(1) For the 2015-16 state fiscal year and each fiscal year thereafter, the governing board of a state institution of higher education may annually negotiate a fee-for-service contract with the department 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.

(2) Each fee-for-service contract must include institutional role and mission funding as described in subsection (3) of this section and institutional performance funding as described in subsection (4) of this section. It is the intent of the general assembly that the components of the fee-for-service contracts developed by the commission be fairly balanced between role and mission factors and performance metrics.

(3) Role and mission funding. The institutional role and mission component of the fee-for-service contract is based on the following factors, as determined by the commission pursuant to section 23-18-306:

(a) Institutional mission. Role and mission funding must include an amount for each governing board to offset the costs incurred in providing undergraduate programs at each institution. In establishing the components of this factor, the commission shall include, at a minimum:

(I) The selectivity of the institution;

(II) The number of campuses of the institution;

(III) The rural or urban location of the institution;

(IV) Low student enrollment at an institution or a campus of an institution that affects the ability of the institution or campus to meet operational costs;

(V) Undergraduate or certificate programsthat have a high cost per student; and

(VI) Whether the institution conducts research.

(b) Support services for Pell-eligible, first-generation, and underserved undergraduate students. Role and mission funding must include an amount for each governing board to offset the costs incurred in providing additional support services to Pell-eligible undergraduate students enrolled in the institution. The amount of funding for support services for each Pell-eligible undergraduate student enrolled in the institution must be at least equal to ten percent of the amount of the college opportunity fund stipend, as set by the general assembly pursuant to section 23-18-202, for the applicable state fiscal year. The commission may include an amount for each governing board to offset the costs incurred in providing support services to first-generation undergraduate students enrolled in the institution after the commission establishes, in consultation with the institutions, a consistent definition and data collection method for identifying this student population. The commission may also include an amount for each governing board to offset the costs incurred in providing support services to undergraduate students who are identified as underserved after the commission establishes, in consultation with the institutions, a consistent definition and data collection method for identifying underserved students.

(c) Graduate programs. Role and mission funding must include an amount for each eligible governing board to offset the costs incurred in providing graduate programs at institutions that are authorized to provide graduate programs. In establishing the components of this factor, the commission shall include, at a minimum, an amount for each graduate student enrolled in an institution, which amount shall be based on the subject and level of the graduate program. In determining the amount of funding, the commission shall consider programs that have a high cost per student, including but not limited to programs in the fields of law, business, science, technology, engineering, and mathematics.

(d) Remediation. Role and mission funding must include an amount for each eligible governing board to offset the costs incurred in providing effective basic skills courses for students enrolled at an institution that is authorized to provide basic skills courses and the costs incurred in providing approved supplemental academic instruction pursuant to section 23-1-113 (1.5)(a)(II). In establishing the components of this factor, the commission shall determine how to measure successful remediation, which measure may include a student's successful completion of a first-level college course in the area of remediation, including English or math. The commission may also include components relating to the speed of a student's remediation and the cost of remediation to the student.

(e) Additional role and mission factors. The commission may establish up to two additional factors relating to role and mission funding. The factors must be distinguishable from each other and from the factors described in paragraphs (a) to (d) of this subsection (3). The additional factors the commission may consider include, but need not be limited to, institution affordability, cost studies, technology transfer, and provision of career and technical programs.

(4) Performance funding. The institutional performance funding component of the fee-for-service contract is based on the following metrics, as determined by the commission pursuant to section 23-18-306:

(a) Completion. Performance funding must include an amount for each governing board for each certificate or degree awarded by the institution, and, for the governing board of an institution with a community college role and mission, an amount for each community college student who transfers from a community college to another institution after completion of a certain number of credit hours. The commission shall establish the amount awarded for each type of credential based on the subject and level of the credential and, for transfers from community colleges, and the amount awarded and, in consultation with the institutions, the number of credit hours to be completed prior to transfer. The commission shall increase the value of each credential earned by or transfer completed by a Pell-eligible undergraduate student and may increase the value of each credential earned or transfer completed by a first-generation or underserved undergraduate student if the commission implements increased funding for these student populations pursuant to paragraph (b) of subsection (3) of this section.

(b) Retention. Performance funding must include an amount for each governing board based on the number of students enrolled in an institution who make academic progress by completing thirty credit hours, sixty credit hours, or ninety credit hours. In establishing the components of this metric, the commission may include a component related to an increase in the institution's retention rate. A community college that receives a completion incentive for a transferring student is not eligible for a retention bonus for that student in the same year.

(c) Additional performance metrics. The commission may establish up to four additional performance funding metrics that reflect and support the policy goals adopted by the commission in the master plan. The metrics must be distinguishable from each other and from the metrics described in paragraphs (a) and (b) of this subsection (4). The additional performance metrics the commission may consider include, but need not be limited to, workforce placement, closing the achievement gap, limiting student loan debt, and controlling institutional administrative costs.

(5) The board of trustees of the Colorado school of mines may study and recommend to the general assembly a different funding structure, including but not limited to a special purpose authority as defined in section 24-77-102 (15), C.R.S., that strengthens the institution and its specialized educational programs while ensuring academic quality and continued opportunities for resident students who meet the admissions criteria of the institution.

(6) Notwithstanding any provision of this section to the contrary, each fee-for-service contract negotiated pursuant to this section is subject to the provisions of section 23-18-305.

(7) It is the intent of the general assembly that a state institution of higher education that enters into a fee-for-service contract that includes basic skills courses shall not charge a student more per credit hour for a basic skills course than the student would pay per credit hour for a general education course.

(8) (a) Notwithstanding any provision of law to the contrary, an institution may use funding provided pursuant to this section as financial assistance for in-state students to reduce the student's share of in-state tuition, as defined in section 23-18-102.

(b) For an institution that uses funding received pursuant to this section to provide financial assistance for in-state students, "student's share of in-state tuition", for purposes of parts 1 and 2 of this article, has the same meaning as set forth in section 23-18-102, less the amount of any financial assistance awarded to the student pursuant to paragraph (a) of this subsection (8).