the rules in effect for the fiscal year in which the funding was delivered, unless otherwise provided. This provision provides guidance to institutions on which rules will apply as the Coordinating Board iterates and refines the community college finance framework. This also clarifies that this subchapter is applicable beginning with fiscal year 2027 base tier and performance tier calculations for funding purposes.

Rule 13.663, Definitions, lists definitions pertinent to the community college finance system. This section provides only general meanings of terms and reserves substantive policy detail for the sections described below.

Rule 13.664, Base Tier Allotment, establishes the calculations used to determine Base Tier funding that the legislature entitled community colleges to receive under TEC, §§130A.051 - 130A.056. To summarize, Base Tier funding is calculated as Instruction and Operations (I&O) minus Local Share. If Local Share is greater than Instructions and Operations, then Base Tier funding is zero.

Rule 13.665, Performance Tier Funding, establishes the components of the Performance Tier portion of community college funding, codified under TEC, Chapter 130A, Subchapter C. Performance Tier funding consists of the number of Fundable Outcomes each community college produces, weighted according to certain Fundable Outcome Weights and multiplied by relevant rates. The Coordinating Board determines institutions' weighted fundable outcome completions based on the better of the average of three fiscal years or the current fiscal year.

Rule 13.666, Performance Tier: Fundable Outcomes, describes the outcomes that are eligible to receive performance tier funding. Outcomes consist of the categories of 1) fundable credentials; 2) credential of value premium; 3) dual credit fundable outcomes; 4) transfer fundable outcomes; 5) structured co-enrollment fundable outcomes; and (6) Opportunity High School Diploma fundable outcomes. The paragraphs concerning §13.666 below focus on the specific ways in which this rule differs substantively from the analogous current rule governing fundable outcomes for fiscal year 2026.

Rule 13.666(b)(1)(D), removes the third-party credentials as a fundable outcome.

Rule 13.666(h)(3), extends the limitation of one outcome per student over a 5-year timeframe, with the exception of allowing for two certificate outcomes per student per year.

Rule 13.667, Performance Tier: Fundable Outcome Weights, establishes the weights that the Coordinating Board applies to the fundable outcomes achieved by students in the categories of economically disadvantaged, academically disadvantaged, and adult learners, for the purposes of performance tier funding, as required by Education Code, §130A.101. Institutions earn an additional weight of 20% for a fundable outcome when that outcome is achieved by an economically disadvantaged or academically disadvantaged student, and 40% for an adult learner.

Rule 13.668, Performance Tier: High-Demand Fields, establishes that an institution will receive additional weight for awarding credentials delivered in disciplines listed as a High-Demand Field. This is described in more detail in Subchapter T of this chapter.

Rule 13.669, Performance Tier: Rates, sets the monetary rates for each type of fundable outcome achieved by an institution. These fundable outcomes include the conferring of fundable credentials (including associate degrees, bachelor's degrees, and many types of workforce credentials), the credential of value premium, student completion of 15 dual credit hours, and successful student transfer to a public four-year institution. Rates are generally maintained for consistency with those set for fiscal year 2026 formula funding.

Rule 13.670, Shared Services Report, stipulates that smaller community college districts receiving a Base Tier scale adjustment must submit a report on their participation in shared services, and describes the content of this shared report. This provision carries out a statutory requirement for small schools to submit this report, codified in TEC, §130A.054(e).

Subsequent to the posting of the rules in the Texas Register, THECB staff recommend the following amendments:

Section 13.662 is amended to clarify that the applicability of this new subchapter's requirements will begin in fiscal year 2027, and the application of the subchapter's requirements to past years of historical data for the purpose of forecasting will begin in fiscal year 2027.

Section 13.666 is amended to make conforming language changes related to the transfer fundable outcome by including the phrase "or private or independent institution". This amendment maintains continuity with SB 1786, 89th Legislature, which added the private and independent institutions to the transfer fundable outcome.

Figure 19: TAC §13.669 is amended to remove third-party credentials from the list of rates, which conforms to the removal of third-party credentials as a fundable outcome.

The following comments were received regarding the adoption of the new rule.

Comment: Commit Partnership, Texas 2036, Texas PACE and San Jacinto College expressed concern regarding the reduction to the student weights, citing that reducing the financial incentive to serve these targeted populations is premature, and cuts against the original intent of the formula and sends the wrong long-term policy signal. By reducing the student weights, this would set a precedent for addressing future fiscal pressures using this mechanism rather than through evidence-based decisions. Recommendations from Commit Partnership and Texas PACE include prioritizing the Certificate Program Task Force evaluation of all currently fundable credentials within the formula to ensure they are supported by a sufficiently rigorous definition and evidentiary threshold for value and align with workforce needs.

Response: The THECB thanks Commit Partnership, Texas 2036, Texas PACE and San Jacinto College, and respectfully disagrees. A change in the student characteristic weight values is one of the tools the Legislature has provided to THECB to manage the fiscal impact of the community college finance (CCF) program during the legislative interim. However, the agency will also be considering legislative recommendations to further refine the CCF program and to manage its fiscal pressures. The purpose of the CCF program established by House Bill 8, codified in Education Code, §130A.001, is "to provide a modern and dynamic finance system that ensures that each public junior college has access to adequate state appropriations and local resources to support the education and training of the workforce of the future." The reduction of student characteristic weight values does not conflict with any element of this purpose.

Comment: Texas 2036, Texas PACE, and the Texas Association of Business commented their concerns on the removal of third-party credentials as a fundable outcome. We recognize and appreciate THECB's commitment to accountability and measurable workforce outcomes under the HB 8 framework. However, the current lack of comparable wage-record data for certain Third-Party Credentials should not automatically disqualify programs that are widely recognized and valued by employers across Texas industries. We recommend that THECB retain Third-Party Credentials as a fundable credential category, with funding withheld until their workforce value can be determined under the same standard applied to other short-term credentials. Removing Third-Party Credentials from the formula now treats a temporary data gap as a permanent policy conclusion, when the rule's structure should allow the policy to follow the evidence.

Response: The THECB thanks Texas 2036, Texas PACE and the Texas Association of Business for their comments. The agency disagrees that third party credentials should be retained as a fundable credential within the rule and disagrees that their removal from the rule is a permanent policy conclusion. The THECB does not currently have, or expect to have in the near future, the requisite underlying data, necessary to begin the implementation of third-party credentials as a fundable outcome. Retaining third-party credentials as a fundable outcome in the rule is a signal to colleges that they should plan for such programs, when as a practical matter, the agency does not expect that they will become a fundable outcome in the near future. If the agency later decides to add third-party credentials back to the rule as a fundable outcome, it will do so in a targeted and deliberate manner and amend the rules accordingly.

Comment: Texas 2036, Texas PACE and the Texas Association of Business commented on their support of the proposed cap of seven credentials within five years, which limits funding to one credential of each type per student over a five-year period, with an exception allowing up to two Level I or Continuing Education Certificates in that same window. This change reinforces the aim of incentivizing true stackability and student progression toward credentials that confer higher potential earnings, and appropriately discourages duplicative credential accrual while still allowing meaningful workforce advancement opportunities.

Response: The THECB thanks Texas 2036, Texas PACE and the Texas Association of Business for their comment and agrees with the sentiment expressed.

Comment: San Jacinto College requests additional clarification in rule that the proposed five-year limitation will not be applied retroactively, including the first fiscal year of outcomes that will be included in the five-year limitation and confirmation that credentials or outcomes earned before that year will not count against a student's future eligibility.

Response: The THECB thanks San Jacinto College and agrees that the proposed applicability of the new subchapter's requirements need clarification. As a result of the comment, the THECB has amended §13.662, Applicability, to specify that the subchapter's requirements will begin in fiscal year 2027, and that the application of the subchapter's requirements to past years of historical data for the purpose of forecasting will begin in fiscal year 2027.

Comment: San Jacinto College asks how the THECB will notify institutions that a student has already generated a fundable outcome of the same type elsewhere so that institutions will be able to model funding risk before credentials are conferred.

Response: The THECB thanks San Jacinto College for their comment. The agency agrees with San Jacinto College that institutions need information as to the prevalence of duplicate credentials at their institution. The agency will seek input from the Standing Advisory Committee for Public Junior Colleges on this issue which may be handled via procedures implementing the rule change.

Comment: San Jacinto College requests that THECB distinguish between academic associate degrees and applied associate degrees when applying the proposed five-year limitation on funding for credentials of the same type. Associate of Arts and Associate of Science degrees serve a different educational purpose than Associate of Applied Science degrees. Academic associate degrees provide broader exposure to general education outcomes and core objectives, while applied associate degrees focus more heavily on technical and workforce preparation and typically include a smaller general education component. A student who completes both an academic associate degree and an Associate of Applied Science has therefore completed two structurally different credentials with distinct and complementary value. Treating both as a single associate-degree type could unintentionally under-recognize stackable pathways that combine transfer-oriented learning with applied workforce preparation.

Response: The THECB thanks San Jacinto College for the comment. The THECB declines to make any change to the rule text as a result of the comment. Although the agency agrees that there may be instances of two complementary associate degrees, it is the agency's view that such instances are not prevalent enough to codify as an exception to the limitation.

Comment: The Texas Association of Business commented their support for the change to a two-year averaging mechanism, which will improve predictability and reduce volatility within the funding model. This adjustment will help institutions better plan for workforce demand while minimizing fluctuations tied to temporary enrollment changes or short-term credential spikes.

Response: The THECB thanks the Texas Association of Business for their comment and agrees with the sentiment expressed.

Comment: Commit Partnership requests that the agency explore evidence-based policy levers to right-size funding and strengthen long-term alignment between postsecondary outcomes and workforce needs. An example could be accelerating the work of the Certificate Programs Task Force and prioritize this work to ensure decisions about high-quality short-term credentials are grounded in clear data and evidence that identifies which programs deliver meaningful outcomes for students and aligns with workforce demand.

Response: The THECB thanks Commit Partnership for their comment. The agency agrees with the importance of evidence-based policy and in strengthening the alignment between postsecondary outcomes and workforce needs. The agency has not made any change to the rule text as a result of the comment.

The new section is adopted under TEC, Section 130A.005, which provides the Coordinating Board with the authority to adopt rules and take other actions consistent with TEC, Chapter 61, Chapter 130, and Chapter 130A to implement Tex. HB 8, 88th Texas Legislature, Regular Session. In addition, TEC, Section 130.355, permits the Coordinating Board to establish rules for funding workforce continuing education.

The adopted new section affects TEC, Sections 28.0295, 61.003, 61.059, 130.003, 130.0031, 130.0034, 130.008, 130.085, 130.310, 130.352 and Chapter 130A.

§13.660. Purpose.

The purpose of this subchapter is to implement the Community College Finance Program authorized by Texas Education Code, Chapters 61, 130, and 130A.

§13.662. Applicability.

(a) Unless otherwise provided, the Coordinating Board shall apply this subchapter to the calculation of base tier funding beginning in fiscal year 2027 and to the calculation of performance tier funding beginning in fiscal year 2027.

(b) This subchapter applies to the calculation of all relevant historical data used to inform performance tier outcome counts achieved or forecast to be achieved, which are used as direct inputs to funding calculations beginning in fiscal year 2027.

§13.666. Performance Tier: Fundable Outcomes.

(a) This section contains definitions of Fundable Outcomes eligible for receiving funding through the Performance Tier. An institution's Performance Tier funding will consist of the count of Fundable Outcomes, multiplied by weights identified in §13.667 of this subchapter (relating to Performance Tier: Fundable Outcome Weights) as applicable, multiplied by the monetary rates identified in this subchapter. Only the Fundable Outcomes identified under paragraphs (1), (4), and (5) of this subsection are eligible to qualify for a Fundable Outcome Weight category identified in §13.667(a)(1), §13.667(a)(2), or §13.667(a)(3) of this subchapter; all other Fundable Outcomes receive a weight of one under §13.667 of this subchapter. A credential's eligibility for funding as a fundable credential is subject to the limitations set out in subsection (h) of this section. Fundable Outcomes consist of the following categories:

(1) Fundable Credentials;

(2) Credential of Value Premium;

(3) Dual Credit Fundable Outcomes;

(4) Transfer Fundable Outcomes;

(5) Structured Co-Enrollment Fundable Outcomes; and

(6) Opportunity High School Diploma Fundable Outcomes.

(b) Fundable Credentials.

(1) A fundable credential is defined as any of the following:

(A) Any of the following credentials awarded by an institution that meets the criteria of a credential of value as defined in paragraph (2) or (3) of this subsection using the most recent data available prior to the year in which the credential that is otherwise eligible for funding is conferred and that the institution reported and certified to the Coordinating Board:

(i) An associate degree;

(ii) A baccalaureate degree;

(iii) A Level 1 or Level 2 Certificate;

(iv) An Advanced Technical Certificate; and

(v) A Continuing Education Certificate.

(B) An Occupational Skills Award awarded by an institution that the institution reported and certified to the Coordinating Board;

(C) An Institutional Credential Leading to Licensure or Certification (ICLC) not reported pursuant to subparagraph (B) of this paragraph and that the institution reported and certified to the Coordinating Board. The credential shall meet one of the following criteria:

(i) The credential includes no fewer than 144 contact hours or nine (9) semester credit hours; or

(ii) The credential is awarded in a high demand field, as defined in Coordinating Board rule, and includes no fewer than 80 contact hours or five (5) semester credit hours;

(2) Credential of Value Baseline - Associate Degree. A credential identified in paragraph (1)(A)(i) of this subsection must meet the Credential of Value Baseline criteria as provided by this paragraph to be eligible as a Fundable Outcome, except when that credential is conferred under the fields appearing in Figure: 19 TAC §13.666, according to the Classification of Instructional Programs promulgated by the U.S. Department of Education. When a credential identified in paragraph (1)(A)(i) of this subsection is conferred under fields appearing in Figure: 19 TAC §13.666, it must meet the Credential of Value Baseline criteria as provided by paragraph (3) of this subsection to be eligible as a Fundable Outcome. Excluding the credentials identified in Figure: 19 TAC §13.666, the baseline is met when a credential earned by a student would be expected to provide a positive return on investment and an individual self-sufficient wage within a period of five years.

Figure: 19 TAC §13.666(b)(2) (.pdf)

(A) A program demonstrates a positive return on investment when the majority of students statewide completing the credential, within a program area, are expected to accrue earnings greater than the cumulative median earnings of Texas high school graduates who do not hold additional credentials, plus recouping the net cost of attendance within five years after earning the credential.

(B) This calculation of return on investment shall include students' opportunity cost, calculated as the difference between median earnings for Texas high school graduates and estimated median earnings for students while enrolled for a period of two years.

(C) The Coordinating Board shall calculate the expected return on investment for each program based on the most current data available to the agency for the funding year for each program or a comparable program.

(D) The Coordinating Board shall determine whether a credential is expected to provide an individual self-sufficient wage within a period of five years by comparing the median real wage, as adjusted based on the Consumer Price Index calculated by the U.S. Bureau of Labor Statistics, earned by all recipients of the credential in their fifth year after receiving the credential according to all available data to the individual self-sufficient wage defined in accordance with §13.663(25) of this subchapter (relating to Definitions).

(E) In applying the methodology under this section to a program offering a credential in an emerging or essential high-demand field pursuant to §13.595(a) and (b) of this chapter (relating to Essential Occupations), the Coordinating Board may utilize other recent, relevant data, including:

(i) employer certifications provided under §13.595(b) of this chapter;

(ii) information on program design, including at minimum the cost and length of the program; and

(iii) any other information necessary for the Coordinating Bard to apply the methodology under this section to the program proposed in an emerging or essential high-demand field.

(F) The associate degrees identified as credentials of value under paragraph (2) of this subsection shall be used for any subsequent calculation for a given fiscal year.

(3) Credential of Value Baseline - Other Credentials. A credential identified in paragraph (1)(A)(ii), (iii), (iv), or (v) of this subsection and not subject to paragraph (2) of this subsection must meet the Credential of Value Baseline criteria as provided by this paragraph for eligibility as a Fundable Outcome. This baseline is met when a credential earned by a student would be expected to provide a positive return on investment within a period of ten years.

(A) A program demonstrates a positive return on investment when the majority of students statewide completing the credential, within a program area, are expected to accrue earnings greater than the cumulative median earnings of Texas high school graduates who do not hold additional credentials, plus recouping the net cost of attendance within ten years after earning the credential.

(B) This calculation of return on investment shall include students' opportunity cost, calculated as the difference between median earnings for Texas high school graduates and estimated median earnings for students while enrolled:

(i) Four years for baccalaureate degree holders;

(ii) Two years for associate degree holders; or

(iii) One year for holders of a Level 1 certificate, Level 2 certificate, Advanced Technical Certificate, or Continuing Education Certificate.

(C) The Coordinating Board shall calculate the expected return on investment for each program based on the most current data available to the agency for the funding year for each program or a comparable program.

(D) In applying the methodology under this section to a program offering a credential in an emerging or essential high-demand field pursuant to §13.595(a) and (b) of this chapter, the Coordinating Board may utilize recent, relevant data, including:

(i) employer certifications provided under §13.595(b) of this chapter;

(ii) information on program design, including at minimum the cost and length of the program; and

(iii) any other information necessary for the Coordinating Board to apply the methodology under this section to the program proposed in an emerging or essential high-demand field.

(4) Notwithstanding subsection (h) of this section, the following limitations apply to a fundable credential:

(A) For a credential under paragraph (1)(B) or (C) of this subsection, if more than one credential that the institution awarded to a student includes the same contact hours, the institution may only submit one credential for funding;

(B) If an institution awarded to a student a credential eligible for funding under paragraph (1)(B) and (C) of this subsection and those credentials share the same contact hours, the institution shall submit for funding only the credential awarded under paragraph (1)(B) of this subsection; and

(C) A fundable credential excludes a degree or certificate awarded to a non-resident student enrolled in a 100-percent online degree or certificate program as defined in §2.202(4)(A) of this title (relating to Definitions) for a student who resides out-of-state.

(c) Credential of Value Premium. An institution earns a Credential of Value Premium for each student who completes a Fundable Credential under subsection (b)(1)(A) of this section as follows:

(1) The student completes the credential of value on or before the target year for completion that, for the majority of students who complete comparable programs, would enable the student to achieve a positive return on investment within the timeframe specified for the program as described in paragraph (2) of this subsection.

(2) For each program, the Coordinating Board shall calculate the year in which the majority of comparable programs would be projected to have the majority of their students achieve a positive return on investment.

(3) Each year, the Coordinating Board shall publish a list of the target years for completion for each program.

(d) Dual Credit Fundable Outcome. An institution achieves a Dual Credit Fundable Outcome when a student has earned a minimum number of eligible dual credit semester credit hours, as defined in §13.663(16) of this subchapter (relating to Definitions).

(e) Transfer Fundable Outcome.

(1) An institution earns a transfer fundable outcome when a student enrolls in a general academic teaching institution (GAI), as defined in Texas Education Code, §61.003(3), or a private or independent institution of higher education as defined in Texas Education Code, §61.003(15), after earning at least 15 semester credit hours or semester credit hour equivalents (SCH) from a single public junior college district, subject to the following:

(A) The student is enrolled at a GAI or private or independent institution for the first time in the fiscal year for which the public junior college is eligible for a performance tier allocation, as established in this subchapter;

(B) No institution, including the institution that may be awarded a transfer fundable outcome, has achieved a structured co-enrollment fundable outcome or would otherwise achieve a structured co-enrollment fundable outcome in the same year on the basis of the student's participation in a structured co-enrollment program under subsection (f) of this section;

(C) The student earned a minimum of 15 SCHs from the public junior community college district seeking the transfer fundable outcome during the period including the fiscal year in which they enroll at the GAI or private or independent institution and the four fiscal years prior; and

(D) The attainment of the 15 SCHs satisfies the following restrictions:

(i) The transfer fundable outcome shall exclude the 15 SCHs that previously counted toward attainment of a dual credit fundable outcome for the student under subsection (d) of this section.

(ii) The transfer fundable outcome may include any SCHs earned by the student not previously counted toward a dual credit fundable outcome under subsection (d) of this section.

(2) Only one institution may earn a transfer fundable outcome for any individual student, except as provided by subparagraph (C) of this paragraph. An institution may earn the transfer fundable outcome only once per student. The Coordinating Board shall award the transfer fundable outcome in accordance with this subsection.

(A) If a student has earned 15 SCH at more than one institution prior to transfer to any GAI or private or independent institution, the Coordinating Board shall award the transfer fundable outcome to the last public junior college at which the student earned the 15 SCH eligible for funding under this section.

(B) If the student earned the 15 SCH at more than one institution during the same academic term, the Coordinating Board shall award the transfer fundable outcome to the public junior college:

(i) from which the student earned the greater number of the SCH that count toward the transfer fundable outcome during the academic term in which they earned the 15 SCH; or

(ii) if the student earned an equal number of SCH that count toward the transfer fundable outcome in the academic term in which the student earned the 15 SCH, to the institution from which the student earned a greater number of SCH that count toward the transfer fundable outcome in total.

(C) If a student has met the SCH requirements of subparagraph (B)(i) and (ii) of this paragraph at more than one public junior college, each public junior college may receive a transfer fundable outcome.

(f) Structured Co-Enrollment Fundable Outcome. An institution achieves a Structured Co-Enrollment Fundable Outcome when a student has earned a minimum number of eligible semester credit hours in a structured co-enrollment program that has been submitted and certified to the Coordinating Board as defined in §13.663(35) of this subchapter, and no institution, including the institution that may be awarded a structured co-enrollment fundable outcome, has been funded for transfer fundable outcome on the basis of the student's enrollment in a GAI under subsection (e) of this section.

(g) Opportunity High School Diploma Fundable Outcome. An institution achieves an Opportunity High School Diploma Fundable Outcome when a student has completed the program and attained the credential, as defined in §13.663(33) of this subchapter. A student must earn the Opportunity High School Diploma on or after September 1, 2024, to qualify as a Fundable Outcome.

(h) Fundable Outcome Parameters. The Commissioner of Higher Education retains sole discretion for determining compliance with the requirements of this subsection. An institution shall only be funded for credentials reported in compliance with this section.

(1) For a credential conferred in fiscal year 2027 to be eligible for funding, an institution must have conferred the credential in and reported the credential for fiscal year 2027, and the recipient must have earned the credential no earlier than June 1, 2026.

(A) An associate degree that the institution conferred in and reported for fiscal year 2027 shall also be eligible for funding if the student earned the last semester credit hour of the associate degree through the successful completion of coursework at an institution other than the institution conferring and reporting the credential no earlier than May 1, 2026.

(B) A credential earned prior to September 1, 2026, but reported for fiscal year 2027 and satisfying all other requirements of this paragraph must be conferred no later than December 31, 2026, to be eligible for funding.

(2) The coordinating board shall fund the following credentials, provided they meet all other criteria of fundable credentials of value:

(A) An Occupational Skills Award, or an Institutional Credential Leading to Licensure or Certification;

(B) Level I Certificate or Continuing Education Certificate;

(C) Level II Certificate;

(D) an associate degree;

(E) an advanced technical certificate; and

(F) a baccalaureate degree.

(3) An institution may not receive funding for more than one credential of each type listed in paragraph (2)(A) - (F) of this subsection, where each subparagraph corresponds to a type, conferred to an individual student in a five-year reporting period, with the exception of paragraph (2)(B) of this subsection which allows funding for two credentials conferred to an individual student in a five-year reporting period.

(4) Subject to the limitations specified in this subsection, if an institution reports having conferred more than one credential of any single type listed in paragraph (2)(A) - (F) of this subsection to an individual student in a five-year reporting period with the exception of paragraph (2)(B) of this subsection which allows funding for two credentials conferred to an individual student in a five-year reporting period and conferred at least one such credential in a discipline designated as a high-demand field for that institution, as described in Subchapter T of this chapter (relating to Community College Finance Program: High-Demand Fields), the coordinating board shall fund a credential in the high-demand field.

§13.669. Performance Tier: Rates.

An institution receives the rate in Figure: 19 TAC §13.669 for each fundable outcome, weighted according to the applicable provisions of §13.666 and §13.667 of this subchapter (relating to Performance Tier: Fundable Outcomes and Performance Tier: Fundable Outcome Weights, respectively).

Figure: 19 TAC §13.669 (.pdf)

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 23, 2026.

TRD-202603127

Douglas Brock

General Counsel

Texas Higher Education Coordinating Board

Effective date: August 12, 2026

Proposal publication date: April 24, 2026

For further information, please call: (512) 427-6495

PART 2. TEXAS EDUCATION AGENCY

CHAPTER 97. PLANNING AND ACCOUNTABILITY

SUBCHAPTER EE. ACCREDITATION STATUS, STANDARDS, AND SANCTIONS