BILL REQ. #:  H-0604.4 

Read first time 02/02/11.   Referred to Committee on Higher Education.

     AN ACT Relating to the higher education opportunity act; amending RCW 28B.15.067, 28B.15.068, 28B.76.270, 28B.92.060, and 28B.95.150; adding a new section to chapter 28B.10 RCW; creating new sections; and repealing RCW 28B.10.920, 28B.10.921, and 28B.10.922.

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

NEW SECTION.  Sec. 1   The legislature finds that in the knowledge-based, globally interdependent economy of the twenty-first century, postsecondary education is the most indispensable form of currency. Public institutions of higher education are drivers of economic growth and job creation and incubators for innovation. However, at the same time, the legislature finds that Washington state is experiencing a profound structural shift in the funding of higher education. State support has declined dramatically over the past twenty years, thereby necessitating increases in tuition to supplant the support of higher education from general taxpayers. The problem faced by all stakeholders - students and their families, institutions, and policymakers - is insufficient visibility into the use of locally retained tuition dollars. There is little transparency regarding whether increasing tuition dollars gives students, their families, and Washington taxpayers a high-value return on investment.
     (2) It is the intent of the legislature to:
     (a) Ensure that tuition dollars are spent to improve student access, affordability, and the quality of education;
     (b) Establish a clear nexus between tuition dollars and improved productivity and greater accountability of public institutions of higher education; and
     (c) Create a modern and robust higher education financial system that funds outcomes and results rather than input and process.

Sec. 2   RCW 28B.15.067 and 2010 c 20 s 7 are each amended to read as follows:
     (1) Tuition fees shall be established under the provisions of this chapter.
     (2) ((Beginning with the 2003-04 academic year and ending with the 2012-13 academic year, reductions or increases in full-time tuition fees for resident undergraduates shall be as provided in the omnibus appropriations act)) Beginning in the 2011-12 academic year, reductions or increases in full-time tuition fees shall be as provided in the omnibus appropriations act for resident undergraduate students at community and technical colleges. If the state board for community and technical colleges does not raise tuition up to the limit provided in the omnibus appropriations act, the individual governing boards of each community and technical college may raise tuition at their institution up to the limit.
     (3)(a) Beginning with the ((2003-04)) 2011-12 academic year and ending with the ((2012-13)) 2015-16 academic year, the governing boards of the state universities, the regional universities, and The Evergreen State College((, and the state board for community and technical colleges)) may reduce or increase full-time tuition fees for all students ((other than resident undergraduates)), including summer school students and students in other self-supporting degree programs. Percentage increases in full-time tuition fees may exceed the fiscal growth factor. Reductions or increases may be made for all or portions of an institution's programs, campuses, courses, or students. This subsection (3)(a) applies to the state board for community and technical colleges for all nonresident students, summer school students, and students in other self-supporting programs.
     (b) Prior to reducing or increasing tuition for each academic year, the governing boards of the state universities, the regional universities, and The Evergreen State College shall consult with existing student associations or organizations with student undergraduate and graduate representatives regarding the impacts of potential tuition increases. Governing boards shall be required to provide data regarding the percentage of students receiving financial aid, the sources of aid, and the percentage of total costs of attendance paid for by aid.
     (c) Prior to reducing or increasing tuition for each academic year, each college in the state board for community and technical college system shall consult with existing student associations or organizations with undergraduate student representation regarding the impacts of potential tuition increases. Colleges shall provide data regarding the percentage of students receiving financial aid, the sources of aid, and the percentage of total costs of attendance paid for by aid.
     (4) ((Academic year tuition for full-time students at the state's institutions of higher education beginning with 2015-16, other than summer term, shall be as charged during the 2014-15 academic year unless different rates are adopted by the legislature.
     (5))) The tuition fees established under this chapter shall not apply to high school students enrolling in participating institutions of higher education under RCW 28A.600.300 through 28A.600.400.
     (((6))) (5) The tuition fees established under this chapter shall not apply to eligible students enrolling in a dropout reengagement program through an interlocal agreement between a school district and a community or technical college under RCW 28A.175.100 through 28A.175.110.
     (((7))) (6) The tuition fees established under this chapter shall not apply to eligible students enrolling in a community or technical college participating in the pilot program under RCW 28B.50.534 for the purpose of obtaining a high school diploma.
     (((8) For the academic years 2003-04 through 2008-09, the University of Washington shall use an amount equivalent to ten percent of all revenues received as a result of law school tuition increases beginning in academic year 2000-01 through academic year 2008-09 to assist needy low and middle-income resident law students.
     (9) For the academic years 2003-04 through 2008-09, institutions of higher education shall use an amount equivalent to ten percent of all revenues received as a result of graduate academic school tuition increases beginning in academic year 2003-04 through academic year 2008-09 to assist needy low and middle-income resident graduate academic students.
     (10) Any tuition increases above seven percent shall fund costs of instruction, library and student services, utilities and maintenance, other costs related to instruction as well as institutional financial aid. Through 2010-11, any funding reductions to instruction, library and student services, utilities and maintenance and other costs related to instruction shall be proportionally less than other program areas including administration.))
     (7) Beginning January 1, 2012, each four-year institution of higher education that raises tuition above seven percent must retain half of the additional revenue for the express purpose of supporting financial aid programs for middle class students with incomes up to one hundred twenty-five percent of the median family income and mitigating the effect of tuition increases for the middle class.

Sec. 3   RCW 28B.15.068 and 2009 c 540 s 1 are each amended to read as follows:
     (1) ((Beginning with the 2007-08 academic year and ending with the 2016-17 academic year, tuition fees charged to full-time resident undergraduate students, except in academic years 2009-10 and 2010-11, may increase no greater than seven percent over the previous academic year in any institution of higher education. Annual reductions or increases in full-time tuition fees for resident undergraduate students shall be as provided in the omnibus appropriations act, within the seven percent increase limit established in this section. For academic years 2009-10 and 2010-11 the omnibus appropriations act may provide tuition increases greater than seven percent.)) To the extent that state appropriations combined with tuition and fee revenues are insufficient to achieve the total per-student funding goals established in subsection (2) of this section, the legislature may revisit state appropriations, authorized enrollment levels, and changes in tuition fees for any given fiscal year.
     (2) The state shall adopt as its goal total per-student funding levels, from state appropriations plus tuition and fees, of at least the sixtieth percentile of total per-student funding at similar public institutions of higher education in the global challenge states. In defining comparable per-student funding levels, the office of financial management shall adjust for regional cost-of-living differences; for differences in program offerings and in the relative mix of lower division, upper division, and graduate students; and for accounting and reporting differences among the comparison institutions. The office of financial management shall develop a funding trajectory for each four-year institution of higher education and for the community and technical college system as a whole that when combined with tuition and fees revenue allows the state to achieve its funding goal for each four-year institution and the community and technical college system as a whole no later than fiscal year 2017. The state shall not reduce enrollment levels below fiscal year 2007 budgeted levels in order to improve or alter the per-student funding amount at any four-year institution of higher education or the community and technical college system as a whole. The state recognizes that each four-year institution of higher education and the community and technical college system as a whole have different funding requirements to achieve desired performance levels, and that increases to the total per-student funding amount may need to exceed the minimum funding goal.
     (3) By September 1st of each year beginning in 2008, the office of financial management shall report to the governor, the higher education coordinating board, and appropriate committees of the legislature with updated estimates of the total per-student funding level that represents the sixtieth percentile of funding for comparable institutions of higher education in the global challenge states, and the progress toward that goal that was made for each of the public institutions of higher education.
     (4) As used in this section, "global challenge states" are the top performing states on the new economy index published by the progressive policy institute as of July 22, 2007. The new economy index ranks states on indicators of their potential to compete in the new economy. At least once every five years, the office of financial management shall determine if changes to the list of global challenge states are appropriate. The office of financial management shall report its findings to the governor and the legislature.
     (5)(a) During the ((2009-10)) 2011-12 and the ((2010-11)) 2012-13 academic years, institutions of higher education shall include information on their billing statements notifying students of tax credits available through the American opportunity tax credit provided in the American recovery and reinvestment act of 2009, the lifetime learning credit and other relevant tax credits available to mitigate the costs of attending college. All institutions of higher education and the higher education coordinating board shall use all reasonable means of communication such as web sites, online catalogues, admission and registration forms, among other methods to communicate the tax credits available to students.
     (b) All four-year institutions of higher education and the state board for community and technical colleges shall report to the higher education coordinating board on the methods used to communicate tax credits to students by November 30, 2011, and October 30, 2012. The higher education coordinating board shall report to the legislature on the types of methods used to communicate tax credits available to students and recommendations on effectiveness by January 1, 2013.

Sec. 4   RCW 28B.76.270 and 2004 c 275 s 11 are each amended to read as follows:
     (1) The board shall establish an accountability monitoring and reporting system as part of a continuing effort to make meaningful and substantial progress towards the achievement of long-term performance goals in higher education.
     (2) To provide consistent, easily understood data among the public four-year institutions of higher education within Washington and in other states, the following data must be reported annually and at a minimum include data recommended by a national organization representing state chief executives. This data must include the following for the four-year institutions of higher education and the board may change the data requirements to be consistent with best practices across the country:
     (a) Bachelor's degrees awarded;
     (b) Graduation rates: The number and percentage of students who graduate within four years for bachelor's degrees and within the extended time, which is six years for bachelor's degrees;
     (c) Transfer rates: The annual number and percentage of students who transfer from a two-year to a four-year institution of higher education;
     (d) Time and credits to degree: The average length of time in years and average number of credits that graduating students took to earn a bachelor's degree;
     (e) Enrollment in remedial education: The number and percentage of entering first-time undergraduate students who place into and enroll in remedial mathematics, English, or both;
     (f) Success beyond remedial education: The number and percentage of entering first-time undergraduate students who complete entry college-level math and English courses within the first two consecutive academic years;
     (g) Credit accumulation: The number and percentage of first-time undergraduate students completing two quarters or one semester worth of credit during their first academic year;
     (h) Retention rates: The number and percentage of entering undergraduate students who enroll consecutively from fall-to-spring and fall-to-fall at an institution of higher education; and
     (i) Course completion: The percentage of credit hours completed out of those attempted during an academic year.
     (3) Four-year institutions of higher education must count all students when collecting data for these metrics, not only first-time, full-time freshmen.
     (4) Based on guidelines prepared by the board, each four-year institution under section 7 of this act, and the state board for community and technical colleges shall submit a biennial plan to achieve measurable and specific improvements each academic year on statewide and institution-specific performance measures. Plans shall be submitted to the board along with the biennial budget requests from the institutions and the state board for community and technical colleges. Performance measures established for the community and technical colleges shall reflect the role and mission of the colleges.
     (((3))) (5) The board shall approve biennial performance targets for each four-year institution and for the community and technical college system and shall review actual achievements annually. The state board for community and technical colleges shall set biennial performance targets for each college or district, where appropriate.
     (((4))) (6) The board shall submit a report on progress towards the statewide goals, with recommendations for the ensuing biennium, to the fiscal and higher education committees of the legislature along with the board's biennial budget recommendations.
     (((5))) (7) The board, in collaboration with the four-year institutions and the state board for community and technical colleges, shall periodically review and update the accountability monitoring and reporting system.
     (((6))) (8) The board shall develop measurable indicators and benchmarks for its own performance regarding cost, quantity, quality, and timeliness and including the performance of committees and advisory groups convened under this chapter to accomplish such tasks as improving transfer and articulation, improving articulation with the K-12 education system, measuring educational costs, or developing data protocols. The board shall submit its accountability plan to the legislature concurrently with the biennial report on institution progress.
     (9) In conjunction with the office of financial management, all four-year institutions of higher education must display the data described in subsection (2) of this section in a uniform dashboard format on the office of financial management's web site no later than December 1, 2011, and updated thereafter annually by December 1st. To the maximum extent possible, the information must be viewable by race and ethnicity, gender, state and county of origin, and age. The information may be tailored to meet the needs of various target audiences such as students, researchers, and the general public.

Sec. 5   RCW 28B.92.060 and 2009 c 215 s 4 are each amended to read as follows:
     In awarding need grants, the board shall proceed substantially as follows: PROVIDED, That nothing contained herein shall be construed to prevent the board, in the exercise of its sound discretion, from following another procedure when the best interest of the program so dictates:
     (1) The board shall annually select the financial aid award recipients from among Washington residents applying for student financial aid who have been ranked according to:
     (a) Financial need as determined by the amount of the family contribution; and
     (b) Other considerations, such as whether the student is a former foster youth, or is a placebound student who has completed an associate of arts or associate of science degree or its equivalent.
     (2) The financial need of the highest ranked students shall be met by grants depending upon the evaluation of financial need until the total allocation has been disbursed. Funds from grants which are declined, forfeited or otherwise unused shall be reawarded until disbursed, except that eligible former foster youth shall be assured receipt of a grant. The board shall develop award criteria and methods of disbursement based on level of need, and not solely rely on a first-come, first-served basis.
     (3) A student shall be eligible to receive a state need grant for up to five years, or the credit or clock hour equivalent of five years, or up to one hundred twenty-five percent of the published length of time of the student's program. A student may not start a new associate degree program as a state need grant recipient until at least five years have elapsed since earning an associate degree as a need grant recipient, except that a student may earn two associate degrees concurrently. Qualifications for renewal will include maintaining satisfactory academic progress toward completion of an eligible program as determined by the board. Should the recipient terminate his or her enrollment for any reason during the academic year, the unused portion of the grant shall be returned to the state educational grant fund by the institution according to the institution's own policy for issuing refunds, except as provided in RCW 28B.92.070.
     (4) In computing financial need, the board:
     (a) Shall determine a maximum student expense budget allowance, not to exceed an amount equal to the total maximum student expense budget at the public institutions plus the current average state appropriation per student for operating expense in the public institutions. Any child support payments received by students who are parents attending less than half-time shall not be used in computing financial need; and
     (b) May take into account the number of children in a family when determining family contribution.
     (5)(a) A student who is enrolled in three to six credit-bearing quarter credits, or the equivalent semester credits, may receive a grant for up to one academic year before beginning a program that leads to a degree or certificate.
     (b) An eligible student enrolled on a less-than-full-time basis shall receive a prorated portion of his or her state need grant for any academic period in which he or she is enrolled on a less-than-full-time basis, as long as funds are available.
     (c) An institution of higher education may award a state need grant to an eligible student enrolled in three to six credit-bearing quarter credits, or the semester equivalent, on a provisional basis if:
     (i) The student has not previously received a state need grant from that institution;
     (ii) The student completes the required free application for federal student aid;
     (iii) The institution has reviewed the student's financial condition, and the financial condition of the student's family if the student is a dependent student, and has determined that the student is likely eligible for a state need grant; and
     (iv) The student has signed a document attesting to the fact that the financial information provided on the free application for federal student aid and any additional financial information provided directly to the institution is accurate and complete, and that the student agrees to repay the institution for the grant amount if the student submitted false or incomplete information.
     (6) As used in this section, "former foster youth" means a person who is at least eighteen years of age, but not more than twenty-four years of age, who was a dependent of the department of social and health services at the time he or she attained the age of eighteen.

Sec. 6   RCW 28B.95.150 and 2001 c 184 s 2 are each amended to read as follows:
     (1) The committee may establish a college savings program. If such a program is established, the college savings program shall be established, in such form as may be determined by the committee, to be a qualified state tuition program as defined by the internal revenue service under section 529 of the internal revenue code, and shall be administered in a manner consistent with the Washington advanced college tuition payment program. The committee, in planning and devising the program, shall consult with the state investment board, the state treasurer, a qualified actuarial consulting firm with appropriate expertise to evaluate such plans, the legislative fiscal and higher education committees, and the institutions of higher education.
     (2) Up to two hundred thousand dollars of administrative fees collected from guaranteed education tuition program participants may be applied as a loan to fund the development of a college savings program. This loan must be repaid with interest before the conclusion of the biennium in which the committee draws funds for this purpose from the advanced college tuition payment program account.
     (3) If such a college savings program is established, the college savings program account is created in the custody of the state treasurer for the purpose of administering the college savings program. If created, the account shall be a discrete nontreasury account in the custody of the state treasurer. Interest earnings shall be retained in accordance with RCW 43.79A.040. Disbursements from the account, except for program administration, are exempt from appropriations and the allotment provisions of chapter 43.88 RCW. Money used for program administration is subject to the allotment provisions, but without appropriation.
     (4) The committee, after consultation with the state investment board, shall determine the investment policies for the college savings program. Program contributions may be invested by the state investment board or the committee may contract with an investment company licensed to conduct business in this state to do the investing. The committee shall keep or cause to be kept full and adequate accounts and records of the assets of each individual participant in the college savings program.
     (5) Neither the state nor any eligible educational institution may be considered or held to be an insurer of the funds or assets of the individual participant accounts in the college savings program created under this section nor may any such entity be held liable for any shortage of funds in the event that balances in the individual participant accounts are insufficient to meet the educational expenses of the institution chosen by the student for which the individual participant account was intended.
     (6) The committee shall adopt rules to implement this section. Such rules shall include but not be limited to administration, investment management, promotion, and marketing; compliance with internal revenue service standards; application procedures and fees; start-up costs; phasing in the savings program and withdrawals therefrom; deterrents to early withdrawals and provisions for hardship withdrawals; and reenrollment in the savings program after withdrawal.
     (7) The committee may, at its discretion, determine to cease operation of the college savings program if it determines the continuation is not in the best interest of the state. The committee shall adopt rules to implement this section addressing the orderly distribution of assets.
     (8) The committee shall review tuition levels in relation to savings to ensure the program remains viable for students and their families. The committee shall report back to the legislature by November 1, 2011, on recommendations for establishing a second phase of the guaranteed education tuition program.

NEW SECTION.  Sec. 7   A new section is added to chapter 28B.10 RCW to read as follows:
     Each four-year institution of higher education must develop specific action plans to reach the goals under RCW 28B.76.270 and goals to improve cost-effectiveness and efficiency. The individual institutions must develop their campus goals recognizing the role of their campus as part of the system of public higher education. The plan and the results must be reported biennially to the governor, the legislature, and the higher education coordinating board. Institutions must report on innovations used to reach the targets, which may include but not limited to:
     (1) The innovative use of technology in instruction, particularly for large introductory courses;
     (2) Increasing administrative efficiencies among the institutions and campuses;
     (3) Eliminating underused majors and courses;
     (4) Creating three-year bachelor degree programs;
     (5) Increasing tuition for students taking credits beyond those needed to earn a degree;
     (6) Recognizing prior learning experiences based on competency assessments; and
     (7) Recognizing transfer credits, particularly credits earned in academic programs at two-year and four-year institutions.

NEW SECTION.  Sec. 8   The following acts or parts of acts are each repealed:
     (1) RCW 28B.10.920 (Performance agreements--Generally) and 2008 c 160 s 2;
     (2) RCW 28B.10.921 (Performance agreements -- Contents) and 2008 c 160 s 3; and
     (3) RCW 28B.10.922 (Performance agreements -- State committee--Development of final proposals -- Implementation -- Updates) and 2008 c 160 s 4.

NEW SECTION.  Sec. 9   The office of financial management shall create a work group that includes representations from the higher education coordinating board, the council of presidents, and four-year institutions of higher education to identify statutory reporting and accountability requirements that are duplicative, overly burdensome, redundant, or ineffective, and develop recommendations for statutory changes. The office of financial management shall provide recommendations to the legislature by November 1, 2011.

NEW SECTION.  Sec. 10   This act may be known and cited as the higher education opportunity act.