June 9, 2023, Austin, TX — Governor Greg Abbott signed House Bill 8 (HB 8) into law today, codifying an innovative new model to fund community colleges in Texas. The new model moves to an outcomes-based approach and rewards colleges for awarding degrees, certificates, and other “credentials of value.”

“The State of Texas continues working to ensure our public community colleges remain competitive and able to fully support the needs of our growing, diverse workforce,” said Gov. Abbott. “House Bill 8 will be an important tool to help enhance the role of public junior colleges in workforce training and preparation for high-demand careers. I thank the Texas Legislature for sending this bill to my desk to reward community colleges based on positive student outcomes and allow students to enroll in dual credit courses at no additional cost. The future of Texas remains bright thanks to the educational opportunities provided by community colleges and the hardworking students who will help build the Texas of tomorrow.”

The legislation, sponsored and championed by Rep. Gary VanDeaver and Sen. Brandon Creighton, was the culmination of months of work by legislators, community college leaders, and the business community, and expands upon the year-long efforts of the Texas Commission on Community College Finance (TxCCCF).

“I’m incredibly grateful to our legislators and to Governor Abbott for their commitment to advancing higher education in our great state,” said Chairman of the Coordinating Board Dr. Fred Farias. “Texas’ economic competitiveness depends on an educated workforce and our community colleges serve a critical role in giving more Texans the opportunity to earn credentials of value.”

With the passage of HB 8, Texas will reform its community college finance system to align policy and funding incentives with the rapidly changing needs of the workforce. It also puts dual credit students in high schools on pathways toward meaningful credentials and expands opportunities for adult learners.

The passage of HB 8, and the allocation of $683 million in the state budget, positions Texas as a national leader in tying funding for community colleges to measurable student-focused outcomes. These include:

The number of credentials of value awarded, including badges, certificates, and degrees, that position graduates for well-paying jobs.
Credentials of value awarded in high-demand fields where employers are looking for skilled employees.
Successful student transfers from community colleges to four-year universities.
Completion of a sequence of dual credit courses, which are offered to high school students and can set them on early pathways to success.
“Texas community colleges are uniquely positioned to play a key role in helping more Texans earn the credentials required for high-demand, well-paying jobs,” said Commissioner of Higher Education Harrison Keller. “By signing HB 8 into law, policymakers have marked a commitment to fund community colleges in ways that align our state’s emerging workforce needs with strategic funding, resources, and postsecondary opportunities that lead to a credential of value.”

The legislation also transfers the Texas Adult Career Education (ACE) program from Austin Community College to the Texas Higher Education Coordinating Board (THECB) and creates the Financial Aid for Swift Transfer (FAST) scholarship program for low-income dual credit students.

“The passage of this historic bill is a direct result of the consistent and dedicated effort from our 50 community college districts, our education partners, business and industry, and, of course, our lawmakers who made this a top priority this legislative session,” said Texas Association of Community Colleges President and CEO Ray Martinez III. “Our Texas community colleges look forward to leading the nation in higher education innovation.”

HB 8 was based on recommendations laid out in the TxCCCF report, submitted to state leaders in advance of the 88th legislative session. The report offered three sets of recommendations for a new model in support of the goals in Building a Talent Strong Texas, the state’s strategic plan for higher education:

Reward community colleges for positive student outcomes.
Increase affordability and financial aid, including for low-income students.
Increase capacity at colleges to meet changing workforce needs.
“Texas’s community colleges enroll and serve almost half of all students pursuing postsecondary education in our state, so they are an important engine that is propelling our future workforce and economy,” said TxCCCF Chair Woody L. Hunt. “This innovative funding will help community colleges make strategic decisions about how they best prepare their students to successfully enter the workforce or successfully transfer to a four-year university after graduation and ensure that all students are set up for success. This will strengthen our state and workforce for generations to come.”