BILL REQ. #:  H-1958.1 

Read first time 02/25/2003.   Referred to Committee on Higher Education.

     AN ACT Relating to performance contracts between the state and institutions of higher education; amending RCW 28B.50.090; adding a new section to chapter 28B.80 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that ten years have passed since the state attempted to redefine the relationship with its institutions of higher education based on trust, evidence, and a new alignment of responsibilities, as articulated in chapter 363, Laws of 1993.
     (2) However, the legislature also finds that the intent to combine institutional flexibility and authority to make decisions at the local level with accountability for achieving statewide goals and objectives has never been fully achieved, in part because there has not been an operating mechanism through which to implement this relationship.
     (3) Therefore, the legislature intends to authorize performance contracts between the state and each public four-year institution of higher education, as well as a performance contract between the state and the community and technical college system. These performance contracts will constitute a negotiated agreement between the state and the governing boards of each institution and the community and technical college system where each party makes a multiyear commitment to operate under the terms of the agreement. It is through these performance contracts that the legislature intends to implement a new relationship between the state and its institutions of higher education, where the state's primary interest lies not in the management and operations of an institution, but in the institution's contribution to achieving agreed-upon statewide goals and objectives for higher education.

NEW SECTION.  Sec. 2   (1) A joint legislative oversight committee on higher education performance contracts is created. The oversight committee shall consist of the following members:
     (a) Three members from each caucus of the senate, appointed by the president of the senate, with at least two members of the higher education committee and at least two members of the ways and means committee of the senate. The president of the senate shall appoint one member to serve as cochair of the committee; and
     (b) Three members from each caucus of the house of representatives, appointed by the speaker of the house of representatives, with two members each of the higher education, capital budget, and appropriations committees of the house of representatives. The speaker of the house of representatives shall appoint one member to serve as cochair of the committee.
     (2) The oversight committee shall have the following responsibilities:
     (a) Preparing a concurrent resolution to be introduced during the 2004 legislative session that establishes clear and coherent statewide goals and objectives for the state's system of higher education and provides guidance for institutions, the governor, and the higher education coordinating board to negotiate performance contracts as provided under section 3 of this act;
     (b) Identifying and recommending any additional legislation necessary to implement this act; and
     (c) Monitoring the negotiation of performance contracts under section 3 of this act.

NEW SECTION.  Sec. 3   A new section is added to chapter 28B.80 RCW to read as follows:
     (1) After the effective date of a concurrent resolution containing the statewide goals and objectives necessary to implement this section, the state shall enter into negotiations with each four-year institution of higher education and the community and technical college system to create performance contracts under which the institutions and system shall operate for the duration of the contract.
     (a) For four-year institutions, the governing board of the institution shall negotiate the performance contract.
     (b) For the community and technical college system, the state board for community and technical colleges shall negotiate the performance contract. The state board shall then negotiate individual performance contracts with the governing board of each community and technical college as provided in RCW 28B.50.090.
     (c) For the state, a team representing the office of the governor, the office of financial management, and the higher education coordinating board shall negotiate the performance contracts.
     (d) The higher education coordinating board shall convene and manage the contract negotiations under this section.
     (2) Performance contracts negotiated under this section shall:
     (a) Be based on the legislatively approved statewide goals and objectives for the state's system of higher education;
     (b) Include measurable performance indicators and benchmarks for gauging progress toward achieving the goals and objectives; and
     (c) Reflect each institution's unique role and mission.
     (3) Performance contracts negotiated under this section shall address institutional performance in at least the following areas:
     (a) Student retention, graduation and completion rates, and graduation efficiency;
     (b) Reduction of low-output and duplicative programs;
     (c) Faculty productivity;
     (d) Facility use, particularly for off-peak days and hours;
     (e) Efficient fiscal and management practices; and
     (f) Other areas identified through the contract negotiation process.
     (4) Performance contracts negotiated under this section shall address the state's commitment to the institutions in at least the following areas:
     (a) Flexibility under or exemption from review or approval processes under the administrative authority of the state board for community and technical colleges or the higher education coordinating board;
     (b) Flexibility under or exemption from review or approval processes for operating and capital budgeting under the administrative authority of the office of financial management; and
     (c) Other waivers, exemptions, or commitments identified through the contract negotiation process that are permissible under statute.
     (5) The higher education coordinating board shall submit the completed performance contracts under this section to the legislature by January 15, 2005. Following public hearings, the legislature shall, by concurrent resolution, approve or reject each performance contract as a whole.
     (a) If the legislature rejects or fails to act on a submission, the performance contract shall be returned to the parties for renegotiation.
     (b) All cost items contained within a performance contract shall be subject to legislative appropriation.
     (6) No less than every four years after legislative approval of a performance contract under this section, the higher education coordinating board shall:
     (a) Recommend to the legislature any revisions necessary to the statewide goals and objectives for higher education that are implemented through performance contracts under this section, which may be adopted by the legislature through concurrent resolution; and
     (b) Reconvene the parties to determine whether performance contract terms should be modified. Performance contract modifications shall be submitted to the legislature for approval as provided under subsection (5) of this section.

Sec. 4   RCW 28B.50.090 and 1991 c 238 s 33 are each amended to read as follows:
     The college board shall have general supervision and control over the state system of community and technical colleges. In addition to the other powers and duties imposed upon the college board by this chapter, the college board shall be charged with the following powers, duties and responsibilities:
     (1) Review the budgets prepared by the boards of trustees, prepare a single budget for the support of the state system of community and technical colleges and adult education, and submit this budget to the governor as provided in RCW 43.88.090;
     (2) Establish guidelines for the disbursement of funds; and receive and disburse such funds for adult education and maintenance and operation and capital support of the college districts in conformance with the state and district budgets, and in conformance with chapter 43.88 RCW;
     (3) Ensure, through the full use of its authority:
     (a) That each college district shall offer thoroughly comprehensive educational, training and service programs to meet the needs of both the communities and students served by combining high standards of excellence in academic transfer courses; realistic and practical courses in occupational education, both graded and ungraded; and community services of an educational, cultural, and recreational nature; and adult education, including basic skills and general, family, and work force literacy programs and services. However, technical colleges, and college districts containing only technical colleges, shall maintain programs solely for occupational education, basic skills, and literacy purposes. For as long as a need exists, technical colleges may continue those programs, activities, and services they offered during the twelve-month period preceding May 17, 1991;
     (b) That each college district shall maintain an open-door policy, to the end that no student will be denied admission because of the location of the student's residence or because of the student's educational background or ability; that, insofar as is practical in the judgment of the college board, curriculum offerings will be provided to meet the educational and training needs of the community generally and the students thereof; and that all students, regardless of their differing courses of study, will be considered, known and recognized equally as members of the student body: PROVIDED, That the administrative officers of a community or technical college may deny admission to a prospective student or attendance to an enrolled student if, in their judgment, the student would not be competent to profit from the curriculum offerings of the college, or would, by his or her presence or conduct, create a disruptive atmosphere within the college not consistent with the purposes of the institution. This subsection (b) shall not apply to competency, conduct, or presence associated with a disability in a person twenty-one years of age or younger attending a technical college;
     (4) Prepare a comprehensive master plan for the development of community and technical college education and training in the state; and assist the office of financial management in the preparation of enrollment projections to support plans for providing adequate college facilities in all areas of the state;
     (5) Define and administer criteria and guidelines for the establishment of new community and technical colleges or campuses within the existing districts;
     (6) Establish criteria and procedures for modifying district boundary lines consistent with the purposes set forth in RCW 28B.50.020 as now or hereafter amended and in accordance therewith make such changes as it deems advisable;
     (7) Establish minimum standards to govern the operation of the community and technical colleges with respect to:
     (a) Qualifications and credentials of instructional and key administrative personnel, except as otherwise provided in the state plan for vocational education,
     (b) Internal budgeting, accounting, auditing, and financial procedures as necessary to supplement the general requirements prescribed pursuant to chapter 43.88 RCW,
     (c) The content of the curriculums and other educational and training programs, and the requirement for degrees and certificates awarded by the colleges,
     (d) Standard admission policies,
     (e) Eligibility of courses to receive state fund support;
     (8) Establish and administer criteria and procedures for all capital construction including the establishment, installation, and expansion of facilities within the various college districts;
     (9) Encourage innovation in the development of new educational and training programs and instructional methods; coordinate research efforts to this end; and disseminate the findings thereof;
     (10) Exercise any other powers, duties and responsibilities necessary to carry out the purposes of this chapter;
     (11) Authorize the various community and technical colleges to offer programs and courses in other districts when it determines that such action is consistent with the purposes set forth in RCW 28B.50.020 as now or hereafter amended;
     (12) Notwithstanding any other law or statute regarding the sale of state property, sell or exchange and convey any or all interest in any community and technical college real and personal property, except such property as is received by a college district in accordance with RCW 28B.50.140(8), when it determines that such property is surplus or that such a sale or exchange is in the best interests of the community and technical college system;
     (13) In order that the treasurer for the state board for community and technical colleges appointed in accordance with RCW 28B.50.085 may make vendor payments, the state treasurer will honor warrants drawn by the state board providing for an initial advance on July 1, 1982, of the current biennium and on July 1 of each succeeding biennium from the state general fund in an amount equal to twenty-four percent of the average monthly allotment for such budgeted biennium expenditures for the state board for community and technical colleges as certified by the office of financial management; and at the conclusion of such initial month and for each succeeding month of any biennium, the state treasurer will reimburse expenditures incurred and reported monthly by the state board treasurer in accordance with chapter 43.88 RCW: PROVIDED, That the reimbursement to the state board for actual expenditures incurred in the final month of each biennium shall be less the initial advance made in such biennium;
     (14) Notwithstanding the provisions of subsection (12) of this section, may receive such gifts, grants, conveyances, devises, and bequests of real or personal property from private sources as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the community and technical college programs and may sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof according to the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof;
     (15) The college board shall have the power of eminent domain;
     (16) Provide general supervision over the state's technical colleges. The president of each technical college shall report directly to the director of the state board for community and technical colleges, or the director's designee, until local control is assumed by a new or existing board of trustees as appropriate, except that a college president shall have authority over program decisions of his or her college until the establishment of a board of trustees for that college. The directors of the vocational-technical institutes on March 1, 1991, shall be designated as the presidents of the new technical colleges;
     (17) Negotiate a performance agreement with the governing board of each community and technical college that implements the performance contract between the state and the community and technical college system as provided under section 3 of this act.