5598-S2

5598-S2.E AMH HE H2526.4

E2SSB 5598 - H COMM AMD

By Committee on Higher Education

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature intends to strengthen the link between postsecondary education and K-12 education by creating the Washington promise scholarship program for academically successful high school graduates. The legislature finds that, increasingly, an individual's economic viability is contingent on postsecondary educational opportunities, yet the state's full financial obligation is eliminated after the twelfth grade. Students who work hard in kindergarten through twelfth grade and successfully complete high school with high academic marks may not have the financial ability to attend college because they cannot obtain financial aid or the financial aid is insufficient.

NEW SECTION. Sec. 2. The higher education coordinating board shall design the Washington promise scholarship program based on the following parameters:

(1) Scholarships shall be awarded to students who graduate from high school or its equivalent and who meet both academic and financial eligibility criteria.

(a) The academic eligibility criteria shall be as follows: (i) Students graduating from public high schools in the years 1999, 2000, 2001, and 2002 must be in the top fifteen percent of their graduating class; (ii) beginning with the graduating class of 2003, students must pass all parts of the Washington assessment of student learning on their first attempt when they take it as tenth graders; (iii) beginning with the graduating class of 2001, the board shall outline criteria extending eligibility for scholarships to graduates of private high schools approved under chapter 28A.195 RCW and participants in home-based instruction as provided for in chapter 28A.200 RCW.

(b) To meet the financial eligibility criteria, a student's family income shall not exceed one hundred thirty-five percent of the state median family income adjusted for family size, except as otherwise determined in subsection (2) of this section.

(2) Promise scholarships are not intended to supplant any scholarship or tax program related to postsecondary education. If the board finds that promise scholarships supplant any federal scholarship or tax program, then the board shall adjust the financial eligibility criteria to the level necessary to avoid supplanting.

(3) The amount of promise scholarships shall be determined by the availability of funds, but should not exceed the equivalent of two years' worth of tuition at the resident, full-time, community college tuition rate. Awards for the second year of the scholarship shall be made only to students who successfully complete their first year of postsecondary education. In determining the amount of scholarships, the board shall give the highest priority to awarding scholarships to the maximum number of potential eligible recipients.

(4) By July 15th of each year, beginning in 1999, the board shall determine the amount of the scholarships, after taking into consideration the availability of funds.

(5) The form of the scholarships shall be as follows:

(a) For eligible students graduating from high school in the years 1999, 2000, 2001, and 2002, the scholarships shall be in the form of grants;

(b) Beginning with the graduating class of 2003, the scholarships shall be in the form of tuition units purchased through the advanced college tuition payment program under chapter 28B.95 RCW. In addition to the provisions in chapter 28B.95 RCW, tuition units granted to students by the higher education coordinating board for the Washington promise scholarship program are subject to the following additional restrictions: (i) The units may not be transferred to another individual or family member under RCW 28B.95.030; (ii) the units may not be used to pay tuition at an out-of-state institution of higher education under RCW 28B.95.050; and (iii) refunds for units shall not be provided to scholarship recipients under RCW 28B.95.090 or 28B.95.110.

(6) The scholarships may only be used at accredited institutions of higher education in the state of Washington.

(7) The scholarships must be used within ten years of being awarded.

(8) The scholarships may be used for college-related expenses, including but not limited to, tuition, room and board, books, and materials.

NEW SECTION. Sec. 3. (1) The higher education coordinating board, with the assistance of the institutions of higher education and the office of the superintendent of public instruction, shall evaluate the impact and the effectiveness of the Washington promise scholarship program. The evaluation shall include, but not be limited to: (a) An analysis of what other financial assistance promise scholarship recipients are receiving through other federal, state, and institutional programs, including grants, work study, tuition waivers, tax credits, and loan programs; (b) an analysis of whether the implementation of the promise scholarship has had an impact on student indebtedness; and (c) an evaluation of what types of students are successfully completing high school but do not have the financial ability to attend college because they cannot obtain financial aid or the financial aid is insufficient. By November 1, 2000, the board shall report its findings and make recommendations to the governor and the legislature.

(2) This section expires December 31, 2000.

NEW SECTION. Sec. 4. The scholarships will be awarded only in those academic years for which the higher education coordinating board verifies that the financial aid program in RCW 28B.10.800 through 28B.10.824 has been funded to reach the goal of providing financial aid to all eligible students up to sixty-five percent of median family income.

NEW SECTION. Sec. 5. The higher education coordinating board, with the assistance of the office of the superintendent of public instruction, shall implement and administer the Washington promise scholarship program described in section 2 of this act as follows:

(1) The first scholarships shall be awarded to eligible students enrolling in postsecondary education in academic year 1999-2000.

(2) The office of the superintendent of public instruction shall provide the information to the higher education coordinating board that is necessary for implementation of the program.

(a) For students graduating from high school in the years 1999, 2000, 2001, and 2002, the office of the superintendent of public instruction shall provide the higher education coordinating board with the names, addresses, and unique numeric identifiers for students in the top fifteen percent of each respective high school graduating class in Washington state. This shall be done by June 30th of each year.

(b) Beginning with the 2000-01 school year, the office of the superintendent of public instruction shall provide the names of tenth grade students who pass the Washington assessment of student learning on their first attempt to the higher education coordinating board to assist the higher education coordinating board in awarding scholarships. This shall be done by July 15th of each summer following the receipt of assessment scores to enable students to use the scholarship upon completion of twelfth grade.

(c) All student data should be considered confidential and used solely for the purposes of providing scholarships to eligible students.

(3) The higher education coordinating board may adopt rules to implement this chapter.

NEW SECTION. Sec. 6. (1) The Washington promise scholarship account is created in the custody of the state treasurer. The account shall be a discrete nontreasury account retaining its interest earnings in accordance with RCW 43.79A.040.

(2) The higher education coordinating board shall deposit in the account all money received for the program. The account shall be self-sustaining and consist of funds appropriated by the legislature for the Washington promise scholarship program, private contributions to the program, and receipts from refunds of tuition and fees.

(3) Expenditures from the account shall be used for scholarships to eligible students.

(4) With the exception of the operating costs associated with the management of the account by the treasurer's office as authorized in chapter 43.79A RCW, the account shall be credited with all investment income earned by the account.

(5) Disbursements from the account are exempt from appropriations and the allotment provisions of chapter 43.88 RCW.

(6) Disbursements from the account shall be made only on the authorization of the higher education coordinating board.

Sec. 7. RCW 43.79A.040 and 1998 c 268 s 1 are each amended to read as follows:

(1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

(2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

(3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

(b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the Washington international exchange scholarship endowment fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility grant account, the self-insurance revolving fund, the sulfur dioxide abatement account, and the children's trust fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

Sec. 8. RCW 28B.95.040 and 1997 c 289 s 4 are each amended to read as follows:

(1)(a) The governing body may, at its discretion, allow an organization to purchase tuition units for future use as scholarships. Such organizations electing to purchase tuition units for this purpose must enter into a contract with the governing body which, at a minimum, ensures that the scholarship shall be freely given by the purchaser to a scholarship recipient. For such purchases, the purchaser need not name a beneficiary until four months before the date when the tuition units are first expected to be used.

(b) The governing body shall formulate and adopt such rules as are necessary to determine which organizations may qualify to purchase tuition units for scholarships under this section. The governing body also may consider additional rules for the use of tuition units if purchased as scholarships.

(c) The governing body may establish a scholarship fund with moneys from the Washington advanced college tuition payment program account. A scholarship fund established under this authority shall be administered by the higher education coordinating board and shall be provided to students who demonstrate financial need. Financial need is not a criterion that any other organization need consider when using tuition units as scholarships. The board also may establish its own corporate-sponsored scholarship fund under this chapter.

(2) Tuition units purchased by the higher education coordinating board for the Washington promise scholarship program under chapter 28B.-- RCW (sections 1, 2, and 4 through 6 of this act) are subject to the following additional rules:

(a) The units may not be transferred to another individual or family member under RCW 28B.95.030;

(b) The units may not be used to pay tuition at an out-of-state institution of higher education under RCW 28B.95.050; and

NEW SECTION. Sec. 9. Sections 1, 2, and 4 through 6 of this act constitute a new chapter in Title 28B RCW.

NEW SECTION. Sec. 10. 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."

Correct the title.