BILL REQ. #:  S-4516.1 

READ FIRST TIME 02/03/04.   

     AN ACT Relating to performance contracts with institutions of higher education; adding a new chapter to Title 28B RCW; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that the higher education system in Washington state has historically provided opportunities for advanced study for thousands of residents, produced high quality scholars and graduates, and facilitated world class research and innovation. But the new global economy demands even more from our colleges and universities in terms of highly trained and skilled workers and research to fuel future economic growth.
     (2) The legislature further finds that, since 1997, public institutions of higher education have developed and maintained a system of performance measures to monitor progress in improving graduation efficiency, faculty productivity, student achievement of degrees and certifications, and other topics. However, the current performance measurement system is too limited in scope and scale. Only a few measures reflect the unique role and mission of an institution. There is little dialog between state policymakers and institution leaders regarding the challenges facing our colleges and universities and the outcomes expected by the public and the state.
     (3) The legislature further finds that procedures for operating budgets, enrollment management, and strategic planning for higher education are not adequately coordinated. The state and institutions must jointly discuss and establish clear priorities and acknowledge potential trade-offs of funding decisions.
     (4) Therefore, the legislature intends to explore a new relationship between the state and public institutions of higher education that includes dialog and negotiation over goals, priorities, performance, and resources, and also includes explicit commitments made by each party aimed at achieving agreed-upon outcomes. The mechanism to implement this relationship is a performance contract, to be initiated on a pilot basis with selected institutions beginning in 2004.

NEW SECTION.  Sec. 2   As used in this chapter, a performance contract:
     (1) Is an agreement reached between the governor and the governing board of an institution of higher education or in the case of two-year colleges the state board for community and technical colleges as provided in section 3 of this act and approved by the legislature as provided in section 6 of this act;
     (2) Addresses statewide goals and priorities of the legislature;
     (3) Addresses resident undergraduate enrollment levels;
     (4) Contains goals and commitments from both the institution and the state;
     (5) Includes quantifiable performance measures and benchmarks; and
     (6) Reflects the unique role and mission of the institution within the state's higher education system.

NEW SECTION.  Sec. 3   (1) The governor's office with assistance from the higher education coordinating board shall enter into negotiations with the governing boards of one state research university and one state regional university, as defined in RCW 28B.10.016, to create a performance contract on a pilot basis with each institution.
     (2) The governor's office with assistance from the higher education coordinating board shall enter into negotiations with the state board for community and technical colleges to create performance contracts on a pilot basis with two state community and technical colleges, as defined in RCW 28B.10.016.
     (3) The term of a performance contract negotiated under this section is six years, beginning with the 2005-06 academic year and ending with the 2010-11 academic year.
     (4) Institutions of higher education shall be required to provide to the office of financial management, the legislature, the state board for community and technical colleges, and the higher education coordinating board the data necessary to implement, monitor, and evaluate performance contracts.

NEW SECTION.  Sec. 4   (1) Performance contracts shall contain:
     (a) Indicators that measure outcomes concerning cost, price, quality, and timeliness of student progress toward degrees and certifications;
     (b) Indicators that measure the efficiency and effectiveness of institutional processes; and
     (c) Strategies, actions, and results committed to by the institution in order to achieve statewide goals.
     (2) The governor and institutional negotiating teams shall identify indicators and levels of performance that are clearly linked to the role, mission, and strategic plan of the institution.

NEW SECTION.  Sec. 5   (1) Performance contracts shall include grants to the institution, under the terms of the contract, of flexibility or waivers from state controls or regulations.
     (2) The higher education coordinating board and institutional negotiating teams shall identify areas where statutory change is necessary to grant an institution flexibility or waivers of state regulations. The governor shall submit legislation necessary to implement a performance contract to the higher education committees of the senate and house of representatives for the 2005 legislative session.
     (3) A performance contract may be entered into by a partnership between community colleges and regional universities.
     (4) The following areas may not be included in a performance contract:
     (a) Flexibility or waivers of requirements in a collective bargaining agreement negotiated under chapter 41.56, 41.59, 41.76, or 41.80 RCW;
     (b) Flexibility or waivers of administrative rules or processes governed by chapter 41.56, 41.59, 41.76, or 41.80 RCW; and
     (c) The rules, processes, duties, rights, and responsibilities of the faculty as contained in the faculty codes of the four-year public institutions.

NEW SECTION.  Sec. 6   (1) The governor shall submit the completed performance contracts to the legislature by December 1, 2004. Following public hearings, the legislature shall have the opportunity, by concurrent resolution, to approve or reject each performance contract as a whole.
     (2) The chairs of the senate and the house higher education committees shall appoint a subcommittee to review the performance contracts prior to the 2005 session.
     (3) If the legislature rejects a submission, the performance contract shall be returned to the parties for renegotiation.
     (4) All cost items contained within a performance contract shall be subject to legislative appropriation.

NEW SECTION.  Sec. 7   (1) Beginning September 2005, the higher education coordinating board shall provide semi-annual progress reports to the higher education committees of the senate and house of representatives on implementation of the performance contracts and any short-term outcomes. The overall purpose of the progress reports is to focus attention on key measures of institution performance and gain an improved understanding of the causes of success or lack of success in making progress in achieving the goals in the contract.
     (2) The Washington state institute for public policy shall conduct an evaluation of the pilot performance contracts and make recommendations regarding change, continuation, or expansion of the contract process to include additional colleges and universities. The evaluation shall be submitted to the governor and higher education committees of the senate and house of representatives by January 15, 2008.

NEW SECTION.  Sec. 8   Sections 1 through 7 of this act constitute a new chapter in Title 28B RCW.

NEW SECTION.  Sec. 9   This act expires July 1, 2011.