Colorado § 23-18-303.5 - Fee-for-service contracts - authorization - results-informed funding.

§ 23-18-303.5. Fee-for-service contracts - authorization - results-informed funding.

(1) (a) [Editor's note: For the applicability of this subsection (1)(a) beginning in state fiscal year 2027-28, see the editor's note following this section.] For the 2027-28 state fiscal year and each state fiscal year thereafter, the governing board of a state institution of higher education may annually negotiate a fee-for-service contract with the department pursuant to this section for the delivery of higher education services by the institution for the benefit of the state and its residents. Specialty education programs, area technical colleges, and local district colleges are funded pursuant to the provisions of section 23-18-304.

(b) Each governing board's annual fee-for-service contract includes the amount of funding appropriated to the governing board pursuant to this section, plus any amount appropriated to the governing board pursuant to sections 23-18-304 and 23-18-308, minus the amount of funding appropriated to the governing board for college opportunity fund stipends pursuant to section 23-18-202.

(1.3) Results-informed funding metrics. [Editor's note: For the applicability of this subsection (1.3) beginning in state fiscal year 2027-28, see the editor's note following this section.]

(a) The commission, in conjunction with the department and in collaboration with the governing boards, shall calculate results-informed funding for each governing board based on the rate of change over time in the performance of the institutions overseen by the governing board on the results-informed funding metrics specified in subsection (1.3)(b) of this section. The recommendation for results-informed funding may reflect a change in the total state appropriation, less the amount appropriated pursuant to subsection (3) of this section from the preceding state fiscal year.

(b) The results-informed funding metrics include:

(I) Resident student full-time equivalent enrollment;

(II) Credential completion;

(III) Resident Pell-recipient undergraduate student population share;

(IV) Resident underrepresented minority student population share;

(V) Retention rate;

(VI) One-hundred-percent-of-time graduation rate;

(VII) One-hundred-fifty-percent-of-time graduation rate; and

(VIII) Resident first-generation undergraduate student population share.

(c) (I) In preparing annual budget recommendations, the commission, in conjunction with the department and in collaboration with the governing boards, may annually identify the portion of total results-informed funding that is allocated to each results-informed funding metric specified in subsection (1.3)(b) of this section.

(II) The joint budget committee, after considering the commission's annual budget recommendations, shall determine the portion of total results-informed funding for the applicable state fiscal year that is allocated to each results-informed funding metric specified in subsection (1.3)(b) of this section. Each governing board's share of the funding allocated for each results-informed funding metric is determined using the calculation set forth in subsection (1.5) of this section.

(1.5) Results-informed funding - lever one. [Editor's note: For the applicability of this subsection (1.5) beginning in state fiscal year 2027-28, see the editor's note following this section.]

(a) The amount of results-informed funding that a governing board receives for each results-informed funding metric specified in subsection (1.3)(b) of this section is based on the rate of change over time in the performance of the institutions overseen by the governing board on the results-informed funding metric.

(b) The rate of change for each results-informed funding metric is calculated annually for a governing board by dividing the average of the four most recent years of actual data reported by the governing board for the results-informed funding metric by the average of the three oldest of the four years of actual data reported by the governing board for the results-informed funding metric.

(c) The rate of change for the results-informed funding metric is then multiplied by each governing board's previous share, resulting in the governing board's previous adjusted share for the results-informed funding metric. The total of the previous adjusted shares for all governing boards is the total previous adjusted share for the results-informed funding metric.

(d) Each governing board's allocation for the results-informed funding metric is determined by dividing the governing board's previous adjusted share for the results-informed funding metric by the total previous adjusted share for the results-informed funding metric, ensuring that the total amount of funding distributed through the results-informed funding metric does not exceed the amount of funding allocated for the results-informed funding metric.

(2) Ongoing performance funding - lever two. [Editor's note: For the applicability of this introductory portion to subsection (2) beginning in state fiscal year 2027-28, see the editor's note following this section.] The commission, in conjunction with the department and in collaboration with the governing boards, may recommend an additional amount of funding pursuant to this subsection (2) for an institution, which amount is ongoing performance funding for the receiving institution and is included in the calculation of funding pursuant to this part 3 in subsequent state fiscal years. The commission may recommend an additional amount of funding for the following purposes:

(a) [Editor's note: For the applicability of this subsection (2)(a) beginning in state fiscal year 2027-28, see the editor's note following this section.] To increase appropriations over the previous state fiscal year in order to make progress toward master plan goals, which may include addressing performance funding disparities, historic inequities, the unique role of area technical colleges, or funding priorities not addressed through the results-informed funding metrics. The commission shall focus its recommendations on broad institutional, systemwide, or state policy goals.

(b) (I) To recognize an institution's additional costs related to or associated with educating and providing services to resident first-generation undergraduate students.

(II) If the commission recommends additional funding for an institution or institutions pursuant to this subsection (2)(b), funding is calculated for an institution by dividing the institution's resident first-generation undergraduate student head count, based on the most recent census data collected by the department pursuant to section 23-18-302 (12)(b), by the institution's overall resident undergraduate student population head count from the fall census, and then multiplying the quotient by the institution's resident first-generation undergraduate student head count, resulting in the institution's "calibrated first-generation undergraduate student head count". An institution's percentage share of additional funding pursuant to this subsection (2)(b) is then determined by dividing the institution's calibrated first-generation undergraduate student head count by the sum of the calibrated first-generation undergraduate student head counts for all institutions that receive additional funding pursuant to this subsection (2)(b).

(3) One-time investments - lever three. [Editor's note: For the applicability of this subsection (3) beginning in state fiscal year 2027-28, see the editor's note following this section.] The commission, in conjunction with the department and in collaboration with the governing boards, may recommend an additional amount of temporary funding pursuant to this subsection (3) for an institution for purposes of making progress toward goals identified in the systemwide master planning process set forth in section 23-1-108 or other areas as identified by the commission. Additional funding received pursuant to this subsection (3) must be allocated for a specific period of time, is not ongoing base funding, and is not included in the calculation of funding pursuant to this part 3 in subsequent state fiscal years or in the calculation of the total state appropriation made pursuant to this part 3.

(4) and (5) Repealed.

(6) The amount of any change in funding appropriated to a governing board for the state fiscal year pursuant to subsection (2) or (3) of this section is not included in calculating the percentage change in the total state appropriation for the applicable state fiscal year for purposes of section 23-18-304.

(7) [Editor's note: For the applicability of this subsection (7) beginning in state fiscal year 2027-28, see the editor's note following this section.] When requesting or determining a change in results-informed funding pursuant to subsection (1.5) of this section and tuition spending authority for governing boards, the department and the joint budget committee shall consider, at a minimum, cost increases to base funding at all institutions, including those related to common policies annually submitted in the governor's November 1 budget request and adopted by the joint budget committee, and the commission's master plan goals.

(8) Repealed.

(9) Nothing in this part 3 precludes a governing board, local district college, or area technical college from making a funding request to the commission.

Source: L. 2020: Entire section added, (HB 20-1366), ch. 181, p. 827, § 4, effective June 29. L. 2026: (1)(a), IP(2), (2)(a), (3), and (7) amended, (1.3) and (1.5) added, and (4), (5), and (8) repealed, (HB 26-1345), ch. 391, p. 2454, § 2, effective August 1.

Editor's note: (1) Subsection (5)(b)(III) provided for the repeal of subsection (5)(b), effective July 1, 2025. (See L. 2020, p. 827.)

(2) Section 6 of chapter 391 (HB 26-1345), Session Laws of Colorado 2026, provides that the act changing this section applies to state institution of higher education budgets beginning in state fiscal year 2027-28.