HOUSE BILL REPORT
HB 1055
As Reported By House Committee On:
Higher Education
Appropriations
Title: An act relating to undergraduate fellowships for needy and meritorious students.
Brief Description: Creating undergraduate fellowships for needy and meritorious students.
Sponsors: Representatives Radcliff, Dunn, Carlson, Dickerson, Hatfield, Conway, Quall, Mason, Costa, Ogden, Anderson and O'Brien; by request of Higher Education Coordinating Board.
Brief History:
Committee Activity:
Higher Education: 2/6/97, 2/14/97 [DPS];
Appropriations: 3/7/97 [DP2S(w/o sub HE)].
HOUSE COMMITTEE ON HIGHER EDUCATION
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 8 members: Representatives Carlson, Chairman; Radcliff, Vice Chairman; Mason, Ranking Minority Member; Kenney, Assistant Ranking Minority Member; Butler; Dunn; O'Brien and Sheahan.
Staff: Suzi Morrissey (786-7120).
Background: Since 1985, the Legislature has created four programs designed both to match state funds with private donations and to attract and retain exemplary faculty and graduate students in Washington's public colleges and universities. Through the Warren G. Magnuson Institute for Biomedical Research and Health Professions Training, individuals engaged in research of diabetes, Parkinson's disease, osteoporosis, and other medical disorders receive funding and support. Funding for the institute is provided through a combination of methods, including the earnings on an endowment created when state funds were doubly matched by private donations or federal funds.
In the Community College Exceptional Faculty Awards Program, state funds and private donations are equally matched either to reward outstanding service by individual faculty members or to fund faculty development activities. Community college and technical college foundations are permitted to participate in this program.
Through the Distinguished Professorship and Graduate Student Fellowship programs, state funds are matched with private donations to create endowed positions at the public baccalaureate institutions. The 1996 Student Financial Aid Policy Advisory Committee to the Higher Education Coordinating Board recommended the creation of an endowed fellowship program for needy and meritorious undergraduate students attending public or independent colleges and universities. The committee suggested that the board develop and seek funding for a program modeled on the Distinguished Professorship and Graduate Student Fellowship programs.
Summary of Substitute Bill: The Washington Undergraduate Fellowship Trust Fund Program is created. Through the program, the Legislature intends to help public and independent institutions of higher education and private career schools and colleges fund fellowships for resident needy or meritorious undergraduate students. The fellowships will be funded from earnings on an endowment created by matching state money with an equal amount from private donors.
The program will be administered by the Higher Education Coordinating Board. The board=s program responsibilities are described. These include the adoption of the following: rules; an annual allocation system for monies in the trust fund; contracts with participating institutions and foundations; policies that maximize the distribution of state matching monies; a mechanism to reallocate unused funds; and an annual report on the program. The board will also request the release of state matching monies to qualifying institutions of higher education or foundations.
Public institutions of higher education or their foundations are eligible to participate in the program. Independent institutions and private career schools and colleges are not eligible to receive the state matching funds. However, the foundations of independent institutions of higher education or private career schools and colleges may participate.
Participating foundations must meet a number of conditions. These include: status as private, nonprofit corporations; tax exempt status under section 501(c)(3) of the federal tax code; existence solely for the benefit of one or more institutions of higher education; and registration with the attorney general under the Charitable Trust Act. In addition, foundations must enter a contract with the board. The contract, which must be approved by the attorney general, will describe the services the foundation will provide, ensure the protection of the state money in the endowment, guarantee that the foundation does not discriminate, and include other conditions specified by the board. Foundations of independent institutions and private career schools and colleges will also be required to ensure that state funds will not be used to assist students who are in pursuit of a theology degree or enrolled in a program that includes religious instruction.
The Undergraduate Fellowship Trust Fund is created. It will be administered by the state treasurer. State appropriations for the program will be deposited in the trust fund. At the request of the Higher Education Coordinating Board, money in the trust fund will be released to the local endowment funds created by participating institutions or foundations. The Higher Education Coordinating Board may request the release of state money when participating entities receive $25,000 in cash from private donors.
Once an institution of higher education or foundation receives the private donation and state matching monies, it will deposit both in an endowment fund. The institution or foundation is responsible for defining meritorious; selecting recipients; soliciting private donations, investing money in the endowment fund; administering the fellowship; and, upon request, reporting on the program to the Governor and the Legislature. The proceeds from the endowment may be used to pay the costs associated with the recipient=s education. The principle of the endowment cannot be spent. Monies associated with this program are not subject to collective bargaining.
The amount of $10 million is appropriated to the trust fund for the 1997-99 biennium.
Substitute Bill Compared to Original Bill: Community colleges, technical colleges, and the foundations of public and independent institutions of higher education and private career schools and colleges are all added to the list of entities eligible to participate in the program. The conditions under which foundations may participate are described. Needy students and meritorious students may receive grants. The duties of the board are clarified; definitions are included; donations must be in cash; and an appropriation is added. In addition, the 1999 report is deleted, as is language permitting the Governor to move the program to another agency.
Appropriation: The amount of $10 million to the trust fund.
Fiscal Note: Available.
Effective Date of Substitute Bill: Ninety days after adjournment of session in which bill is passed.
Testimony For: The creation of this endowment program will help working-class families send their children to college. It will help strengthen partnerships between higher education institutions and private citizens and will provide an enduring scholarship legacy to help needy and meritorious students attend college. In addition, the state will double its investment when its funds are matched by private donors.
Testimony Against: None.
Testified: Susan Patrick, Higher Education Coordinating Board (pro); Rhonda Coats, State Board for Community and Technical Colleges (pro); and Keith Boyd, Washington Student Lobby (pro).
HOUSE COMMITTEE ON APPROPRIATIONS
Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass and do not pass the substitute bill by Committee on Higher Education. Signed by 26 members: Representatives Huff, Chairman; Clements, Vice Chairman; H. Sommers, Vice Chairman; Doumit, Assistant Ranking Minority Member; Gombosky, Assistant Ranking Minority Member; Benson; Carlson; Chopp; Cody; Cooke; Crouse; Dyer; Grant; Keiser; Kenney; Kessler; Linville; Lisk; Mastin; McMorris; Parlette; Regala; D. Schmidt; Sehlin; Sheahan and Tokuda.
Staff: Mary Alice Grobins (786-7118).
Summary of Recommendation of Committee on Appropriations Compared to Recommendation of Committee on Higher Education: The substitute bill strikes the appropriation of $10 million and provides that the act is null and void unless specific funding is appropriated in the budget.
Appropriation: None.
Fiscal Note: Available.
Effective Date: Ninety days after adjournment of session in which bill is passed. However, the bill is null and void unless funded in the budget.
Testimony For: The trust program provides a way to match public and private funds to assist students on the basis of merit as well as need. In the past, the Legislature has set up similar programs for graduate students.
Testimony Against: None.
Testified: Representative Carlson, prime sponsor; and Susan Patrick, Higher Education Coordinating Board.