BILL REQ. #:  S-4483.1 

READ FIRST TIME 02/11/14.   

     AN ACT Relating to establishing an incentive-based methodology of distributing state appropriations to public four-year institutions of higher education; amending RCW 28B.15.101, 28B.15.102, and 28B.77.090; adding a new section to chapter 43.41 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that a robust public postsecondary educational system benefits Washingtonians throughout the state, and that the individual and combined success of the people of Washington, and in turn the vitality of business across the state, rely overwhelmingly on the quality and efficiency of the state's higher education system.
     (2) The legislature recognizes that there is currently an estimated gap of twenty-five thousand skilled workers in Washington, eighty percent of whom are in high-demand fields, and that this gap is projected to double by 2017. The legislature further recognizes that filling the job skills gap by 2017 could result in one hundred sixty thousand new jobs in the state. As a result, the legislature finds that the statewide goals of public institutions of higher education are to: (a) Increase total degree production; (b) increase degree production in high-demand fields of study; and (c) increase degree production for underrepresented student populations.
     (3) Therefore, it is the intent of the legislature to create an incentive funding structure that encourages student success through the postsecondary educational system. To do this, it is the intent of the legislature that an initial state funding enhancement equal to no less than twenty-five million dollars be available for distribution to the public four-year institutions of higher education for the purposes of incentive funding.
     (4) It is the intent of the legislature that this funding enhancement be an addition to the baseline budgets of public four-year institutions of higher education and that, in subsequent fiscal years, additional amounts allocated for this purpose will be distributed to the public four-year institutions of higher education and subsequently built into their carry-forward budgets based on their performance on institutional specific performance metrics that contribute to the three statewide goals.

Sec. 2   RCW 28B.15.101 and 2011 1st sp.s. c 10 s 5 are each amended to read as follows:
     (((1) To ensure institutional quality, promote access, and advance the public mission of the state universities, the regional universities, and The Evergreen State College, the authority to increase or decrease tuition rates shall be considered within the context of performance-based measures and goals for each state university, regional university, and The Evergreen State College. By September 1, 2011, and September 1st every two years thereafter, the state universities, the regional universities, and The Evergreen State College shall each negotiate an institutional performance plan with the office of financial management that includes expected outcomes that must be achieved by each institution in the subsequent biennium.
     (2) At a minimum, an individual institutional performance plan must include but is not limited to the following expected outcomes:
     (a) Time and credits to degree;
     (b) Retention and success of students from low-income, diverse, or underrepresented communities;
     (c) Baccalaureate degree production for resident students; and
     (d) Degree production in high-employer demand programs of study and critical state need areas.)) Subject to funds appropriated for this purpose in the omnibus appropriations act, incentive funding shall be distributed to the public four-year institutions of higher education as specified in the omnibus appropriations act and shall be based on an institution's performance in relation to its own past performance using a three-year average in the following metrics:
     (1) Number of degrees produced;
     (2) Number of high-demand degrees produced; and
     (3) Number of degrees awarded to underrepresented students.

Sec. 3   RCW 28B.15.102 and 2013 c 23 s 53 are each amended to read as follows:
     (1) Beginning with the 2011-12 academic year, any four-year institution of higher education that increases tuition beyond levels assumed in the omnibus appropriations act is subject to the financial aid requirements included in this section and shall remain subject to these requirements through the 2018-19 academic year.
     (2) Beginning July 1, 2011, each four-year institution of higher education that raises tuition beyond levels assumed in the omnibus appropriations act shall, in a manner consistent with the goal of enhancing the quality of and access to their institutions, provide financial aid to offset full-time tuition fees for resident undergraduate students as follows:
     (a) Subtract from the full-time tuition fees an amount that is equal to the maximum amount of a state need grant award that would be given to an eligible student with a family income at or below fifty percent of the state's median family income as determined by the student achievement council; and
     (b) Offset the remainder as follows:
     (i) Students with demonstrated need whose family incomes are at or below fifty percent of the state's median family income shall receive financial aid equal to one hundred percent of the remainder if an institution's full-time tuition fees for resident undergraduate students is five percent or greater of the state's median family income for a family of four as provided by the student achievement council;
     (ii) Students with demonstrated need whose family incomes are greater than fifty percent and no more than seventy percent of the state's median family income shall receive financial aid equal to seventy-five percent of the remainder if an institution's full-time tuition fees for resident undergraduate students is ten percent or greater of the state's median family income for a family of four as provided by the student achievement council;
     (iii) Students with demonstrated need whose family incomes exceed seventy percent and are less than one hundred percent of the state's median family income shall receive financial aid equal to fifty percent of the remainder if an institution's full-time tuition fees for resident undergraduate students is fifteen percent or greater of the state's median family income for a family of four as provided by the student achievement council; and
     (iv) Students with demonstrated need whose family incomes are at or exceed one hundred percent and are no more than one hundred twenty-five percent of the state's median family income shall receive financial aid equal to twenty-five percent of the remainder if an institution's full-time tuition fees for resident undergraduate students is twenty percent or greater of the state's median family income for a family of four as provided by the student achievement council.
     (3) The financial aid required in subsection (2) of this section shall:
     (a) Be reduced by the amount of other financial aid awards, not including the state need grant;
     (b) Be prorated based on credit load; and
     (c) Only be provided to students up to demonstrated need.
     (4) Financial aid sources and methods may be:
     (a) Tuition revenue or locally held funds;
     (b) Tuition waivers created by a four-year institution of higher education for the specific purpose of serving low and middle-income students; or
     (c) Local financial aid programs.
     (5) Use of tuition waivers as specified in subsection (4)(b) of this section shall not be included in determining total state tuition waiver authority as defined in RCW 28B.15.910.
     (6) By ((August 15, 2012, and August 15th)) December 31st every year ((thereafter)), four-year institutions of higher education that increase tuition beyond levels assumed in the omnibus appropriations act after January 1, 2011, shall report to the governor and relevant committees of the legislature on the effectiveness of the various sources and methods of financial aid in mitigating tuition increases. A key purpose of these reports is to provide information regarding the results of the decision to grant tuition-setting authority to the four-year institutions of higher education and whether tuition setting authority should continue to be granted to the institutions or revert back to the legislature after consideration of the impacts on students, including educational access, affordability, and ((quality)) completion. These reports shall include:
     (a) The amount of ((additional)) financial aid provided to middle-income and low-income resident students with demonstrated need in the aggregate and per student;
     (b) An itemization of the sources and methods of financial aid provided by the four-year institution of higher education in the aggregate and per student for resident undergraduate students;
     (c) An analysis of the combined impact of federal tuition tax credits and financial aid provided by the institution of higher education on the net cost to students and their families resulting from tuition increases;
     (d) In cases where tuition increases are greater than those assumed in the omnibus appropriations act at any four-year institution of higher education, the institution must include an explanation in its report of why this increase was necessary and how the institution will mitigate the effects of the increase. The institution must include in this section of its report a plan and specific timelines; and
     (e) An analysis of changes in resident student enrollment patterns, participation rates, graduation rates, and debt load, by race and ethnicity, gender, state and county of origin, age, and socioeconomic status, and a plan to mitigate effects of reduced diversity due to tuition increases. This analysis shall include disaggregated data for resident students in the following income brackets:
     (i) Up to seventy percent of the median family income;
     (ii) Between seventy-one percent and one hundred twenty-five percent of the median family income; and
     (iii) Above one hundred twenty-five percent of the median family income.
     (7) Beginning in the 2012-13 academic year, the University of Washington shall enroll during each academic year at least the same number of resident first-year undergraduate students at the Seattle campus, as defined in RCW 28B.15.012, as enrolled during the 2009-10 academic year. This requirement shall not apply to nonresident undergraduate and graduate and professional students.

Sec. 4   RCW 28B.77.090 and 2013 c 23 s 60 are each amended to read as follows:
     (((1) An accountability monitoring and reporting system is established 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 to the education data center annually by December 1st, and at a minimum include data recommended by a national organization representing state chief executives. The education data center in consultation with the council may change the data requirements to be consistent with best practices across the country. This data must, to the maximum extent possible, be disaggregated by race and ethnicity, gender, state and county of origin, age, and socioeconomic status, and include the following for the four-year institutions of higher education:
     (a) Bachelor's degrees awarded;
     (b) Graduate and professional degrees awarded;
     (c) 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;
     (d) Transfer rates: The annual number and percentage of students who transfer from a two-year to a four-year institution of higher education;
     (e) 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;
     (f) 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;
     (g) 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;
     (h) 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;
     (i) 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;
     (j) Course completion: The percentage of credit hours completed out of those attempted during an academic year;
     (k) Program participation and degree completion rates in bachelor and advanced degree programs in the sciences, which includes agriculture and natural resources, biology and biomedical sciences, computer and information sciences, engineering and engineering technologies, health professions and clinical sciences, mathematics and statistics, and physical sciences and science technologies, including participation and degree completion rates for students from traditionally underrepresented populations;
     (l) Annual enrollment: Annual unduplicated number of students enrolled over a twelve-month period at institutions of higher education including by student level;
     (m) Annual first-time enrollment: Total first-time students enrolled in a four-year institution of higher education;
     (n) Completion ratio: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in expected length, awarded per one hundred full-time equivalent undergraduate students at the state level;
     (o) Market penetration: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in program length, awarded relative to the state's population age eighteen to twenty-four years old with a high school diploma;
     (p) Student debt load: Median three-year distribution of debt load, excluding private loans or debts incurred before coming to the institution;
     (q) Data related to enrollment, completion rates, participation rates, and debt load shall be disaggregated for students in the following income brackets to the maximum extent possible:
     (i) Up to seventy percent of the median family income;
     (ii) Between seventy-one percent and one hundred twenty-five percent of the median family income; and
     (iii) Above one hundred twenty-five percent of the median family income; and
     (r) Yearly percentage increases in the average cost of undergraduate instruction.
     (3) Four-year institutions of higher education must count all students when collecting data, not only first-time, full-time first-year students.
     (4) 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, age, and socioeconomic status. The information may be tailored to meet the needs of various target audiences such as students, researchers, and the general public.
     (5))) The council shall use performance data from the education data center for the purposes of strategic planning, to report on progress toward achieving statewide goals, and to develop priorities proposed in the ten-year plan for higher education.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.41 RCW to read as follows:
     (1) 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 to the education data center annually by December 1st, and at a minimum include data recommended by a national organization representing state chief executives. The education data center, in consultation with the student achievement council, may change the data requirements to be consistent with best practices across the country. This data must, to the maximum extent possible, be disaggregated by race and ethnicity, gender, state and county of origin, age, and socioeconomic status, and include the following for the four-year institutions of higher education:
     (a) Bachelor's degrees awarded;
     (b) Graduate and professional degrees awarded;
     (c) 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;
     (d) Transfer rates: The annual number and percentage of students who transfer from a two-year to a four-year institution of higher education;
     (e) 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;
     (f) 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;
     (g) Success beyond remedial education: The number and percentage of entering first-time undergraduate students who complete entry college-level mathematics and English courses within the first two consecutive academic years;
     (h) 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;
     (i) 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;
     (j) Course completion: The percentage of credit hours completed out of those attempted during an academic year;
     (k) Program participation and degree completion rates in bachelor and advanced degree programs in the sciences, which includes agriculture and natural resources, biology and biomedical sciences, computer and information sciences, engineering and engineering technologies, health professions and clinical sciences, mathematics and statistics, and physical sciences and science technologies, including participation and degree completion rates for students from traditionally underrepresented populations;
     (l) Annual enrollment: Annual unduplicated number of students enrolled over a twelve-month period at institutions of higher education including by student level;
     (m) Annual first-time enrollment: Total first-time students enrolled in a four-year institution of higher education;
     (n) Completion ratio: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in expected length, awarded per one hundred full-time equivalent undergraduate students at the state level;
     (o) Market penetration: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in program length, awarded relative to the state's population age eighteen to twenty-four years old with a high school diploma;
     (p) Student debt load: Median three-year distribution of debt load, excluding private loans or debts incurred before coming to the institution;
     (q) Data related to enrollment, completion rates, participation rates, and debt load, disaggregated for students in the following income brackets to the maximum extent possible:
     (i) Up to seventy percent of the median family income;
     (ii) Between seventy-one percent and one hundred twenty-five percent of the median family income; and
     (iii) Above one hundred twenty-five percent of the median family income; and
     (r) Yearly percentage increases in the average cost of undergraduate instruction.
     (2) Four-year institutions of higher education must count all students when collecting data, not only first-time, full-time first-year students.
     (3) In conjunction with the office, 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'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, age, and socioeconomic status. The information may be tailored to meet the needs of various target audiences such as students, researchers, and the general public.