[atlas:bill]

AN ACT Relating to higher education accountability; amending 1998 c 346 s 601 (uncodified); adding new sections to chapter 28B.80 RCW; creating new sections; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) The legislature finds that it is in the interest of Washington citizens and current and prospective higher education students for the state's institutions of higher education to have in place an incentive system of performance funding and accountability to encourage performance improvements in specified areas. The legislature also finds that annual performance progress reports will draw the attention of the public and the state's policymakers to important issues related to students' educational attainment and learning outcomes.

(2) The 1997 legislature established a performance incentive system when it placed funds in reserve status for each institution of higher education and made release of the funds contingent on specific performance achievements. This incentive system resulted in one million four hundred sixty-five thousand dollars of the ten million six hundred sixty-one thousand dollars held in reserve for the six four-year institutions of higher education not being approved for release. Under the provisions of chapter 43.79 RCW, these funds will be directed to the education savings account. While the intention of the 1997 legislature was a performance incentive system, the resultant loss of aggregate funding for higher education contradicts the legislature's goal of maintaining institutions of the highest quality. Therefore, the legislature intends to direct unreleased performance funds for fiscal year 1999 to the Washington higher education improvement fund established in section 7 of this act.

(3) For future biennia, it is the intent of the legislature to provide performance incentive funding rather than place funds in reserve. For the 1999-2001 biennium, the legislature intends to appropriate no less than ten million dollars to the Washington higher education improvement fund established in section 7 of this act. The purpose of the funding is to encourage public four-year institutions of higher education to develop new, innovative, and creative approaches to improvement in student learning outcomes. Further the incentive funding would be used to encourage continued progress by the four-year institutions of higher education in the following areas: Undergraduate retention, graduation efficiency, graduation rates, and areas unique to each institution of higher education. The incentive system would also initiate new measures for student learning and distance education.

NEW SECTION. Sec. 2. A new section is added to chapter 28B.80 RCW to read as follows:

Four-year institutions of higher education shall strive to make continuous improvement and meaningful and substantial progress on all performance measures, and shall report their progress to the higher education coordinating board and to the legislature each year. Performance measures shall address undergraduate retention, graduation efficiency, graduation rates, student learning, distance education, and measures unique to each institution.

NEW SECTION. Sec. 3. A new section is added to chapter 28B.80 RCW to read as follows:

The higher education coordinating board, in consultation with the four-year institutions of higher education, shall develop criteria for a competitive grant process. The higher education coordinating board shall use those criteria to evaluate institutions' proposals for making progress in undergraduate retention, graduation efficiency, graduation rates, and areas unique to each institution of higher education. Subject to available funds in the Washington higher education improvement fund created in section 7 of this act, the higher education coordinating board shall award grants to the institutions based on the strength of the institutions' proposals in meeting the established criteria.

NEW SECTION. Sec. 4. In collaboration with Washington's public four-year institutions of higher education, the higher education coordinating board shall establish distance education performance measures by June 30, 1999. Institutions of higher education shall use these measures to establish baseline information by September 1, 2000. The higher education coordinating board shall report to the legislature in January 2001 on the outcomes of this effort and recommended next steps.

NEW SECTION. Sec. 5. A new section is added to chapter 28B.80 RCW to read as follows:

Incentive funds may be used to reinforce institutional and state initiatives in the area of student learning outcomes, and to encourage new assessment projects, particularly in the areas of writing, quantitative skills, and technological literacy. By 2003, all four-year institutions of higher education should have student learning outcomes in place for every undergraduate academic program, aligning those outcomes where appropriate with the K-12 and community college systems. Beginning in December 1999, institutions of higher education should report annually to the higher education coordinating board on progress in establishing and assessing these outcomes.

Sec. 6. 1998 c 346 s 601 (uncodified) is amended to read as follows:

The appropriations in sections 603 through 609 of this act are subject to the following conditions and limitations:

(1) "Institutions" means the institutions of higher education receiving appropriations under sections 603 through 609 of this act.

(2)(a) The salary increases provided or referenced in this subsection shall be the allowable salary increases provided at institutions of higher education, excluding increases associated with normally occurring promotions and increases related to faculty and professional staff retention, and excluding increases associated with employees under the jurisdiction of chapter 41.56 RCW pursuant to the provisions of RCW 28B.16.015.

(b) Each institution of higher education shall provide to each classified staff employee as defined by the office of financial management a salary increase of 3.0 percent on July 1, 1997. Each institution of higher education shall provide to instructional and research faculty, exempt professional staff, academic administrators, academic librarians, counselors, teaching and research assistants as classified by the office of financial management, and all other nonclassified staff, including those employees under RCW 28B.16.015, an average salary increase of 3.0 percent on July 1, 1997. For employees under the jurisdiction of chapter 41.56 RCW pursuant to the provisions of RCW 28B.16.015, distribution of the salary increases will be in accordance with the applicable collective bargaining agreement. However, an increase shall not be provided to any classified employee whose salary is above the approved salary range maximum for the class to which the employee's position is allocated. To collect consistent data for use by the legislature, the office of financial management, and other state agencies for policy and planning purposes, institutions of higher education shall report personnel data to be used in the department of personnel's human resource data warehouse in compliance with uniform reporting procedures established by the department of personnel.

(c) Each institution of higher education receiving appropriations under sections 604 through 609 of this act may provide to instructional and research faculty, exempt professional staff, academic administrators, academic librarians, counselors, teaching and research assistants, as classified by the office of financial management, and all other nonclassified staff, but not including employees under RCW 28B.16.015, an additional average salary increase of 1.0 percent on July 1, 1997, and an average salary increase of 2.0 percent on July 1, 1998. Any salary increases authorized under this subsection (2)(c) shall not be included in an institution's salary base. It is the intent of the legislature that general fund‑-state support for an institution shall not increase during the current or any future biennium as a result of any salary increases authorized under this subsection (2)(c).

(d) Specific salary increases authorized in sections 603 through 609 of this act are in addition to any salary increase provided in this subsection.

(3)(a) Each institution receiving appropriations under sections 604 through 609 of this act shall submit plans for achieving measurable and specific improvements in academic years 1997-98 and 1998-99 to the higher education coordinating board. The plans, to be prepared at the direction of the board, shall be submitted by August 15, 1997 (for academic year 1997-98) and June 30, 1998 (for academic year 1998-99). The following measures and goals will be used for the 1997-99 biennium:

Goal

(i) Undergraduate graduation efficiency index:

For students beginning as freshmen 95

For transfer students 90

(ii) Undergraduate student retention, defined as the percentage of all undergraduate students who return for the next year at the same

institution, measured from fall to fall:

Research universities 95%

Comprehensive universities and college 90%

(iii) Graduation rates, defined as the percentage of an entering

freshmen class at each institution that graduates within five years:

Research universities 65%

Comprehensive universities and college 55%

(iv) A measure of faculty productivity, with goals and targets in accord with the legislative intent to achieve measurable and specific improvements, to be determined by the higher education coordinating board, in consultation with the institutions receiving appropriations under sections 604 through 609 of this act.

(v) An additional measure and goal to be selected by the higher education coordinating board for each institution, in consultation with each institution.

(b) Academic year 1995-96 shall be the baseline year against which performance in academic year 1997-98 shall be measured. Academic year 1997-98 shall be the baseline year against which performance in academic year 1998-99 shall be measured. The difference between each institution's baseline year and the state-wide performance goals shall be calculated and shall be the performance gap for each institution for each measure for each year. The higher education coordinating board shall set performance targets for closing the performance gap for each measure for each institution. Performance targets shall be set at levels that reflect meaningful and substantial progress towards the state-wide performance goals. Each institution shall report to the higher education coordinating board on its actual performance achievement for each measure for academic year 1997-98 by November 1, 1998.

(c) General fund‑-state appropriations made to institutions of higher education under sections 604 through 609, chapter 346, Laws of 1998, shall be reduced by any amounts placed in reserve for fiscal year 1999 that are not approved for allotment by December 31, 1998, under the provisions specified. An amount equal to the total of these reductions shall be appropriated to the Washington higher education improvement fund in section 7 of this act.

(4) The state board for community and technical colleges shall develop an implementation plan for measurable and specific improvements in productivity, efficiency, and student retention in academic years 1997-98 and 1998-99 consistent with the performance management system developed by the work force training and education coordinating board and for the following long-term performance goals:

Goal

(a) Hourly wages for vocational graduates $12/hour

(b) Academic students transferring to Washington

higher education institutions 67%

(d) Graduation efficiency index 95

(5) The state's public institutions of higher education increasingly are being called upon to become more efficient in conducting the business operations necessary to support the carrying out of their academic missions. The legislature recognizes that state laws and regulations may have the unintended effect of acting as barriers to efficient operation in some instances, and desires to encourage the institutions of higher education to think beyond the constraints of current law in identifying opportunities for improved efficiency. Accordingly, the legislature requests that the institutions of higher education, working together through the council of presidents' office and the state board for community and technical colleges, identify opportunities for changes in state law that would form the basis for a new efficiency compact with the state, for consideration no later than the 1999 legislative session.

(6) Pursuant to RCW 43.135.055, institutions of higher education receiving appropriations under sections 603 through 609 of this act are authorized to increase summer term tuition in excess of the fiscal growth factor during the 1997-99 fiscal biennium. Tuition levels increased pursuant to this subsection shall not exceed the per credit hour rate calculated from the academic year tuition levels established by the legislature in RCW 28B.15.067.

NEW SECTION. Sec. 7. A new section is added to chapter 28B.80 RCW to read as follows:

The Washington higher education improvement fund is established in the custody of the state treasurer. Moneys in the fund may be spent only for the purposes of sections 3 and 5 of this act. Disbursements from the fund shall be on the authorization of the higher education coordinating board. The fund is subject to the allotment procedure provided under chapter 43.88 RCW, but no appropriation is required for disbursements.

NEW SECTION. Sec. 8. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.