S-4350

AN ACT Relating to the Washington state endowment for higher education; and adding a new chapter to Title 28B RCW.

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

NEW SECTION. Sec. 1. The intent of this chapter is to provide permanent quality improvements in Washington state's public higher education system. The legislature recognizes that the state's public higher education system can be strengthened by additional partnerships among individual donors, private corporations, and public institutions of higher education. The legislature further recognizes that partnerships among donors, the business community, and higher education can form the basis for direct accountability to achieve common goals. The legislature intends to create a matching fund program to assist public institutions of higher education in creating endowments financed jointly by public and private moneys.

The endowments are intended to recruit and retain the best faculty and students; to increase student scholarships, graduate fellowships, and distinguished professorships; to provide new ways to recognize quality teaching and public service; to fund quality initiatives for curriculum development and service delivery; to provide incentives for innovative approaches to faculty development; and to secure the most advanced equipment, library resources, and technological innovations for higher education in our state. The legislature further recognizes that the demands for increased access to the state's public higher education system may constrain the state's higher education budget for the foreseeable future. The legislature intends that the endowments created by this chapter shall be used solely for those purposes for which state funds may be unavailable or limited in the normal biennial budget process.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.

(1) "Comprehensive universities" means Central Washington University, Eastern Washington University, and Western Washington University.

(2) "Institution of higher education" means an institution of higher education as defined in RCW 28B.10.016.

(3) "Trust fund" means the Washington state endowment for higher education trust fund.

NEW SECTION. Sec. 3. (1) The Washington state endowment for higher education trust fund is established. Funds appropriated by the legislature for the trust fund shall be deposited in separate accounts in the state treasury for each four-year institution of higher education and the state board for community and technical colleges. The state treasurer shall administer the trust fund. Moneys in each of the accounts created in the trust fund are not subject to appropriation.

(2) State matching funds from the trust fund for quality improvements in public higher education may be used for one or more of the following purposes: Student scholarships, graduate fellowships, distinguished professorships, faculty teaching awards, innovative approaches to faculty development, quality initiatives for curriculum development and service delivery, equipment, and library resources.

(3) Washington state endowment for higher education disbursements are eligible to match qualifying private contributions to institutions of higher education designated under this chapter if one of the two following conditions are met:

(a) The funds were received by the institution of higher education or its foundation after April 1, 1998; or

(b) The funds were received or pledged for the distinguished professorship or graduate fellowship matching grant programs, and certified for state matching dollars by the higher education coordinating board and for which public matching dollars have not been received.

(4) Endowment funds shall not be used to supplant state appropriations.

NEW SECTION. Sec. 4. The higher education coordinating board shall certify that private matching funds have been obtained by a four-year institution of higher education or its foundation for the purposes of this chapter. For the community and technical colleges, the state board for community and technical colleges shall certify that a community or technical college has obtained private matching funds for the purposes of this chapter. Upon notice of certification, the treasurer shall release the state matching funds to the designated institution's local endowment fund or its foundation, or to the state board for community and technical colleges.

NEW SECTION. Sec. 5. (1) All institutions of higher education are eligible for matching funds from the trust fund. Any appropriation to the trust fund by the legislature shall be allocated in the following manner:

(a) Thirty-two percent for the state board for community and technical colleges;

(b) Thirty-two percent for the University of Washington;

(d) Fourteen percent for the comprehensive institutions and The Evergreen State College.

(2) The state board for community and technical colleges shall determine the allocation of funds for the two-year colleges.

(3) By written agreement, the comprehensive four-year universities and The Evergreen State College shall decide how the allocation of the percentage designated for the comprehensive institutions and The Evergreen State College shall be distributed among each of the institutions for any appropriation made by the legislature.

(4) No moneys may be released from the trust fund to an individual comprehensive institution or The Evergreen State College until a written agreement of the allocation distribution is filed with the state treasurer.

(5) Within the following higher education sectors, any unmatched funds shall be available to the other institution or institutions within that sector for match on a first-come basis if the following percentages are not met within the specified time periods:

(a) For the University of Washington and Washington State University, at least sixty percent of their allocation after three years from the effective date of the legislative appropriation, eighty percent after four years, and one hundred percent after five years.

(b) For the comprehensive institutions and The Evergreen State College, at least sixty percent of their allocation after four years from the effective date of the appropriation, eighty percent after five years, and one hundred percent after six years.

(c) For the state board for community and technical colleges at least sixty percent of their allocation after four years from the effective date of the appropriation, eighty percent after five years, and one hundred percent after six years.

(6) After six years, any remaining unmatched funds residing in any of the three sectors' pools shall revert to a common pool and shall be eligible for match on a first-come basis by any of the institutions.

NEW SECTION. Sec. 6. Each institution of higher education or its foundation is responsible for soliciting private donations, investing and maintaining all endowment funds, administering the uses of the funds, and reporting to the governor and the legislature. Each institution or its foundation may augment the endowment fund with additional private donations. The principal of the invested endowment fund shall not be invaded; only earnings or a portion thereof may be spent.

Each institution of higher education shall develop or designate an advisory committee, of which a majority of its members shall be private donors and business representatives. The advisory committee shall review and approve the institution's endowment for higher education program and develop specific, measurable goals for the institution's endowment program. Each institution shall report annually to the governor and the legislature on progress made toward its goals.

NEW SECTION. Sec. 7. This chapter may be known and cited as the Washington state endowment for higher education act.

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