Amends TCA Title 4, Chapter 29 and Title 49.

Present law provides for the creation of a nonprofit corporation known as the Tennessee student assistance corporation, to administer student assistance programs authorized by law, which must be registered with the secretary of state and subject to the corporate laws of this state. This bill replaces this provision, providing, instead, that there is created a division within the Tennessee higher education commission, known as the Tennessee student assistance corporation, to administer student assistance programs authorized by law. BOARD OF DIRECTORS Present law provides for the establishment of a governing board of directors for the Tennessee student assistance corporation, consisting of the governor, the commissioner of education, the treasurer, the comptroller of the treasury, the commissioner of finance, and others. This bill provides, instead, that the governing board of directors for the Tennessee student assistance corporation is abolished as of July 1, 2024, and that the Tennessee student assistance corporation must be governed by the Tennessee higher education commission. DUTIES OF THE TENNESSEE HIGHER EDUCATION COMMISSION Present law establishes several duties for the commission, including the duty to (i) provide planning and policy leadership, including a distinct and visible role in setting the state's higher education policy agenda and serving as an agent of education transformation; (ii) develop and advance the education public policy agenda of the state to address the challenges facing higher education in Tennessee; and (iii) develop public consensus and awareness for the Tennessee higher education public policy agenda. This bill adds that it is a duty of the commission to integrate the Tennessee student assistance corporation into the commission's operations and thereafter oversee and manage the corporation. FINANCE AND CAPITAL PROJECTS Present law also provides that the commission must establish a formal process for identifying capital investment needs and determining priorities for these investments for consideration by the governor and the general assembly as part of the annual appropriations act. This bill replaces this provision, providing, instead, that the authority of the commission with regard to capital projects at institutions of higher education is limited to the following actions: (1) Reviewing information submitted to the commission and the department of finance and administration by institutions of higher education for each proposed capital outlay project to verify that an institution's information related to economic and workforce impact, student impact, and credential and research production is reasonably supported by facts and data. The commission must provide the results of the commission's review to the department of finance and administration and the general assembly within 20 business days of the commission's receipt of the information. The commission may develop and utilize a system to summarize the extent to which the information submitted by an institution is reasonably supported by facts and data, so long as the commission includes all metrics, rubrics, and summary results in the commission's submission to the department of finance and administration and the general assembly. The commission must not submit a list to the department of finance and administration or the general assembly ranking proposed capital projects at institutions of higher education for any fiscal year; and (2) Issuing guidelines for institutions of higher education to utilize in preparing the institution's master plan. The governing board of each institution is solely responsible for approving the master plan of an institution governed by the board. The commission may use the approved master plan of each institution in preparing the statewide master plan, but must not require approval of an institution's master plan by the commission. AUTHORITY OF COMMISSION TO CONDUCT STUDIES Present law provides, among other things, that the commission must study the need for particular programs, departments, academic divisions, branch operations, extension services, adult education activities, public service activities, and work programs of the various institutions of higher learning, with a particular view to their cost and relevance and to make recommendations to the respective governing boards for the purpose of minimizing duplication and overlapping of functions and services and to foster cooperative programs among the various institutions. This bill provides, instead, that each governing board of an institution of higher education must annually report any academic program terminations to the education committee of the senate and the education administration committee of the house of representatives. A copy of each annual report must be filed with the commission. Additionally, the authority of the commission to review, approve, or disapprove academic programs is limited to the following actions: (1) Conducting a review of proposed new colleges or schools for the purpose of minimizing duplication and overlapping functions and services. The commission shall not require an institution to submit any reorganization of the institution's existing academic units to the commission for its review or approval; and (2) For the purpose of minimizing duplication and overlapping functions and services, conducting a review of new associate degree offerings proposed by an institution that offers bachelor's degrees, and new bachelor's degree offerings proposed by an institution that offers associate degrees. This bill prohibits the commission from determining the degrees, courses, or course content that may be offered by an institution, or monitor the programs offered by an institution. Under this bill, only the governing board for the institution may determine the degrees, courses, or course content offered by the institution, or monitor the programs offered by the institution. ESTABLISHING A PHYSICAL PRESENCE, OFFERING COURSES OUTSIDE PRIMARY CAMPUS This bill provides that an institution that seeks to establish a physical presence or offer courses for academic credit at a location other than the institution's primary campus must first submit a proposal to do so to the commission for approval. Under this bill, the commission must review and approve or disapprove each proposal made by an institution. If the new location establishes or extends the institution's physical presence outside of this state, then the institution must, through the institution's governing board, file with the commission a notice of intent to initiate out-of-state instructional activity prior to the institution's development of the proposal. The commission must, no later than February 15 of each year, report to the chair of the education committee of the senate and to the chair of the education administration committee of the house of representatives of any such notices filed in the previous fiscal year and the status of the corresponding proposal. The commission must develop the policies and procedures necessary to effectuate the process outlined in this bill. This bill also applies to Tennessee colleges of applied technology. DUPLICATIVE OR OVERLAPPING STUDIES OR INITIATIVES This bill requires that prior to undertaking a study or initiative that requires the commitment of institutional resources, the commission must consult with any affected institutions to determine if the study or initiative is duplicative or overlaps with any studies, initiatives, efforts, or work being conducted at the institution and to confirm that the study or initiative justifies the use of institutional resources. The commission may make recommendations to institutions based on the results of any such study or initiative. COMPOSITION OF THE COMMISSION Present law provides for the composition of the commission, which requires, among other things, that the commission consist of 10 appointed voting members; that, except for ex officio members, membership is for a six-year term; and other rules. This bill replaces this, providing, instead, that the commission must be vacated as of July 1, 2024, and reconstituted to consist of 19 members, including 13 voting members and six nonvoting ex officio members. This bill provides that the 13 voting members of the commission must consist of the following: (1) Three members, one representing each grand division of this state, to be appointed by the speaker of the house of representatives; (2) Three members, one representing each grand division of this state, to be appointed by the speaker of the senate; (3) Three members, one representing each grand division of this state, to be appointed by the governor; (4) The comptroller of the treasury, or the comptroller's designee; (5) The secretary of state, or the secretary's designee; (6) The state treasurer, or the treasurer's designee; and (7) One student member, to be appointed by the governor. Further, this bill provides that the six nonvoting members of the commission must consist of the following: (1) The commissioner of economic and community development, or the commissioner's designee; (2) The commissioner of labor and workforce development, or the commissioner's designee; (3) The executive director of the state board of education, or the executive director's designee; (4) The president of the University of Tennessee system, or the president's designee; (5) The chancellor of the board of regents, or the chancellor's designee; and (6) A representative of one of the state universities from Austin Peay State University, East Tennessee State University, Middle Tennessee State University, Tennessee State University, Tennessee Technological University, and the University of Memphis. The representative serves a one-year term and must be appointed by the president of the respective state university. Additionally, this bill requires that the state university representative position on the commission rotates amongst each of the state universities in the order of East Tennessee State University, Tennessee Technological University, Middle Tennessee State University, Tennessee State University, Austin Peay State University, and The University of Memphis. APPOINTMENT AND ELECTION This bill requires the governor to appoint the student member from a list of three nominees selected and submitted by the commission no later than April 15 of the year of appointment. Under this bill, the student member serves a one-year term, beginning on July 1 of the year of appointment and ending the following June 30. The student member must be a resident of this state and remain enrolled in good standing at a public institution of higher education in this state for the duration of the student's term on the commission. However, a student member who graduates during the student's term on the commission may complete that term. This bill authorizes the chancellor of the board of regents and the president of the University of Tennessee system to each submit the names of no more than two qualified candidates, and the president of each state university may submit the name of one qualified candidate to the commission for consideration each year. The names of all qualified candidates must be submitted to the executive director no later than November 15. The chancellor and presidents are encouraged to facilitate the participation of campus student government associations in the candidate selection process. Moreover, a student who was appointed to serve as the student member of the commission prior to May 15, 2024, for a one-year term to begin on July 1, 2024, may serve the student member's term on the reconstituted commission. However, this bill must not be construed to terminate the student member's position. TERMS This bill requires that the terms of the initial members appointed pursuant to this bill be staggered. Following the expiration of the initial terms, the term for all members appointed to serve on the commission by the speaker of the house, speaker of the senate, and the governor is three years, beginning on July 1 and ending on June 30. The ex officio voting and nonvoting members of the commission remain members of the commission for so long as they hold their respective office. This bill provides that members appointed by the speaker of the house, speaker of the senate, and the governor may be reappointed, so long as a reappointed member has not previously served two full three-year terms on the commission. A member of the commission who served a term on the commission prior to July 1, 2024, is not eligible for reappointment if the member has served more than six years on the commission. VACANCIES This bill requires that vacancies occurring on the commission must be filled by appointment of the respective appointing authority. Members appointed to fill a vacancy, except for a vacancy created by the expiration of a term, serve only the remainder of the unexpired term. A member appointed by the speaker of the house, speaker of the senate, or the governor vacates the member's position on the commission if, at any time, the member ceases to reside in the grand division in which the member resided at the time of the member's appointment to the commission. This bill further provides that the commission must, in accordance with this bill, select a chair, first vice chair, second vice chair, and a secretary who each serve a one-year term in the respective position. The member who serves as secretary must serve as the second vice chair in the immediately succeeding year. The member who serves as the second vice chair must serve as first vice chair in the immediately succeeding year. The member who serves as first vice chair must serve as chair in the immediately succeeding year. The positions identified under this provision must continue to rotate in this succession. SELECTING MEMBERS FOR TERMS For the initial term beginning on July 1, 2024, and ending on June 30, 2025, this bill provides that the chair must be selected by and from the three members representing each grand division appointed by the speaker of the house; the first vice chair must be selected by and from the members appointed from the three members appointed from each grand division appointed by the speaker of the senate; the second vice chair must be selected by and from the three members representing each grand division appointed by the governor; and the secretary must be selected by and from the comptroller of the treasurer or the comptroller's designee, the secretary of state or the secretary of state's designee, and the state treasurer or the treasurer's designee. For all subsequent terms, this bill provides that the members who served as the first vice chair, second vice chair, and secretary in the immediately preceding year must serve as the chair, first vice chair, and second vice chair in accordance with the succession prescribed under this bill. The group of members responsible for selecting the secretary by and from the group's membership rotates in the following order: (1) The three members representing each grand division appointed by the speaker of the house; (2) The three members appointed from each grand division appointed by the speaker of the senate; (3) The three members representing each grand division in this state appointed by the governor; and (4) The comptroller of the treasurer or the comptroller's designee, the secretary of state or the secretary of state's designee, and the state treasurer or the treasurer's designee. This provision of this bill does not extend the term of a member appointed by the speaker of the house, the speaker of the senate, or the governor, beyond the initial term for which the member was appointed under this bill. If a member selected to serve as chair, first vice chair, second vice chair, or secretary, or if a selected member is unable to serve in the position for which the member is required to serve according to the succession prescribed in this bill due to the expiration of the member's term or due to the member vacating the member's position on the commission, then the group of members who initially selected the member for one or more of the positions must select a member by and from the group's membership to serve in the respective position. A member selected to serve in one or more of the positions is subject to the succession prescribed in this bill. This bill further provides that members of the commission may not receive compensation for their services, but must be reimbursed for travel expenses in accordance with the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general. ON MARCH 21, 2024, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2676, AS AMENDED. AMENDMENT #1 makes the following changes to the bill: (1) Establishes that the governing board of each state institution of higher education ("governing board") is solely responsible for setting the tuition rates and mandatory fees charged by each institution governed by the respective board; (2) Requires the governing board of each institution to submit the board's proposed tuition rates and mandatory fees for the upcoming academic year to the Tennessee higher education commission ("commission") (i) when public notice of a proposed tuition and mandatory fee increase is provided or (ii) if the board is not required to provide public notice of a proposed tuition and mandatory fee increase for the upcoming academic year, at least 15 days prior to the meeting of the respective board to adopt the proposed tuition rates and mandatory fees; (3) If a governing board is determined by the state funding board, in the immediately preceding fiscal year, to be a financially distressed institution, and upon the request of the state funding board, requires the governing board to appear before the state funding board to provide an explanation for the institution's financially distressed status; (4) Requires the state funding board to set the tuition rates and mandatory fees for a financially distressed state institution of higher education for the academic year immediately following the fiscal year in which the institution was determined to be a financially distressed institution, and for subsequent academic years until the institution is no longer a financially distressed institution. However, the requirement for public notice of proposed tuition and mandatory fee increase does not apply to the state funding board when setting the tuition rates and mandatory fees for a financially distressed institution; (5) Requires the state funding board to designate a score based on the composite financial index, or another objective measure of financial health at the discretion of the state funding board, for use in determining whether an institution is financially distressed. For purposes of this provision, an institution is "financially distressed" if the institution fails to meet the measure designated by the state funding board for two consecutive fiscal years, unless the state funding board determines that the established measure for one or both of the fiscal years is not representative of the institution's overall financial health due to capital expenditures or one-time expenses made by the institution. The state funding board must calculate the score based on audited financial statements or other methods as determined by the state funding board; and (6) Clarifies that any increase in the tuition rate upon which the dual enrollment grant award is established is subject to the binding range of allowable percentage adjustment for tuition as annually approved by the governing board of the respective state institution of higher education or by the state funding board, as applicable. ON MARCH 28, 2024, THE SENATE SUBSTITUTED HOUSE BILL 2676 FOR SENATE BILL 2713, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 2676, AS AMENDED. AMENDMENT #1 rewrites the bill to, instead, make the changes described below to the Tennessee student assistance corporation. TENNESSEE STUDENT ASSISTANCE CORPORATION Present law creates a nonprofit corporation known as the Tennessee student assistance corporation which administers student assistance programs authorized by law. The corporation must be registered with the secretary of state, and must be subject to the corporate laws of this state. This amendment revises the present law by, instead, requiring that the Tennessee student assistance corporation operate as a division within the Tennessee higher education commission ("commission"). BOARD OF DIRECTORS Present law provides that the Tennessee student assistance corporation is governed by a board of directors consisting of the governor, the commissioner of education, the state treasurer, the comptroller of the treasury, the commissioner of finance and administration, the president of the Tennessee Independent Colleges and Universities Association, the president of the Tennessee Proprietary Business School Association, the president of the University of Tennessee, the chancellor of the board of regents, the president of the Tennessee Association of Student Financial Aid Administrators, two students enrolled in an institution of higher education in Tennessee, and three private citizens involved in the field of education, but not employed by or professionally affiliated with any institution of higher education in the state. This amendment deletes the present law relating to the board of directors for the Tennessee Student Assistance Corporation and, instead