(a) The Board has developed the Supply/Demand Pathway (SDP) as a particular way to address anticipated large-scale enrollment demand in a specified region. The SDP shall be used as the model to address higher education needs in areas without ready geographic access to existing public higher education institutions. The general principles set forth in §5.76 of this title (relating to General Principals for Off-Campus Educational Units) are even more significant in regard to the larger scale efforts designated as SDP initiatives.
(b) An off-campus educational unit is on the "Pathway" when it is awarded that designation by the Board.
(c) The SDP consists of three categories:
  (1) Category A. Institutions temporarily test the market both in terms of demand and staying power by providing off-campus courses and/or programs by one or more institutions. Should demand decrease or not materialize, courses and programs can be discontinued and resources moved to areas of greater demand.
  (2) Category B. As demand increases, offerings may be organized through a multi-institution teaching center or as a university system center as a Pathway Education Center (PEC). A group of institutions may request that the Board authorize the establishment of a MITC. Alternatively, a university system may request that the Board authorize the establishment of a university system center. In either case, a lead institution shall be designated to provide leadership for the center and facilitate the provision of programs and resources from other institutions.
  (3) Category C. After an entity in Category B has attained a full-time equivalent upper-level and graduate enrollment of 3,500 for one fall semester, the parent institution(s) and Board(s) of Regents may request that the Board review the status of the center and recommend that the Legislature reclassify the unit as an upper-level general academic institution--a university. The 3,500 FTSE standard approximates the headcount enrollment included in the current university funding formula as the minimum size needed to achieve economies of scale.
(d) Counting. The following general criteria and standards will be used to determine enrollments applicable to the SDP thresholds.
  (1) Upper-division and graduate semester credit hours generated in academic courses delivered by the parent universities or by other institutions to on-site students at a PEC shall be counted towards the relevant SDP threshold.
  (2) Upper-division and graduate semester credit hours generated in academic courses delivered electronically to students on-site at a PEC shall be counted towards the SDP threshold. For interactive video courses that originate at a PEC, only students taking the course at the PEC shall be counted.
  (3) Upper-division and graduate semester credit hours generated in academic Internet-based courses and other courses offered in non-traditional formats that do not require the physical presence of the student at a PEC for a normal number of contact hours shall not be counted.
  (4) Lower-division semester credit hours generated in academic courses offered at PECs shall not be counted towards the thresholds except when:
    (A) the courses are required at the lower-division level for degree programs offered at the PEC,
    (B) the courses are not offered by community colleges in the vicinity of the Center,
    (C) the courses have been reviewed by Higher Education Regional Councils as described in Chapter 4.107(b) of this title, relating to Approval of Distance Education and Off-Campus Instruction for Public Colleges and Universities, and related Board procedures, and
    (D) the Board has granted permission to teach the courses at the PEC.
  (5) Enrollments in extension courses, continuing education and non-formula funded courses shall not be counted towards the thresholds.
  (6) Semester credit hours generated in courses that do not receive formula funding (e.g., military science, theology and religious vocations, some basic skills, personal awareness) shall not be counted toward the thresholds.

Source Note: The provisions of this §5.78 adopted to be effective May 28, 2003, 28 TexReg 4126; amended to be effective August 11, 2004, 29 TexReg 7671; amended to be effective August 26, 2009, 34 TexReg 5678; amended to be effective November 23, 2016, 41 TexReg 9110