Passed by the House May 25, 2011 Yeas 91   ________________________________________ Speaker of the House of Representatives Passed by the Senate May 25, 2011 Yeas 43   ________________________________________ President of the Senate | I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is ENGROSSED SUBSTITUTE HOUSE BILL 2088 as passed by the House of Representatives and the Senate on the dates hereon set forth. ________________________________________ Chief Clerk | |
Approved ________________________________________ Governor of the State of Washington | Secretary of State State of Washington |
State of Washington | 62nd Legislature | 2011 1st Special Session |
READ FIRST TIME 05/17/11.
AN ACT Relating to creating the opportunity scholarship board to assist middle-income students and invest in high employer demand programs; adding a new section to chapter 82.32 RCW; adding a new chapter to Title 28B RCW; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that, despite
increases in degree production, there remain acute shortages in high
employer demand programs of study, particularly in the science,
technology, engineering, and mathematics (STEM) and health care fields
of study. According to the workforce training and education
coordinating board, seventeen percent of Washington businesses had
difficulty finding job applicants in 2010. Eleven thousand employers
did not fill a vacancy because they lacked qualified job applicants.
Fifty-nine percent of projected job openings in Washington state from
now until 2017 will require some form of postsecondary education and
training.
It is the intent of the legislature to provide jobs and opportunity
by making Washington the place where the world's most productive
companies find the world's most talented people. The legislature
intends to accomplish this through the creation of the opportunity
scholarship and the opportunity expansion programs to help mitigate the
impact of tuition increases, increase the number of baccalaureate
degrees in high employer demand and other programs, and invest in
programs and students to meet market demands for a knowledge-based
economy while filling middle-income jobs with a sufficient supply of
skilled workers.
NEW SECTION. Sec. 2 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Board" means the higher education coordinating board or its
successor.
(2) "Eligible education programs" means high employer demand and
other programs of study as determined by the opportunity scholarship
board.
(3) "Eligible expenses" means reasonable expenses associated with
the costs of acquiring an education such as tuition, books, equipment,
fees, room and board, and other expenses as determined by the program
administrator in consultation with the board and the state board for
community and technical colleges.
(4) "Eligible student" means a resident student who received their
high school diploma or GED in Washington and who:
(a)(i) Has been accepted at a four-year institution of higher
education into an eligible education program leading to a baccalaureate
degree; or
(ii) Will attend a two-year institution of higher education and
intends to transfer to an eligible education program at a four-year
institution of higher education;
(b) Declares an intention to obtain a baccalaureate degree; and
(c) Has a family income at or below one hundred twenty-five percent
of the state median family income at the time the student applies for
an opportunity scholarship.
(5) "High employer demand program of study" has the same meaning as
provided in RCW 28B.50.030.
(6) "Participant" means an eligible student who has received a
scholarship under the opportunity scholarship program.
(7) "Program administrator" means a college scholarship
organization that is a private nonprofit corporation registered under
Title 24 RCW and qualified as a tax-exempt entity under section
501(c)(3) of the federal internal revenue code, with expertise in
managing scholarships and college advising.
(8) "Resident student" has the same meaning as provided in RCW
28B.15.012.
NEW SECTION. Sec. 3 (1) The opportunity scholarship board is
created. The opportunity scholarship board consists of seven members:
(a) Three members appointed by the governor. For two of the three
appointments, the governor shall consider names from a list provided by
the president of the senate and the speaker of the house of
representatives; and
(b) Four foundation or business and industry representatives
appointed by the governor from among the state's most productive
industries such as aerospace, manufacturing, health sciences,
information technology, and others. The foundation or business and
industry representatives shall be selected from among nominations
provided by the private sector donors to the opportunity scholarship
and opportunity expansion programs. However, the governor may request,
and the private sector donors shall provide, an additional list or
lists from which the governor shall select these representatives.
(2) Board members shall hold their offices for a term of four years
from the first day of September and until their successors are
appointed. No more than the terms of two members may expire
simultaneously on the last day of August in any one year.
(3) The members of the opportunity scholarship board shall elect
one of the business and industry representatives to serve as chair.
(4) Five members of the board constitute a quorum for the
transaction of business. In case of a vacancy, or when an appointment
is made after the date of expiration of the term, the governor or the
president of the senate or the speaker of the house of representatives,
depending upon which made the initial appointment to that position,
shall fill the vacancy for the remainder of the term of the board
member whose office has become vacant or expired.
(5) The opportunity scholarship board shall be staffed by the
program administrator.
(6) The purpose of the opportunity scholarship board is to provide
oversight and guidance for the opportunity expansion and the
opportunity scholarship programs in light of established legislative
priorities and to fulfill the duties and responsibilities under this
chapter, including but not limited to determining eligible education
programs for purposes of the opportunity scholarship program. Duties,
exercised jointly with the program administrator, include soliciting
funds and setting annual fund-raising goals.
(7) The opportunity scholarship board may report to the governor
and the appropriate committees of the legislature with recommendations
as to:
(a) Whether some or all of the scholarships should be changed to
conditional scholarships that must be repaid in the event the
participant does not complete the eligible education program; and
(b) A source or sources of funds for the opportunity expansion
program in addition to the voluntary contributions of the high
technology research and development tax credit under section 10 of this
act.
NEW SECTION. Sec. 4 (1) The program administrator, under
contract with the board, shall staff the opportunity scholarship board
and shall have the duties and responsibilities provided in this
chapter, including but not limited to publicizing the program,
selecting participants for the opportunity scholarship award,
distributing opportunity scholarship awards, and achieving the maximum
possible rate of return on investment of the accounts in subsection (2)
of this section, while ensuring transparency in the investment
decisions and processes. Duties, exercised jointly with the
opportunity scholarship board, include soliciting funds and setting
annual fund-raising goals. The program administrator shall be paid an
administrative fee as determined by the opportunity scholarship board.
(2) With respect to the opportunity scholarship program, the
program administrator shall:
(a) Establish and manage two separate accounts into which to
receive grants and contributions from private sources as well as state
matching funds, and from which to disburse scholarship funds to
participants;
(b) Solicit and accept grants and contributions from private
sources, via direct payment, pledge agreement, or escrow account, of
private sources for deposit into one or both of the two accounts
created in this subsection (2)(b) in accordance with this subsection
(2)(b):
(i) The "scholarship account," whose principal may be invaded, and
from which scholarships must be disbursed beginning no later than
December 1, 2011, if, by that date, state matching funds in the amount
of five million dollars or more have been received. Thereafter,
scholarships shall be disbursed on an annual basis beginning no later
than May 1, 2012, and every May 1st thereafter;
(ii) The "endowment account," from which scholarship moneys may be
disbursed from earnings only in years when:
(A) The state match has been made into both the scholarship and the
endowment account;
(B) The state appropriations for the state need grant under RCW
28B.92.010 meet or exceed state appropriations for the state need grant
made in the 2011-2013 biennium, adjusted for inflation, and eligibility
for state need grant recipients is at least seventy percent of state
median family income; and
(C) The state has demonstrated progress toward the goal of 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, as defined, measured, and reported in RCW 28B.15.068.
In any year in which the office of financial management reports that
the state has not made progress toward this goal, no new scholarships
may be awarded. In any year in which the office of financial
management reports that the percentile of total per-student funding is
less than the sixtieth percentile and at least five percent less than
the prior year, pledges of future grants and contributions may, at the
request of the donor, be released and grants and contributions already
received refunded to the extent that opportunity scholarship awards
already made can be fulfilled from the funds remaining in the endowment
account; and
(iii) An amount equal to at least fifty percent of all grants and
contributions must be deposited into the scholarship account until such
time as twenty million dollars have been deposited into the account,
after which time the private donors may designate whether their
contributions must be deposited to the scholarship or the endowment
account. The opportunity scholarship board and the program
administrator must work to maximize private sector contributions to
both the scholarship account and the endowment account, to maintain a
robust scholarship program while simultaneously building the endowment,
and to determine the division between the two accounts in the case of
undesignated grants and contributions, taking into account the need for
a long-term funding mechanism and the short-term needs of families and
students in Washington. The first five million dollars in state match,
as provided in section 5 of this act, shall be deposited into the
scholarship account and thereafter the state match shall be deposited
into the two accounts in equal proportion to the private funds
deposited in each account;
(c) Provide proof of receipt of grants and contributions from
private sources to the board, identifying the amounts received by name
of private source and date, and whether the amounts received were
deposited into the scholarship or the endowment account;
(d) In consultation with the higher education coordinating board
and the state board for community and technical colleges, make an
assessment of the reasonable annual eligible expenses associated with
eligible education programs identified by the opportunity scholarship
board;
(e) Determine the dollar difference between tuition fees charged by
institutions of higher education in the 2008-09 academic year and the
academic year for which an opportunity scholarship is being
distributed;
(f) Develop and implement an application, selection, and
notification process for awarding opportunity scholarships;
(g) Determine the annual amount of the opportunity scholarship for
each selected participant. The annual amount shall be at least one
thousand dollars or the amount determined under (e) of this subsection,
but may be increased on an income-based, sliding scale basis up to the
amount necessary to cover all reasonable annual eligible expenses as
assessed pursuant to (d) of this subsection, or to encourage
participation in baccalaureate degree programs identified by the
opportunity scholarship board;
(h) Distribute scholarship funds to selected participants. Once
awarded, and to the extent funds are available for distribution, an
opportunity scholarship shall be automatically renewed until the
participant withdraws from or is no longer attending the program,
completes the program, or has taken the credit or clock hour equivalent
of one hundred twenty-five percent of the published length of time of
the participant's program, whichever occurs first, and as long as the
participant annually submits documentation of filing both a free
application for federal student aid and for available federal education
tax credits, including but not limited to the American opportunity tax
credit; and
(i) Notify institutions of scholarship recipients who will attend
their institutions and inform them of the terms of the students'
eligibility.
(3) With respect to the opportunity expansion program, the program
administrator shall:
(a) Assist the opportunity scholarship board in developing and
implementing an application, selection, and notification process for
making opportunity expansion awards; and
(b) Solicit and accept grants and contributions from private
sources for opportunity expansion awards.
NEW SECTION. Sec. 5 (1) The opportunity scholarship program is
established.
(2) The purpose of this scholarship program is to provide
scholarships that will help low and middle-income Washington residents
earn baccalaureate degrees in high employer demand and other programs
of study and encourage them to remain in the state to work. The
program must be designed for both students starting at two-year
institutions of higher education and intending to transfer to four-year
institutions of higher education and students starting at four-year
institutions of higher education.
(3) The opportunity scholarship board shall determine which
programs of study, including but not limited to high employer demand
programs, are eligible for purposes of the opportunity scholarship.
(4) The source of funds for the program shall be a combination of
private grants and contributions and state matching funds. A state
match may be earned under this section for private contributions made
on or after the effective date of this section. A state match, up to
a maximum of fifty million dollars annually, shall be provided
beginning the later of January 1, 2014, or January 1st next following
the end of the fiscal year in which collections of state retail sales
and use tax, state business and occupation tax, and state public
utility tax exceed, by ten percent the amounts collected from these tax
resources in the fiscal year that ended June 30, 2008, as determined by
the department of revenue.
NEW SECTION. Sec. 6 (1) The opportunity scholarship match
transfer account is created in the custody of the state treasurer as a
nonappropriated account to be used solely and exclusively for the
opportunity scholarship program created in section 5 of this act. The
purpose of the account is to provide matching funds for the opportunity
scholarship program.
(2) Revenues to the account shall consist of appropriations by the
legislature into the account and any gifts, grants, or donations
received by the director of the board for this purpose.
(3) No expenditures from the account may be made except upon
receipt of proof, by the director of the board from the program
administrator, of private contributions to the opportunity scholarship
program. Expenditures, in the form of matching funds, may not exceed
the total amount of private contributions.
(4) Only the director of the board or the director's designee may
authorize expenditures from the opportunity scholarship match transfer
account. Such authorization must be made as soon as practicable
following receipt of proof as required under subsection (3) of this
section.
NEW SECTION. Sec. 7 (1) The opportunity expansion program is
established.
(2) The opportunity scholarship board shall select institutions of
higher education to receive opportunity expansion awards. In so doing,
the opportunity scholarship board must:
(a) Solicit, receive, and evaluate proposals from institutions of
higher education that are designed to directly increase the number of
baccalaureate degrees produced in high employer demand and other
programs of study, and that include annual numerical targets for the
number of such degrees, with a strong emphasis on serving students who
received their high school diploma or GED in Washington or are adult
Washington residents who are returning to school to gain a
baccalaureate degree;
(b) Develop criteria for evaluating proposals and awarding funds to
the proposals deemed most likely to increase the number of
baccalaureate degrees and degrees produced in high employer demand and
other programs of study;
(c) Give priority to proposals that include a partnership between
public and private partnership entities that leverage additional
private funds;
(d) Give priority to proposals that are innovative, efficient, and
cost-effective, given the nature and cost of the particular program of
study;
(e) Consult and operate in consultation with existing higher
education stakeholders, including but not limited to: Faculty, labor,
student organizations, and relevant higher education agencies; and
(f) Determine which proposals to improve and accelerate the
production of baccalaureate degrees in high employer demand and other
programs of study will receive opportunity expansion awards for the
following state fiscal year, notify the state treasurer, and announce
the awards.
(3) The state treasurer, at the direction of the opportunity
scholarship board, must distribute the funds that have been awarded to
the institutions of higher education from the opportunity expansion
account.
(4) Institutions of higher education receiving awards under this
section may not supplant existing general fund state revenues with
opportunity expansion awards.
(5) Annually, the office of financial management shall report to
the opportunity scholarship board, the governor, and the relevant
committees of the legislature regarding the percentage of Washington
households with incomes in the middle-income bracket or higher. For
purposes of this section, "middle-income bracket" means household
incomes between two hundred and five hundred percent of the 2010
federal poverty level, as determined by the United States department of
health and human services for a family of four, adjusted annually for
inflation.
(6) Annually, the higher education coordinating board must report
to the opportunity scholarship board, the governor, and the relevant
committees of the legislature regarding the increase in the number of
degrees in high employer demand and other programs of study awarded by
institutions of higher education over the average of the preceding ten
academic years.
(7) In its comprehensive plan, the workforce training and education
coordinating board shall include specific strategies to reach the goal
of increasing the percentage of Washington households living in the
middle-income bracket or higher, as calculated by the office of
financial management and developed by the agency or education
institution that will lead the strategy.
NEW SECTION. Sec. 8 (1) By December 1, 2012, and annually each
December 1st thereafter, the opportunity scholarship board, together
with the program administrator, shall report to the board, the
governor, and the appropriate committees of the legislature regarding
the opportunity scholarship and opportunity expansion programs,
including but not limited to:
(a) Which education programs the opportunity scholarship board
determined were eligible for purposes of the opportunity scholarship;
(b) The number of applicants for the opportunity scholarship,
disaggregated, to the extent possible, by race, ethnicity, gender,
county of origin, age, and median family income;
(c) The number of participants in the opportunity scholarship
program, disaggregated, to the extent possible, by race, ethnicity,
gender, county of origin, age, and median family income;
(d) The number and amount of the scholarships actually awarded, and
whether the scholarships were paid from the scholarship account or the
endowment account;
(e) The institutions and eligible education programs in which
opportunity scholarship participants enrolled, together with data
regarding participants' completion and graduation;
(f) The total amount of private contributions and state match
moneys received for the opportunity scholarship program, how the funds
were distributed between the scholarship and endowment accounts, the
interest or other earnings on the accounts, and the amount of any
administrative fee paid to the program administrator; and
(g) Identification of the programs the opportunity scholarship
board selected to receive opportunity expansion awards and the amount
of such awards.
(2) In the next succeeding legislative session following receipt of
a report required under subsection (1) of this section, the appropriate
committees of the legislature shall review the report and consider
whether any legislative action is necessary with respect to either the
opportunity scholarship program or the opportunity expansion program,
including but not limited to consideration of whether any legislative
action is necessary with respect to the nature and level of focus on
high employer demand fields and the number and amount of scholarships.
NEW SECTION. Sec. 9 (1) Beginning in 2018, the joint legislative
audit and review committee shall evaluate the opportunity scholarship
and opportunity expansion programs, and submit a report to the
appropriate committees of the legislature by December 1, 2018. The
committee's evaluation shall include, but not be limited to:
(a) The number and type of eligible education programs as
determined by the opportunity scholarship board;
(b) The number of participants in the opportunity scholarship
program in relation to the number of participants who completed a
baccalaureate degree;
(c) The total cumulative number of students who received
opportunity scholarships, and the total cumulative number of students
who gained a baccalaureate degree after receiving an opportunity
scholarship and the types of baccalaureate degrees awarded;
(d) The amount of private contributions to the opportunity
scholarship program, annually and in total;
(e) The amount of state match moneys to the opportunity scholarship
program, annually and in total;
(f) The amount of any administrative fees paid to the program
administrator, annually and in total;
(g) The source and amount of funding, annually and cumulatively,
for the opportunity expansion program;
(h) The number and type of proposals submitted by institutions for
opportunity expansion awards, the number and type of proposals that
received an award of opportunity expansion funds, and the amount of
such awards;
(i) The total cumulative number of additional high employer demand
degrees produced in Washington state due to the opportunity expansion
program, including both the initial opportunity expansion awards and
the subsequent inclusion in base funding; and
(j) Evidence that the existence of the opportunity scholarship and
opportunity expansion programs have contributed to the achievement of
the public policy objectives of helping to mitigate the impact of
tuition increases, increasing the number of baccalaureate degrees in
high employer demand and other programs, and investing in programs and
students to meet market demands for a knowledge-based economy while
filling middle-income jobs with a sufficient supply of skilled workers.
(2) In the event that the joint legislative audit and review
committee is charged with completing an evaluation of other aspects of
degree production, funding, or other aspects of higher education in
2018, and to the extent that it is economical and feasible to do so,
the committee shall combine the multiple evaluations and submit a
single report.
NEW SECTION. Sec. 10 A new section is added to chapter 82.32 RCW
to read as follows:
A person eligible for the high technology research and development
tax credit under RCW 82.04.4452 may contribute all or any portion of
the credit to the opportunity expansion account hereby created in the
state treasury. The department must create the forms and processes to
allow a person to make such an election easily and quickly by means of
checking a box. By May 1, 2012, and by May 1st of every year
thereafter, the department must report the amount so contributed and
certify the amount to the state treasurer. By July 1, 2012, and by
July 1st of every year thereafter, the state treasurer must transfer
the amount into the opportunity expansion account. Money in the
account may only be appropriated for the purposes specified in section
7 of this act.
NEW SECTION. Sec. 11 This chapter may be known and cited as the
opportunity scholarship act.
NEW SECTION. Sec. 12 Sections 1 through 9 and 11 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 13 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.