SS#6 SCS SB 389 -- HIGHER EDUCATION

SPONSOR:  Nodler (Bearden)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Higher
Education by a vote of 7 to 1.

This substitute changes the laws regarding higher education and
the powers of the Missouri Higher Education Loan Authority
(MOHELA).

LEWIS AND CLARK DISCOVERY INITIATIVE

MOHELA is authorized to transfer assets, as specified in the
substitute, to the newly created Lewis and Clark Discovery Fund.
MOHELA must distribute $350 million of its assets in increments
to the fund no later than September 30, 2013, and moneys in the
fund may be appropriated only for capital projects at public
colleges and universities and for identifying opportunities for
commercializing technologies at public colleges and universities
by the Missouri Technology Corporation.  Any college or
university that knowingly employs a registered sex offender will
be ineligible for capital projects funds.

After an initial distribution of $230 million to the fund, the
Department of Economic Development will allocate a percentage,
within the limits specified in the substitute, of the state
ceiling for private activity bonds to MOHELA for at least the
next 15 years.  If the total distribution of assets is not
completed by September 30, 2013, the ceiling dollar amount
received by MOHELA will be reduced by the percentage of the $350
million not yet distributed.  MOHELA moneys cannot be used to pay
state debts.  Immunity from personal liability is granted for
members of MOHELA for certain decisions.  MOHELA is authorized to
issue bonds to fulfill its obligations regarding the transfer of
assets to the fund and may create or invest in financial aid
programs that provide student grants and scholarships.

SCHOLARSHIPS

The Coordinating Board for Higher Education will implement the
need-based Access Missouri scholarship to replace the current
Charles Gallagher Student Assistance Program and the Missouri
College Guarantee Program.  Applicants must be Missouri residents
who are U. S. citizens or permanent residents enrolled as
full-time students in an approved public or private institution.
In order to renew assistance, the applicant must have at least a
2.5 grade point average on a 4.0 scale.  The maximum and minimum
amount of the award will be $300 to $1,000 for public two-year
institutions; $1,000 to $2,150 for public four-year institutions;
and $2,000 to $4,600 for private institutions.  The award is
based on the expected family contribution rather than the cost of
attendance and will be adjusted every three years.  Students and
institutions must report any other assistance to the board.  A
recipient of financial assistance may transfer between approved
institutions without losing eligibility, and the board will
adjust the award accordingly.

The substitute establishes the Missouri Teaching Fellows Program
and specifies that certain qualified graduates of Missouri public
higher education institutions who are hired to teach in a less
than fully accredited school districts may enter a loan repayment
agreement with the Department of Higher Education.  Students
without educational loans may receive a stipend.  The $5,000
maximum loan repayment and the $1,000 stipend will be adjusted
annually.  The department will establish rules including, but not
limited to, applicant eligibility, selection criteria, and the
content of loan repayment contracts.  The department will create
and maintain a coordinator position to identify, recruit, and
select potential students for the program.

Bright Flight scholarships are increased from $2,000 to $3,000
beginning with Fiscal Year 2011.  Currently, only students with
standardized test scores in the top 3% qualify for the
scholarship.  Beginning with Fiscal Year 2011, students with
scores between the top 5% and 3% will qualify for a $1,000
scholarship.

Any award of assistance, excluding student loans and awards based
solely on academic performance, will be reduced to ensure that no
student's need-based aid will exceed the student's cost of
attendance.  An institution accepting financial assistance in
excess of the cost of attendance must refund the excess to the
board.

HIGHER EDUCATION STUDENT FUNDING

Beginning with the 2008-2009 academic year, each public
institution must submit its percentage increase in tuition for a
full-time resident undergraduate to the board by July 1.  For
institutions whose tuition is greater than the average tuition,
the percent change in tuition cannot exceed the percent change of
the federal Consumer Price Index over the past year or zero,
whichever is greater.  For institutions whose tuition is less
than the average tuition, the dollar increase in tuition cannot
exceed the product of zero or the percent of change in the index,
whichever is greater, times the average tuition.  Limits on
tuition increases do not apply to a community college unless the
college's tuition is greater than or equal to the average
tuition.  If the tuition increase exceeds the limit, it must
remit 5% of its current state appropriation to the board for
deposit into the General Revenue Fund, unless the institution
asks for a waiver within 30 days.  The Commissioner of Higher
Education will determine if the waiver is warranted or recommend
to the board that the waiver be denied.  The board will make the
final decision.

Two institutional performance measures negotiated by each
institution and three statewide performance measures developed by
the department must be established by July 1, 2008.  Public
higher education institutions must make pertinent course and
instructor information available on their web sites.

JOINT COMMITTEE ON EDUCATION

The Joint Committee on Education must meet at least twice a year
to monitor and analyze higher education, as well as establish the
performance measures required by the substitute and report its
findings to the General Assembly and the Governor.  The
Department of Economic Development is added to the list of state
agencies which are required to provide research assistance to the
committee.  Within three years, the committee will review the
impact of the newly created higher education funding provisions
and review a new model for the funding of higher education
institutions.

MISCELLANEOUS PROVISIONS

If a public higher education institution willfully disregards a
board policy, the commissioner may fine the institution up to 1%
of its current state appropriation.  The board will hold the
funds until the violation is corrected.  If the violation is not
corrected within a year, the fine amount will be deposited into
the General Revenue Fund.  The institution may appeal to the
board, which will make the final decision.  Every public higher
education institution must submit to binding dispute resolution
involving jurisdictional boundaries or the use of state
resources.  The arbitrator will be the commissioner or a
designee.  Any institution may appeal the decision to the board,
which has the authority to make a final decision.

Currently, the board issues certificates of approval to operate
to out-of-state public higher education institutions which meet
certain standards.  These institutions will be exempt from the
certificate of approval as of July 1, 2008.  The board must hold
out-of-state institutions to similar requirements of public
in-state institutions, and the board must establish rules for
this provision by July 1, 2008.

A public college or university cannot reject an applicant for a
faculty position based solely on the lack of a graduate degree if
the applicant has an undergraduate degree and has served at least
eight years in the General Assembly.

The curators of the University of Missouri may close certain
financial, legal, and tax records of a donor or potential donor.
In order to receive increases in state appropriations, two- and
four-year institutions must work with the commissioner to
establish agreed-upon competencies for certain entry-level
courses.  The board will establish policies to ensure the
transferability of the courses.

The board of regents of Northwest Missouri State University is
authorized to convey certain property owned in Nodaway County.

The provisions of the substitute regarding the Access Missouri
scholarship and the Missouri Teaching Fellows Program will expire
six years from the effective date.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $447,664
to $1,447,664 in FY 2008, $258,182 to $1,258,182 in FY 2009, and
$262,926 to $1,262,926 in FY 2010.  No impact on Other State
Funds in FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that the sale of some MOHELA
out-of-state loans to support capital projects will free up
general revenue to make a major expansion of need-based aid.
Basing the new combined aid program on the expected family
contribution provides equity across education sectors.

Testifying for the bill were Senator Nodler; Truman State
University; Dr. Barbara Dixon, Council on Public Higher
Education; University of Missouri System; Missouri Western State
University; Dr. Julio Leon, Missouri Southern State University;
Constance Bowman, Harris-Stowe State University; Dr. Ray Courter,
Northwest Missouri State University; Missouri State University;
Evelyn Jorgenson, Moberly Area Community College; Lincoln
University; Cari Wickliffe, Independent Colleges and Universities
of Missouri, Student Financial Aid Task Force; Donald Claycomb,
Linn State Technical College; and Missouri Chamber of Commerce
and Industry.

OPPONENTS:  Those who oppose the bill say that since the passage
of Amendment 2 on stem cell research, it is not possible to draft
a solid guarantee that higher education facilities will not be
used for stem cell research.  Limits on an institution's ability
to raise tuition are troubling.

Testifying against the bill were Missouri Right to Life; and
Missouri National Education Association.

OTHERS:  Others testifying on the bill say that the guarantee of
15 years' worth of bond ceiling allocation makes the asset sale
much more secure.  The cost of attendance includes tuition, fees,
books, and housing, some elements of which are derived from
Department of Higher Education formulas.

Testifying on the bill were Dr. Robert Stein, Commissioner of
Higher Education; and Quentin Wilson and Ray Bayery, Missouri
Higher Education Loan Authority.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:22 am