S-0321.1          _______________________________________________

                                 SENATE BILL 5054

                  _______________________________________________

State of Washington              56th Legislature             1999 Regular Session

By Senator Jacobsen

Read first time 01/11/1999.  Referred to Committee on Higher Education.

Creating the office of student assistance.

     AN ACT Relating to the office of student assistance; amending RCW 28B.04.020, 28B.04.030, 28B.04.040, 28B.04.060, 28B.04.080, 28B.04.085, 28B.04.110, 28B.10.215, 28B.10.220, 28B.10.792, 28B.10.802, 28B.10.804, 28B.10.806, 28B.10.808, 28B.10.810, 28B.10.818, 28B.10.820, 28B.10.821, 28B.10.822, 28B.12.030, 28B.12.040, 28B.12.050, 28B.12.060, 28B.12.070, 28B.15.760, 28B.15.762, 28B.15.764, 28B.80.240, 28B.80.245, 28B.80.360, 28B.101.030, 28B.102.020, 28B.102.030, 28B.102.040, 28B.102.045, 28B.102.050, 28B.102.060, 28B.102.070, 28B.103.010, 28B.108.010, 28B.108.020, 28B.108.030, 28B.108.040, 28B.108.050, 28B.108.060, 28B.108.070, 28B.109.010, 28B.109.020, 28B.109.030, 28B.109.040, 28B.109.050, 28B.109.060, 28B.109.070, 28B.109.080, 28B.115.020, 28B.115.030, 28B.115.050, 28B.115.070, 28B.115.080, 28B.115.090, 28B.115.100, 28B.115.120, 28B.115.130, 28B.115.140, 28A.600.120, 28A.600.130, 28A.600.140, and 28A.600.150; reenacting and amending RCW 28B.115.110; adding a new section to chapter 41.06 RCW; adding a new chapter to Title 28B RCW; creating a new section; and recodifying RCW 28B.80.240, 28B.80.245, 28B.80.246, and 28B.80.360.

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

NEW SECTION. Sec. 1.  (1) It is the purpose of this chapter to establish the office of student assistance.

     (2) The office shall administer the state's responsibilities for federal student financial aid programs.

     (3) The office, in consultation with students, the higher education coordinating board, the work force training and education coordinating board, the state board for community and technical colleges, the council of presidents, public and private institutions of higher education, and career schools and colleges has the following duties:

     (a) To work collaboratively with organizations representing the public, students, institutions of higher education, faculty, and community scholarship groups and corporations;

     (b) To provide objective and timely information to the governor, legislature, public, institutions of higher education, and higher education organizations;

     (c) To be an advocate for the needs of financially needy students to the public, the governor, the legislature, and congress;

     (d) To ensure that public funds are effectively managed and that the maximum amount possible of those funds are provided directly to needy students;

     (e) To the extent feasible, streamline distribution and accountability processes to reduce the need for administrative staff at the state and institutions of higher education;

     (f) To the extent feasible, ensure that programs follow the principle that funding follows resident students to their choice of accredited in-state career schools and colleges; and

     (g) To raise donations and matching grants from people and organizations that wish to donate to state-wide financial aid programs.

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

     (1) "Director" means the director of the office.

     (2) "Office" means the office of student assistance.

NEW SECTION. Sec. 3.  The office of student assistance is created.  The office is vested with all powers and duties transferred to it under this chapter and such other powers and duties as may be authorized by law.

NEW SECTION. Sec. 4.  The executive head and appointing authority of the office is the director.  The director shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor.  The director shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040.  If a vacancy occurs in the position while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate.

NEW SECTION. Sec. 5.  It is the intent of the legislature wherever possible to place the internal affairs of the office under the control of the director in order that the director may institute therein the flexible, alert, and intelligent management of its business that changing contemporary circumstances require.  Therefore, whenever the director's authority is not specifically limited by law, the director has complete charge and supervisory powers over the office.  The director may create such administrative structures as the director considers appropriate, except as otherwise specified by law.  The director may employ such assistants and personnel as  necessary for the general administration of the office.  This employment shall be in accordance with the state civil service law, chapter 41.06 RCW, except as otherwise provided.

NEW SECTION. Sec. 6.  The director shall appoint a deputy director, an office personnel director, and such assistant directors as may be needed to administer the office.  The deputy director shall have charge and general supervision of the office in the absence or disability of the director and, in case of a vacancy in the office of director, shall continue in charge of the office until a successor is appointed and qualified, or until the governor appoints an acting director.

NEW SECTION. Sec. 7.  Any power or duty vested in or transferred to the director by law or executive order may be delegated by the director to the deputy director or to any other assistant or subordinate; but the director is responsible for the official acts of the officers and employees of the office.

NEW SECTION. Sec. 8.  The director may appoint such advisory committees or councils as may be required by any federal legislation as a condition to the receipt of federal funds by the office.  The director may also appoint state-wide committees or councils on such subject matters as are or come within the office's responsibilities.  The state-wide committees and councils shall have representation from both major political parties and shall have substantial consumer representation.

     Members of such state advisory committees or councils may be paid their travel expenses in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 9.  In furtherance of the policy of the state to cooperate with the federal government in all of the programs under the jurisdiction of the office, such rules as may become necessary to entitle the state to participate in federal funds may be adopted, unless expressly prohibited by law.  Any internal reorganization carried out under the terms of this chapter shall meet federal requirements that are a necessary condition to state receipt of federal funds.  Any section or provision of law dealing with the office that may be susceptible to more than one construction shall be interpreted in favor of the construction most likely to comply with federal laws entitling this state to receive federal funds for the various programs of the office.  If any law dealing with the office is ruled to be in conflict with federal requirements that are a prescribed condition of the allocation of federal funds to the state, or to any departments or agencies thereof, the conflicting part is declared to be inoperative solely to the extent of the conflict.

NEW SECTION. Sec. 10.  A new section is added to chapter 41.06 RCW to read as follows:

     In addition to the exemptions under RCW 41.06.070, the provisions of this chapter shall not apply in the office of student assistance to the director, the director's personal secretary, the deputy director, all division directors and assistant directors, and one confidential secretary for each of these officers.

NEW SECTION. Sec. 11.  (1) All powers, duties, and functions of the higher education coordinating board and the office of the adjutant general of the state military department pertaining to financial assistance for students at institutions of higher education are transferred to the office of student assistance.

     (2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the higher education coordinating board and the office of the adjutant general of the state military department pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the office of student assistance.  All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the higher education coordinating board and the office of the adjutant general of the state military department in carrying out the powers, functions, and duties transferred shall be made available to the office of student assistance.  All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the office of student assistance.

     (b) Any appropriations made to the higher education coordinating board and the office of the adjutant general of the state military department for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the office of student assistance.

     (c) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

     (3) All employees of the higher education coordinating board and the office of the adjutant general of the state military department engaged January 1, 1999, in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the office of student assistance.  All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the office of student assistance to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

     (4) All rules and all pending business before the higher education coordinating board and the office of the adjutant general of the state military department pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the office of student assistance.  All existing contracts and obligations shall remain in full force and shall be performed by the office of student assistance.

     (5) The transfer of the powers, duties, functions, and personnel of the higher education coordinating board and the office of the adjutant general of the state military department shall not affect the validity of any act performed before the effective date of this section.

     (6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer.  Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

     (7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the personnel board as provided by law.

     Sec. 12.  RCW 28B.04.020 and 1985 c 370 s 36 are each amended to read as follows:

     The legislature finds that homemakers are an unrecognized part of the work force who make an invaluable contribution to the strength, durability, and purpose of our state.

     The legislature further finds that there is an increasing number of persons in this state who, having fulfilled a role as homemaker, find themselves "displaced" in their middle years through divorce, death of spouse, disability of spouse, or other loss of family income of a spouse.  As a consequence, displaced homemakers are very often left with little or no income; they are ineligible for categorical welfare assistance; they are subject to the highest rate of unemployment of any sector of the work force; they face continuing discrimination in employment because of their age and lack of recent paid work experience; they are ineligible for unemployment insurance because they have been engaged in unpaid labor in the home; they are ineligible for social security benefits because they are too young, and many never qualify because they have been divorced from the family wage earner; they may have lost beneficiaries' rights under employer's pension and health plans through divorce or death of spouse; and they are often unacceptable to private health insurance plans because of their age.

     It is the purpose of this chapter to establish guidelines under which the ((higher education coordinating board)) office of student assistance shall contract to establish multipurpose service centers and programs to provide necessary training opportunities, counseling, and services for displaced homemakers so that they may enjoy the independence and economic security vital to a productive life.

     Sec. 13.  RCW 28B.04.030 and 1985 c 370 s 37 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) (("Board" means the higher education coordinating board.

     (2))) "Center" means a multipurpose service center for displaced homemakers as described in RCW 28B.04.040.

     (((3) "Program" means those programs described in RCW 28B.04.050 which provide direct, outreach, and information and training services which serve the needs of displaced homemakers.

     (4))) (2) "Displaced homemaker" means an individual who:

     (a) Has worked in the home for ten or more years providing unsalaried household services for family members on a full-time basis; and

     (b) Is not gainfully employed;

     (c) Needs assistance in securing employment; and

     (d) Has been dependent on the income of another family member but is no longer supported by that income, or has been dependent on federal assistance but is no longer eligible for that assistance, or is supported as the parent of minor children by public assistance or spousal support but whose children are within two years of reaching their majority.

(3) "Office" means the office of student assistance.

(4) "Program" means those programs described in RCW 28B.04.050 which provide direct, outreach, and information and training services which serve the needs of displaced homemakers.

     Sec. 14.  RCW 28B.04.040 and 1985 c 370 s 38 are each amended to read as follows:

     (1) The ((board)) office, in consultation with state and local governmental agencies, community groups, and local and national organizations concerned with displaced homemakers, shall receive applications and may contract with public or private nonprofit organizations to establish multipurpose service centers for displaced homemakers.  In determining sites and administering agencies or organizations for the centers, the ((board)) office shall consider the experience and capabilities of the public or private nonprofit organizations making application to provide services to a center.

     (2) The ((board)) office shall issue rules prescribing the standards to be met by each center in accordance with the policies set forth in this chapter.  Continuing funds for the maintenance of each center shall be contingent upon the determination by the ((board)) office that the center is in compliance with the contractual conditions and with the rules prescribed by the ((board)) office.

     Sec. 15.  RCW 28B.04.060 and 1985 c 370 s 40 are each amended to read as follows:

     The ((board)) office may contract, where appropriate, with public or private nonprofit groups or organizations serving the needs of displaced homemakers for programs designed to:

     (1) Provide direct services to displaced homemakers, including job counseling, job training and placement, health counseling, financial management, educational counseling, legal counseling, and referral services as described in RCW 28B.04.050;

     (2) Provide state-wide outreach and information services for displaced homemakers; and

     (3) Provide training opportunities for persons serving the needs of displaced homemakers, including those persons in areas not directly served by programs and centers established under this chapter.

     Sec. 16.  RCW 28B.04.080 and 1985 c 370 s 42 are each amended to read as follows:

     (1) The ((board)) office shall consult and cooperate with the department of social and health services; the state board for community and technical colleges ((education)); the superintendent of public instruction; ((the commission for vocational education;)) the employment security department; the department of labor and industries; sponsoring agencies under the federal comprehensive employment and training act (87 Stat. 839; 29 U.S.C. Sec. 801 et seq.), and any other persons or agencies as the ((board)) office deems appropriate to facilitate the coordination of centers established under this chapter with existing programs of a similar nature.

     (2) Annually on July 1st, each agency listed in subsection (1) of this section shall submit a description of each service or program under its jurisdiction which would support the programs and centers established by this chapter and the funds available for such support.

     (3) The ((board)) office shall serve as a clearinghouse for displaced homemaker information and resources and shall compile and disseminate state-wide information to the centers, related agencies, and interested persons upon request.

     Sec. 17.  RCW 28B.04.085 and 1987 c 230 s 2 are each amended to read as follows:

     (1) The ((executive coordinator of the higher education coordinating board)) director of the office shall establish an advisory committee, to be known as the displaced homemaker program advisory committee.

     (2) The advisory committee shall be advisory to the executive coordinator and staff of the ((board)) office.

     (3) Committee membership shall not exceed twenty-two persons and shall be geographically and generally representative of the state.  At least one member of the advisory committee shall either be or recently have been a displaced homemaker.

     (4) Functions of the advisory committee shall be:

     (a) To provide advice on all aspects of administration of the displaced homemaker program, including content of program rules, guidelines, and application procedures;

     (b) To assist in coordination of activities under the displaced homemaker program with related activities of other state and federal agencies, with particular emphasis on facilitation of coordinated funding.

     Sec. 18.  RCW 28B.04.110 and 1985 c 370 s 43 are each amended to read as follows:

     The ((board)) office may, in carrying out this chapter, accept, use, and dispose of contributions of money, services, and property:  PROVIDED, That funds generated within individual centers may be retained and utilized by those centers.  All moneys received by the ((board)) office or any employee thereof pursuant to this section shall be deposited in a depository approved by the state treasurer.  Disbursements of such funds shall be on authorization of the ((board)) office or a duly authorized representative thereof.  In order to maintain an effective expenditure and revenue control such funds shall be subject in all respects to chapter 43.88 RCW, but no appropriation shall be required to permit expenditure of such funds.

     Sec. 19.  RCW 28B.10.215 and 1985 c 370 s 51 are each amended to read as follows:

     There is allocated to each and every blind student attending any institution of higher education within the state a sum not to exceed two hundred dollars per quarter, or so much thereof as may be necessary in the opinion of the ((higher education coordinating board in the state of Washington)) office of student assistance, to provide said blind student with readers, books, recordings, recorders, or other means of reproducing and imparting ideas, while attending said institution of higher education:  PROVIDED, That said allocation shall be made out of any moneys in the general fund not otherwise appropriated.

     Sec. 20.  RCW 28B.10.220 and 1985 c 370 s 52 are each amended to read as follows:

     All blind student assistance shall be distributed under the supervision of the ((higher education coordinating board in the state of Washington)) office of student assistance.  The moneys or any part thereof allocated in the manner referred to in RCW 28B.10.215 shall, for furnishing said books or equipment or supplying said services, be paid by ((said board)) the office of student assistance directly to the state institution of higher education, directly to such blind student, heretofore mentioned, or to the student's parents, guardian, or some adult person, if the blind student is a minor, designated by said blind student to act as trustee of said funds, as shall be determined by the ((board)) office of student assistance.

     The ((board)) office of student assistance shall have power to prescribe and enforce all rules ((and regulations)) necessary to carry out the provisions of this section and RCW 28B.10.215.

     Sec. 21.  RCW 28B.10.792 and 1985 c 370 s 55 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall develop guidelines for determining the conditions under which an institution can be determined to be directly affected by a reciprocity agreement for the purposes of RCW 28B.10.790:  PROVIDED, That no institution shall be determined to be directly affected unless students from the county in which the institution is located are provided, pursuant to a reciprocity agreement, access to Washington institutions at resident tuition and fee rates to the extent authorized by Washington law.

     Sec. 22.  RCW 28B.10.802 and 1989 c 254 s 2 are each amended to read as follows:

     As used in RCW 28B.10.800 through 28B.10.824:

     (1) "Institutions of higher education" shall mean (1) any public university, college, community college, or vocational-technical institute operated by the state of Washington or any political subdivision thereof or (2) any other university, college, school, or institute in the state of Washington offering instruction beyond the high school level which is a member institution of an accrediting association recognized by rule of the board for the purposes of this section:  PROVIDED, That any institution, branch, extension or facility operating within the state of Washington which is affiliated with an institution operating in another state must be a separately accredited member institution of any such accrediting association:  PROVIDED FURTHER, That no institution of higher education shall be eligible to participate in a student financial aid program unless it agrees to and complies with program rules ((and regulations)) adopted pursuant to RCW 28B.10.822.

     (2) The term "financial aid" shall mean loans and/or grants to needy students enrolled or accepted for enrollment as a student at institutions of higher education.

     (3) The term "needy student" shall mean a post high school student of an institution of higher learning as defined in subsection (1) of this section who demonstrates to the ((board)) office the financial inability, either through the student's parents, family and/or personally, to meet the total cost of board, room, books, and tuition and incidental fees for any semester or quarter.

     (4) The term "disadvantaged student" shall mean a post high school student who by reason of adverse cultural, educational, environmental, experiential, familial or other circumstances is unable to qualify for enrollment as a full time student in an institution of higher learning, who would otherwise qualify as a needy student, and who is attending an institution of higher learning under an established program designed to qualify the student for enrollment as a full time student.

     (5) "Commission" or "board" shall mean the higher education coordinating board.

(6) "Office" means the office of student assistance.

     Sec. 23.  RCW 28B.10.804 and 1995 c 269 s 801 are each amended to read as follows:

     The ((commission)) office shall be cognizant of the following guidelines in the performance of its duties:

     (1) The ((commission)) office shall be research oriented, not only at its inception but continually through its existence.

     (2) The ((commission)) office shall coordinate all existing programs of financial aid except those specifically dedicated to a particular institution by the donor.

     (3) The ((commission)) office shall take the initiative and responsibility for coordinating all federal student financial aid programs to insure that the state recognizes the maximum potential effect of these programs, and shall design the state program which complements existing federal, state, and institutional programs.

     (4) Counseling is a paramount function of student financial aid, and in most cases could only be properly implemented at the institutional levels; therefore, state student financial aid programs shall be concerned with the attainment of those goals which, in the judgment of the ((commission)) office, are the reasons for the existence of a student financial aid program, and not solely with administration of the program on an individual basis.

     (5) The "package" approach of combining loans, grants and employment for student financial aid shall be the conceptional element of the state's involvement.

     Sec. 24.  RCW 28B.10.806 and 1989 c 254 s 3 are each amended to read as follows:

     The ((commission)) office shall have the following powers and duties:

     (1) Conduct a full analysis of student financial aid as a means of:

     (a) Fulfilling educational aspirations of students of the state of Washington((,)); and

     (b) Improving the general, social, cultural, and economic character of the state.

     Such an analysis will be a continuous one and will yield current information relevant to needed improvements in the state program of student financial aid.  The ((commission)) office will disseminate the information yielded by their analyses to all appropriate individuals and agents.

     (c) This study should include information on the following:

     (i) All programs and sources of available student financial aid((,));

     (ii) Distribution of Washington citizens by socio-economic class((,));

     (iii) Data from federal and state studies useful in identifying:

     (A) Demands of students for specific educational goals in colleges((,)); and

     (B) The discrepancy between high school students' preferences and the colleges they actually selected((.));

     (2) Design a state program of student financial aid based on the data of the study referred to in this section.  The state program will supplement available federal and local aid programs.  The state program of student financial aid will not exceed the difference between the budgetary costs of attending an institution of higher learning and the student's total resources, including family support, personal savings, employment, and federal and local aid programs((.));

     (3) Determine and establish criteria for financial need of the individual applicant based upon the consideration of that particular applicant.  In making this determination the ((commission)) office shall consider the following:

     (a) Assets and income of the student((.));

     (b) Assets and income of the parents, or the individuals legally responsible for the care and maintenance of the student((.));

     (c) The cost of attending the institution the student is attending or planning to attend((.));

     (d) Any other criteria deemed relevant to the ((commission.)) office;

     (4) Set the amount of financial aid to be awarded to any individual needy or disadvantaged student in any school year((.));

     (5) Award financial aid to needy or disadvantaged students for a school year based upon only that amount necessary to fill the financial gap between the budgetary cost of attending an institution of higher education and the family and student contribution((.)); and

     (6) Review the need and eligibility of all applications on an annual basis and adjust financial aid to reflect changes in the financial need of the recipients and the cost of attending the institution of higher education.

     Sec. 25.  RCW 28B.10.808 and 1991 c 164 s 4 are each amended to read as follows:

     In awarding grants, the ((commission)) office shall proceed substantially as follows:  PROVIDED, That nothing contained herein shall be construed to prevent the ((commission)) office, in the exercise of its sound discretion, from following another procedure when the best interest of the program so dictates:

     (1) The ((commission)) office shall annually select the financial aid award winners from among Washington residents applying for student financial aid who have been ranked according to financial need as determined by the amount of the family contribution and other considerations brought to the ((commission's)) office's attention.

     (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 dispersed.

     (3) A grant may be renewed until the course of study is completed, but not for more than an additional four academic years beyond the first year of the award.  These shall not be required to be consecutive years.  Qualifications for renewal will include maintaining satisfactory academic standing toward completion of the course of study, and continued eligibility as determined by the ((commission)) office.  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.10.8081.

     (4) In computing financial need the ((commission)) board 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.

     Sec. 26.  RCW 28B.10.810 and 1989 c 254 s 5 are each amended to read as follows:

     For a student to be eligible for financial aid the student must:

     (1) Be a "needy student" or "disadvantaged student" as determined by the ((commission)) office in accordance with RCW 28B.10.802 (3) and (4).

     (2) Have been domiciled within the state of Washington for at least one year.

     (3) Be enrolled or accepted for enrollment on at least a half-time basis at an institution of higher education in Washington.

     (4) Have complied with all the rules ((and regulations)) adopted by the ((commission)) office for the administration of RCW 28B.10.800 through 28B.10.824.

     Sec. 27.  RCW 28B.10.818 and 1969 ex.s. c 222 s 17 are each amended to read as follows:

     Funds appropriated for student financial assistance to be granted pursuant to RCW 28B.10.800 through 28B.10.824 shall be disbursed as determined by the ((commission)) office.

     Sec. 28.  RCW 28B.10.820 and 1969 ex.s. c 222 s 18 are each amended to read as follows:

     The ((commission)) office shall be authorized to accept grants, gifts, bequests, and devises of real and personal property from any source for the purpose of granting financial aid in addition to that funded by the state.

     Sec. 29.  RCW 28B.10.821 and 1997 c 269 s 1 are each amended to read as follows:

     The state educational trust fund is hereby established in the state treasury.  The primary purpose of the trust is to pledge state-wide available college student assistance to needy or disadvantaged students, especially middle and high school youth, considered at-risk of dropping out of secondary education who participate in ((board-approved)) office-approved early awareness and outreach programs and who enter any accredited Washington institution of postsecondary education within two years of high school graduation.

     The ((board)) office shall deposit refunds and recoveries of student financial aid funds expended in prior fiscal periods in such account.  The ((board)) office may also deposit moneys that have been contributed from other state, federal, or private sources.

     Expenditures from the fund shall be for financial aid to needy or disadvantaged students.  The ((board)) office may annually expend such sums from the fund as may be necessary to fulfill the purposes of this section, including not more than three percent for the costs to administer aid programs supported by the fund.  All earnings of investments of balances in the state educational trust fund shall be credited to the trust fund.  Expenditures from the fund shall not be subject to appropriation but are subject to allotment procedures under chapter 43.88 RCW.

     Sec. 30.  RCW 28B.10.822 and 1973 c 62 s 4 are each amended to read as follows:

     The ((commission)) office shall adopt rules ((and regulations)) as may be necessary or appropriate for effecting the provisions of RCW 28B.10.800 through 28B.10.824, and not in conflict with RCW 28B.10.800 through 28B.10.824, in accordance with the provisions of chapter 34.05 RCW, the ((state higher education)) administrative procedure act.

     Sec. 31.  RCW 28B.12.030 and 1994 c 130 s 3 are each amended to read as follows:

     As used in this chapter, the following words and terms shall have the following meanings, unless the context shall clearly indicate another or different meaning or intent:

     (1) The term "needy student" shall mean a student enrolled or accepted for enrollment at a post-secondary institution who, according to a system of need analysis approved by the ((higher education coordinating board)) office of student assistance, demonstrates a financial inability, either parental, familial, or personal, to bear the total cost of education for any semester or quarter.

     (2) The term "eligible institution" shall mean any post-secondary institution in this state accredited by the Northwest Association of Schools and Colleges or any public technical college in the state.

     Sec. 32.  RCW 28B.12.040 and 1994 c 130 s 4 are each amended to read as follows:

     With the assistance of an advisory committee, the ((higher education coordinating board)) office of student assistance shall develop and administer the state work-study program.  The ((board)) office of student assistance shall be authorized to enter into agreements with employers and eligible institutions for the operation of the program.  These agreements shall include such provisions as the ((higher education coordinating board)) office of student assistance may deem necessary or appropriate to carry out the purposes of this chapter.

     The members of the work-study advisory committee may include, but need not be limited to representatives of public and private community colleges, technical colleges, and four-year institutions of higher education; vocational schools; students; community service organizations; public schools; business; and labor.  When selecting members of the advisory committee, the ((board)) office of student assistance shall consult with institutions of higher education, the state board for community and technical colleges, the work force training and education coordinating board, and appropriate associations and organizations.  With the exception of off-campus community service placements, the share from moneys disbursed under the state work-study program of the compensation of students employed under such program in accordance with such agreements shall not exceed eighty percent of the total such compensation paid such students.

     By rule, the ((board)) office of student assistance shall define community service placements and may determine any salary matching requirements for any community service employers.

     Sec. 33.  RCW 28B.12.050 and 1994 c 130 s 5 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall disburse state work-study funds.  In performing its duties under this section, the ((board)) office of student assistance shall consult eligible institutions and post-secondary education advisory and governing bodies.  The ((board)) office of student assistance shall establish criteria designed to achieve such distribution of assistance under this chapter among students attending eligible institutions as will most effectively carry out the purposes of this chapter.

     Sec. 34.  RCW 28B.12.060 and 1994 c 130 s 6 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall adopt rules as may be necessary or appropriate for effecting the provisions of this chapter, and not in conflict with this chapter, in accordance with the provisions of chapter 34.05 RCW, the ((state higher education)) administrative procedure act.  Such rules shall include provisions designed to make employment under the work-study program reasonably available, to the extent of available funds, to all eligible students in eligible post-secondary institutions in need thereof.  The rules shall include:

     (1) Providing work under the state work-study program that will not result in the displacement of employed workers or impair existing contracts for services;

     (2) Furnishing work only to a student who:

     (a) Is capable, in the opinion of the eligible institution, of maintaining good standing in such course of study while employed under the program covered by the agreement; and

     (b) Has been accepted for enrollment as at least a half-time student at the eligible institution or, in the case of a student already enrolled in and attending the eligible institution, is in good standing and in at least half-time attendance there either as an undergraduate, graduate or professional student; and

     (c) Is not pursuing a degree in theology;

     (3) Placing priority on providing:

     (a) Work opportunities for students who are residents of the state of Washington as defined in RCW 28B.15.012 and 28B.15.013 except resident students defined in RCW 28B.15.012(2)(e);

     (b) Job placements in fields related to each student's academic or vocational pursuits, with an emphasis on off-campus job placements whenever appropriate; and

     (c) Off-campus community service placements;

     (4) Provisions to assure that in the state institutions of higher education, utilization of this work-study program:

     (a) Shall only supplement and not supplant classified positions under jurisdiction of chapter 41.06 RCW;

     (b) That all positions established which are comparable shall be identified to a job classification under the Washington personnel resources board's classification plan and shall receive equal compensation;

     (c) Shall not take place in any manner that would replace classified positions reduced due to lack of funds or work; and

     (d) That work study positions shall only be established at entry level positions of the classified service unless the overall scope and responsibilities of the position indicate a higher level; and

     (5) Provisions to encourage job placements in occupations that meet Washington's economic development goals, especially those in international trade and international relations.  The ((board)) office of student assistance shall permit appropriate job placements in other states and other countries.

     Sec. 35.  RCW 28B.12.070 and 1994 c 130 s 7 are each amended to read as follows:

     Each eligible institution shall submit to the ((higher education coordinating board)) office of student assistance an annual report in accordance with such requirements as are adopted by the ((board)) office.

     Sec. 36.  RCW 28B.15.760 and 1985 c 370 s 79 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 28B.15.762 and 28B.15.764.

     (1) "Institution of higher education" or "institution" means a college or university in the state of Washington which is a member institution of an accrediting association recognized as such by rule of the higher education coordinating board.

     (2) "Board" means the higher education coordinating board.

     (3) "Eligible student" means a student registered for at least ten credit hours or the equivalent and demonstrates achievement of a 3.00 grade point average for each academic year, who is a resident student as defined by RCW 28B.15.012 through 28B.15.015, who is a "needy student" as defined in RCW 28B.10.802, and who has a declared major in a program leading to a degree in teacher education in a field of science or mathematics, or a certificated teacher who meets the same credit hour and "needy student" requirements and is seeking an additional degree in science or mathematics.

     (4) "Public school" means a middle school, junior high school, or high school within the public school system referred to in Article IX of the state Constitution.

     (5) "Forgiven" or "to forgive" means to collect service as a teacher in a field of science or mathematics at a public school in the state of Washington in lieu of monetary payment.

     (6) "Satisfied" means paid-in-full.

     (7) "Borrower" means an eligible student who has received a loan under RCW 28B.15.762.

(8) "Office" means the office of student assistance.

     Sec. 37.  RCW 28B.15.762 and 1996 c 107 s 2 are each amended to read as follows:

     (1) The ((board)) office may make long-term loans to eligible students at institutions of higher education from the funds appropriated to the ((board)) office for this purpose.  The amount of any such loan shall not exceed the demonstrated financial need of the student or two thousand five hundred dollars for each academic year whichever is less, and the total amount of such loans to an eligible student shall not exceed ten thousand dollars.  The interest rates and terms of deferral of such loans shall be consistent with the terms of the guaranteed loan program established by 20 U.S.C. Sec. 1701 et seq.  The period for repaying the loan principal and interest shall be ten years with payments accruing quarterly commencing nine months from the date the borrower graduated.  The entire principal and interest of each loan payment shall be forgiven for each payment period in which the borrower teaches science or mathematics in a public school in this state until the entire loan is satisfied or the borrower ceases to teach science or mathematics at a public school in this state.  Should the borrower cease to teach science or mathematics at a public school in this state before the time in which the principal and interest on the loan are satisfied, payments on the unsatisfied portion of the principal and interest on the loan shall begin the next payment period and continue until the remainder of the loan is paid.

     (2) The ((board)) office is responsible for collection of loans made under subsection (1) of this section and shall exercise due diligence in such collection, maintaining all necessary records to insure that maximum repayments are made.  Collection and servicing of loans under subsection (1) of this section shall be pursued using the full extent of the law, including wage garnishment if necessary, and shall be performed by entities approved for such servicing by the Washington student loan guaranty association or its successor agency.  The ((board)) office is responsible to forgive all or parts of such loans under the criteria established in subsection (1) of this section and shall maintain all necessary records of forgiven payments.

     (3) Receipts from the payment of principal or interest or any other subsidies to which the ((board)) office as lender is entitled, which are paid by or on behalf of borrowers under subsection (1) of this section, shall be deposited with the ((higher education coordinating board)) office and shall be used to cover the costs of making the loans under subsection (1) of this section, maintaining necessary records, and making collections under subsection (2) of this section.  The ((board)) office shall maintain accurate records of these costs, and all receipts beyond those necessary to pay such costs shall be used to make loans to eligible students.

     (4) Any funds not used to make loans, or to cover the cost of making loans or making collections, shall be placed in the state educational trust fund for needy or disadvantaged students.

     (5) The ((board)) office shall adopt necessary rules to implement this section.

     Sec. 38.  RCW 28B.15.764 and 1985 c 370 s 81 are each amended to read as follows:

     The ((board)) office and institutions of higher education shall work cooperatively to implement RCW 28B.15.762 and to publicize this program to eligible students.

     Sec. 39.  RCW 28B.80.240 and 1985 c 370 s 23 are each amended to read as follows:

     The ((board)) office shall administer any state program or state-administered federal program of student financial aid now or hereafter established.

     Sec. 40.  RCW 28B.80.245 and 1995 1st sp.s. c 5 s 3 are each amended to read as follows:

     (1) Recipients of the Washington scholars award under RCW 28A.600.100 through 28A.600.150 who choose to attend an independent college or university in this state, as defined in subsection (4) of this section, and recipients of the award named after June 30, 1994, who choose to attend a public college or university in the state may receive grants under this section if moneys are available.  The ((higher education coordinating board)) office shall distribute grants to eligible students under this section from moneys appropriated for this purpose.  The individual grants shall not exceed, on a yearly basis, the yearly, full-time, resident, undergraduate tuition and service and activities fees in effect at the state-funded research universities.  Grants to recipients attending an independent institution shall be contingent upon the institution matching on at least a dollar-for-dollar basis, either with actual money or by a waiver of fees, the amount of the grant received by the student from the state.  The ((higher education coordinating board)) office shall establish procedures, by rule, to disburse the awards as direct grants to the students.

     (2) To qualify for the grant, recipients shall enter the in-state college or university within three years of high school graduation and maintain a minimum grade point average at the college or university equivalent to 3.30.  Students shall be eligible to receive a maximum of twelve quarters or eight semesters of grants for undergraduate study and may transfer among in-state public and independent colleges and universities during that period and continue to receive the grant as provided under RCW 28B.80.246 (as recodified by this act).  If the student's cumulative grade point average falls below 3.30 during the first three quarters or two semesters, that student may petition the ((higher education coordinating board)) office which shall have the authority to establish a probationary period until such time as the student's grade point average meets required standards.

     (3) No grant shall be awarded to any student who is pursuing a degree in theology.

     (4) As used in this section, "independent college or university" means a private, nonprofit educational institution, the main campus of which is permanently situated in the state, open to residents of the state, providing programs of education beyond the high school level leading at least to the baccalaureate degree, and accredited by the northwest association of schools and colleges as of June 9, 1988, and other institutions as may be developed that are approved by the higher education coordinating board as meeting equivalent standards as those institutions accredited under this section.

     (5) As used in this section, "public college or university" means an institution of higher education as defined in RCW 28B.10.016.

     Sec. 41.  RCW 28B.80.360 and 1998 c 245 s 24 are each amended to read as follows:

     The ((board)) office shall perform the following administrative responsibilities:

     (1) Administer the programs set forth in the following statutes:  RCW 28A.600.100 through 28A.600.150 (Washington scholars); chapter 28B.04 RCW (displaced homemakers); chapter 28B.85 RCW (degree-granting institutions); RCW 28B.10.210 through 28B.10.220 (blind students subsidy); RCW 28B.10.800 through 28B.10.824 (student financial aid program); chapter 28B.12 RCW (work study); RCW 28B.15.067 (establishing tuition and fees); RCW 28B.15.543 (tuition waivers for Washington scholars); RCW 28B.15.760 through 28B.15.766 (math and science loans); RCW 28B.80.150 through 28B.80.170 (student exchange compact); RCW 28B.80.240 (as recodified by this act) (student aid programs); and RCW 28B.80.210 (federal programs).

     (2) Study the delegation of the administration of the following:  RCW 28B.65.040 through 28B.65.060 (high-technology board); chapter 28B.85 RCW (degree-granting institutions); RCW 28B.80.150 through 28B.80.170 (student exchange compact programs); RCW 28B.80.200 (state commission for federal law purposes); RCW 28B.80.210 (enumerated federal programs); RCW 28B.80.230 (receipt of federal funds); RCW 28B.80.240 (as recodified by this act) (student financial aid programs); RCW 28A.600.120 through 28A.600.150 (Washington scholars); RCW 28B.15.543 (Washington scholars); RCW 28B.04.020 through 28B.04.110 (displaced homemakers); RCW 28B.10.215 and 28B.10.220 (blind students); RCW 28B.10.790, 28B.10.792, and 28B.10.802 through 28B.10.844 (student financial aid); RCW 28B.12.040 through 28B.12.070 (student work study); RCW 28B.15.100 (reciprocity agreement); RCW 28B.15.730 through 28B.15.736 (Oregon reciprocity); RCW 28B.15.750 through 28B.15.754 (Idaho reciprocity); RCW 28B.15.756 and 28B.15.758 (British Columbia reciprocity); and RCW 28B.15.760 through 28B.15.764 (math/science loans).

     Sec. 42.  RCW 28B.101.030 and 1990 c 288 s 5 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall develop and administer the educational opportunity grant program.  The ((board)) office shall adopt necessary rules and guidelines and develop criteria and procedures to select eligible participants in the program.  Payment shall be made directly to the eligible participant periodically upon verification of enrollment and satisfactory progress towards degree completion.

     Sec. 43.  RCW 28B.102.020 and 1996 c 53 s 1 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) "Conditional scholarship" means a loan that is forgiven in whole or in part if the recipient renders service as a teacher in an approved education program in this state.

     (2) "Institution of higher education" or "institution" means a college or university in the state of Washington which is accredited by an accrediting association recognized as such by rule of the higher education coordinating board.

     (3) (("Board" means the higher education coordinating board)) "Office" means the office of financial assistance.

     (4) "Eligible student" means a student who is registered for at least ten credit hours or the equivalent, demonstrates achievement of at least a 3.30 grade point average for students entering an institution of higher education directly from high school or maintains at least a 3.00 grade point average or the equivalent for each academic year in an institution of higher education, is a resident student as defined by RCW 28B.15.012 and 28B.15.013, and has a declared intention to complete an approved preparation program leading to initial teacher certification or required for earning an additional endorsement, or a college or university graduate who meets the same credit hour requirements and is seeking an additional teaching endorsement or initial teacher certification.  Resident students defined in RCW 28B.15.012(2)(e) are not eligible students under this chapter.

     (5) "Public school" means an elementary school, a middle school, junior high school, or high school within the public school system referred to in Article IX of the state Constitution.

     (6) "Forgiven" or "to forgive" or "forgiveness" means to render service as a teacher in an approved education program in the state of Washington in lieu of monetary repayment.

     (7) "Satisfied" means paid-in-full.

     (8) "Participant" means an eligible student who has received a conditional scholarship under this chapter.

     (9) "Targeted ethnic minority" means a group of Americans with a common ethnic or racial heritage selected by the ((board)) office for program consideration due to societal concerns such as high dropout rates or low rates of college participation by members of the group.

     (10) "Approved education program" means an education program in the state of Washington for knowledge and skills generally learned in preschool through twelfth grade.  Approved education programs may include but are not limited to:

     (a) K-12 schools under Title 28A RCW;

     (b) Early childhood education and assistance programs under RCW 28A.215.100 through 28A.215.200 or the federal head start program;

     (c) An approved school under chapter 28A.195 RCW;

     (d) Education centers under chapter 28A.205 RCW;

     (e) English as a second language programs and programs leading to high school graduation or the equivalency operated by community or technical colleges; and

     (f) Tribal schools in Washington approved by the federal bureau of Indian affairs.

     Sec. 44.  RCW 28B.102.030 and 1987 c 437 s 3 are each amended to read as follows:

     The future teachers conditional scholarship program is established.  The program shall be administered by the ((higher education coordinating board)) office.  In administering the program, the ((board)) office shall have the following powers and duties:

     (1) Select students to receive conditional scholarships, with the assistance of a screening committee composed of teachers and leaders in government, business, and education;

     (2) Adopt necessary rules and guidelines;

     (3) Publicize the program;

     (4) Collect and manage repayments from students who do not meet their teaching obligations under this chapter; and

     (5) Solicit and accept grants and donations from public and private sources for the program.

     Sec. 45.  RCW 28B.102.040 and 1987 c 437 s 4 are each amended to read as follows:

     The ((higher education coordinating board)) office shall establish a planning committee to develop criteria for the screening and selection of recipients of the conditional scholarships.  These criteria shall emphasize factors demonstrating excellence including but not limited to superior scholastic achievement, leadership ability, community contributions, and an ability to act as a role model for targeted ethnic minority students.  These criteria also may include, for approximately half of the recipients, requirements that those recipients meet the definition of "needy student" under RCW 28B.10.802.

     Sec. 46.  RCW 28B.102.045 and 1988 c 125 s 7 are each amended to read as follows:

     The ((board)) office may waive grade point requirements for an otherwise eligible individual student under special circumstances.

     Sec. 47.  RCW 28B.102.050 and 1987 c 437 s 5 are each amended to read as follows:

     The ((board)) office may award conditional scholarships to eligible students from the funds appropriated to the ((board)) office for this purpose, or from any private donations, or any other funds given to the ((board)) office for this program.  The amount of the conditional scholarship awarded an individual shall not exceed three thousand dollars per academic year.  Students are eligible to receive conditional scholarships for a maximum of five years.

     Sec. 48.  RCW 28B.102.060 and 1996 c 53 s 2 are each amended to read as follows:

     (1) Participants in the conditional scholarship program incur an obligation to repay the conditional scholarship, with interest, unless they teach for two years in an approved education program for each year of scholarship received, under rules adopted by the ((board)) office.

     (2) The interest rate shall be eight percent for the first four years of repayment and ten percent beginning with the fifth year of repayment.

     (3) The period for repayment shall be ten years, with payments of principal and interest accruing quarterly commencing nine months from the date the participant completes or discontinues the course of study.  Provisions for deferral of payment shall be determined by the ((board)) office.

     (4) The entire principal and interest of each payment shall be forgiven for each payment period in which the participant teaches in an approved education program until the entire repayment obligation is satisfied.  Should the participant cease to teach in an approved education program in this state before the participant's repayment obligation is completed, payments on the unsatisfied portion of the principal and interest shall begin the next payment period and continue until the remainder of the participant's repayment obligation is satisfied.

     (5) The ((board)) office is responsible for collection of repayments made under this section and shall exercise due diligence in such collection, maintaining all necessary records to insure that maximum repayments are made.  Collection and servicing of repayments under this section shall be pursued using the full extent of the law, including wage garnishment if necessary.  The ((board)) office is responsible to forgive all or parts of such repayments under the criteria established in this section and shall maintain all necessary records of forgiven payments.

     (6) Receipts from the payment of principal or interest or any other subsidies to which the ((board)) office as administrator is entitled, which are paid by or on behalf of participants under this section, shall be deposited with the ((higher education coordinating board)) office and shall be used to cover the costs of granting the conditional scholarships, maintaining necessary records, and making collections under subsection (5) of this section.  The ((board)) office shall maintain accurate records of these costs, and all receipts beyond those necessary to pay such costs shall be used to grant conditional scholarships to eligible students.

     (7) The ((board)) office shall temporarily or, in special circumstances, permanently defer the requirements of this section for eligible students as defined in RCW 28B.10.017.

     (8) The ((board)) office may cancel a recipient's repayment obligation due to the recipient's total and permanent disability or death, subject to documentation as required by the ((board)) office.

     (9) This section applies to recipients of conditional scholarships awarded before or after July 1, 1996.

     Sec. 49.  RCW 28B.102.070 and 1987 c 437 s 7 are each amended to read as follows:

     After consulting with the ((higher education coordinating board)) office, the governor may transfer the administration of this program to another agency with an appropriate educational mission.

     Sec. 50.  RCW 28B.103.010 and 1994 c 234 s 5 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this section and RCW 28B.103.020 and 28B.103.030.

     (1) "Eligible student" means an enlisted member or an officer of the rank of captain or below in the Washington national guard who is a resident student as defined in RCW 28B.15.012 and 28B.15.013, who attends an institution of higher education that is located in this state and accredited by the Northwest Association of Schools and Colleges, and who meets any additional selection criteria adopted by the office.

     (2) "Conditional scholarship" means a loan that is forgiven in whole or in part if the recipient renders service as a member of the Washington national guard under rules adopted by the office.

     (3) "Forgiven" or "to forgive" or "forgiveness" means either to render service in the Washington national guard in lieu of monetary repayment, or to be relieved of the service obligation under rules adopted by the office.

     (4) "Office" means the office of ((the adjutant general of the state military department)) student assistance.

     (5) "Participant" means an eligible student who has received a conditional scholarship under this chapter.

     (6) "Service obligation" means serving in the Washington national guard for one additional year for each year of conditional scholarship received under this program.

     Sec. 51.  RCW 28B.108.010 and 1991 c 228 s 10 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) "Institution of higher education" or "institution" means a college or university in the state of Washington which is accredited by an accrediting association recognized as such by rule of the higher education coordinating board.

     (2) (("Board" means the higher education coordinating board)) "Office" means the office of student assistance.

     (3) "Eligible student" or "student" means an American Indian who is a financially needy student, as defined in RCW 28B.10.802, who is a resident student, as defined by RCW 28B.15.012(2), who is a full-time student at an institution of higher education, and who promises to use his or her education to benefit other American Indians.

     Sec. 52.  RCW 28B.108.020 and 1990 c 287 s 3 are each amended to read as follows:

     The American Indian endowed scholarship program is created.  The program shall be administered by the ((higher education coordinating board)) office.  In administering the program, the ((board's)) office's powers and duties shall include but not be limited to:

     (1) Selecting students to receive scholarships, with the assistance of a screening committee composed of persons involved in helping American Indian students to obtain a higher education.  The membership of the committee may include, but is not limited to representatives of:  Indian tribes, urban Indians, the governor's office of Indian affairs, the Washington state Indian education association, and institutions of higher education;

     (2) Adopting necessary rules and guidelines;

     (3) Publicizing the program;

     (4) Accepting and depositing donations into the endowment fund created in RCW 28B.108.060;

     (5) Requesting and accepting from the state treasurer moneys earned from the trust fund and the endowment fund created in RCW 28B.108.050 and 28B.108.060;

     (6) Soliciting and accepting grants and donations from public and private sources for the program; and

     (7) Naming scholarships in honor of those American Indians from Washington who have acted as role models.

     Sec. 53.  RCW 28B.108.030 and 1991 c 228 s 11 are each amended to read as follows:

     The ((higher education coordinating board)) office shall establish an advisory committee to assist in program design and to develop criteria for the screening and selection of scholarship recipients.  The committee shall be composed of representatives of the same groups as the screening committee described in RCW 28B.108.020.  The criteria shall assess the student's social and cultural ties to an American Indian community within the state.  The criteria shall include a priority for upper-division or graduate students.  The criteria may include a priority for students who are majoring in program areas in which expertise is needed by the state's American Indians.

     Sec. 54.  RCW 28B.108.040 and 1990 c 287 s 5 are each amended to read as follows:

     The ((board)) office may award scholarships to eligible students from moneys earned from the endowment fund created in RCW 28B.108.060, or from funds appropriated to the ((board)) office for this purpose, or from any private donations, or from any other funds given to the ((board)) office for this program.  For an undergraduate student, the amount of the scholarship shall not exceed the student's demonstrated financial need.  For a graduate student, the amount of the scholarship shall not exceed the student's demonstrated need; or the stipend of a teaching assistant, including tuition, at the University of Washington; whichever is higher.  In calculating a student's need, the ((board)) office shall consider the student's costs for tuition, fees, books, supplies, transportation, room, board, personal expenses, and child care.  The student's scholarship awarded under this chapter shall not exceed the amount received by a student attending a state research university.  A student is eligible to receive a scholarship for a maximum of five years.  However, the length of the scholarship shall be determined at the discretion of the ((board)) office.

     Sec. 55.  RCW 28B.108.050 and 1991 sp.s. c 13 s 107 are each amended to read as follows:

     The American Indian endowed scholarship trust fund is established.  The trust fund shall be administered by the state treasurer.  Funds appropriated by the legislature for the trust fund shall be deposited into the fund.  At the request of the ((higher education coordinating board)) office, and when conditions set forth in RCW 28B.108.070 are met, the treasurer shall deposit state matching moneys in the trust fund into the American Indian endowment fund.  No appropriation is required for expenditures from the trust fund.

     Sec. 56.  RCW 28B.108.060 and 1993 c 372 s 1 are each amended to read as follows:

     The American Indian scholarship endowment fund is established.  The endowment fund shall be administered by the state treasurer.

     (1) Moneys received from the ((higher education coordinating board)) office, private donations, state matching moneys, and funds received from any other source may be deposited into the endowment fund.  Private moneys received as a gift subject to conditions may be deposited into the fund.

     (2) At the request of the ((higher education coordinating board)) office, the treasurer shall release earnings from the endowment fund to the ((board)) office for scholarships.  No appropriation is required for expenditures from the endowment fund.

     (3) When notified by the ((higher education coordinating board)) office or by court order that a condition attached to a gift of private moneys in the fund has failed, the treasurer shall release those moneys to the donors according to the terms of the conditional gift.

     (4) The principal of the endowment fund shall not be invaded.  The release of moneys under subsection (3) of this section shall not constitute an invasion of corpus.

     (5) The earnings on the fund shall be used solely for the purposes set forth in RCW 28B.108.040, except when the terms of a conditional gift of private moneys in the fund require that a portion of earnings on such moneys be reinvested in the fund.

     Sec. 57.  RCW 28B.108.070 and 1993 c 372 s 2 are each amended to read as follows:

     The ((higher education coordinating board)) office may request that the treasurer deposit fifty thousand dollars of state matching funds into the American Indian scholarship endowment fund when the ((board)) office can match the state funds with an equal amount of private cash donations, including conditional gifts.  Private cash donations means moneys from nonstate sources that include, but are not limited to, federal moneys, tribal moneys, and assessments by commodity commissions authorized to conduct research activities, including but not limited to research studies authorized under RCW 15.66.030 and 15.65.040.

     Sec. 58.  RCW 28B.109.010 and 1996 c 253 s 401 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) (("Board" means the higher education coordinating board.

     (2))) "Eligible participant" means an international student whose country of residence has a trade relationship with the state of Washington.

     (((3))) (2) "Institution of higher education" or "institution" means a college or university in the state of Washington that is accredited by an accrediting association recognized as such by rule of the higher education coordinating board.

(3) "Office" means the office of student assistance.

     (4) "Service obligation" means volunteering for a minimum number of hours as established by the ((board)) office based on the amount of scholarship award, to speak to or teach groups of Washington citizens, including but not limited to elementary, middle, and high schools, service clubs, and universities.

     (5) "Washington international exchange scholarship program" means a scholarship award for a period not to exceed one academic year to attend a Washington institution of higher education made to an international student whose country has an established trade relationship with Washington.

     Sec. 59.  RCW 28B.109.020 and 1996 c 253 s 402 are each amended to read as follows:

     The Washington international exchange scholarship program is created subject to funding under RCW 28B.109.060.  The program shall be administered by the ((board)) office.  In administering the program, the ((board)) office may:

     (1) Convene an advisory committee that may include but need not be limited to representatives of the office of the superintendent of public instruction, the department of community, trade, and economic development, the secretary of state, private business, and institutions of higher education;

     (2) Select students to receive the scholarship with the assistance of a screening committee composed of leaders in business, international trade, and education;

     (3) Adopt necessary rules and guidelines including rules for disbursing scholarship funds to participants;

     (4) Publicize the program;

     (5) Solicit and accept grants and donations from public and private sources for the program;

     (6) Establish and notify participants of service obligations; and

     (7) Establish a formula for selecting the countries from which participants may be selected in consultation with the department of community, trade, and economic development.

     Sec. 60.  RCW 28B.109.030 and 1996 c 253 s 403 are each amended to read as follows:

     The ((board)) office may negotiate and enter into a reciprocal agreement with foreign countries that have international students attending institutions in Washington.  The goal of the reciprocal agreements shall be to allow Washington students enrolled in an institution of higher education to attend an international institution under similar terms and conditions.

     Sec. 61.  RCW 28B.109.040 and 1996 c 253 s 404 are each amended to read as follows:

     If funds are available, the ((board)) office shall select students yearly to receive a Washington international exchange student scholarship from moneys earned from the Washington international exchange scholarship endowment fund created in RCW 28B.109.060, from funds appropriated to the ((board)) office for this purpose, or from any private donations, or from any other funds given to the ((board)) office for this program.

     Sec. 62.  RCW 28B.109.050 and 1996 c 253 s 405 are each amended to read as follows:

     The Washington international exchange trust fund is established in the custody of the state treasurer.  Any funds appropriated by the legislature for the trust fund shall be deposited into the fund.  At the request of the ((board)) office, and when conditions set forth in RCW 28B.109.070 are met, the treasurer shall deposit state matching moneys from the Washington international exchange trust fund into the Washington international exchange scholarship endowment fund.  No appropriation is required for expenditures from the trust fund.

     Sec. 63.  RCW 28B.109.060 and 1996 c 253 s 406 are each amended to read as follows:

     The Washington international exchange scholarship endowment fund is established in the custody of the state treasurer.  Moneys received from the private donations and funds received from any other source may be deposited into the endowment fund.  At the request of the ((board)) office, the treasurer shall release earnings from the endowment fund to the ((board)) office for scholarships.  No appropriation is required for expenditures from the endowment fund.  The principal of the endowment fund shall not be invaded.  The earnings on the fund shall be used solely for the purposes in this chapter.

     Sec. 64.  RCW 28B.109.070 and 1996 c 253 s 407 are each amended to read as follows:

     The ((board)) office may request that the treasurer deposit state matching funds into the Washington international exchange scholarship endowment fund when the ((board)) office can match the state funds with an equal amount of private cash donations, including conditional gifts.

     Sec. 65.  RCW 28B.109.080 and 1996 c 253 s 408 are each amended to read as follows:

     Each Washington international exchange scholarship recipient shall agree to complete the service obligation as defined by the ((board)) office.

     Sec. 66.  RCW 28B.115.020 and 1991 c 332 s 15 are each amended to read as follows:

     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) (("Board" means the higher education coordinating board.

     (2))) "Department" means the state department of health.

     (((3))) (2) "Eligible education and training programs" means education and training programs approved by the department that lead to eligibility for a credential as a credentialed health care professional.

     (((4))) (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 determined by the ((board)) office.

     (((5))) (4) "Eligible student" means a student who has been accepted into an eligible education or training program and has a declared intention to serve in a health professional shortage area upon completion of the education or training program.

     (((6))) (5) "Forgiven" or "to forgive" or "forgiveness" means to render health care services in a health professional shortage area in the state of Washington in lieu of monetary repayment.

     (((7))) (6) "Health professional shortage areas" means those areas where credentialed health care professionals are in short supply as a result of geographic maldistribution or as the result of a short supply of credentialed health care professionals in specialty health care areas and where vacancies exist in serious numbers that jeopardize patient care and pose a threat to the public health and safety.  The department shall determine health professional shortage areas as provided for in RCW 28B.115.070, or until June 1, 1992, as provided for in RCW 28B.115.060.  In making health professional shortage area designations in the state the department may be guided by applicable federal standards for "health manpower shortage areas," and "medically underserved areas," and "medically underserved populations."

     (((8))) (7) "Credentialed health care profession" means a health care profession regulated by a disciplining authority in the state of Washington under RCW 18.130.040 or by the state board of pharmacy under chapter 18.64 RCW and designated by the department in RCW 28B.115.070, or until June 1, 1992, as established in RCW 28B.115.060 as a profession having shortages of credentialed health care professionals in the state.

     (((9))) (8) "Credentialed health care professional" means a person regulated by a disciplining authority in the state of Washington to practice a health care profession under RCW 18.130.040 or by the state board of pharmacy under chapter 18.64 RCW.

     (((10))) (9) "Loan repayment" means a loan that is paid in full or in part if the participant renders health care services in a health professional shortage area as defined by the department.

     (((11))) (10) "Nonshortage rural area" means a nonurban area of the state of Washington that has not been designated as a rural physician shortage area.  The department shall identify the nonshortage rural areas of the state.

(11) "Office" means the office of student assistance.

     (12) "Participant" means a credentialed health care professional who has received a loan repayment award and has commenced practice as a credentialed health care provider in a designated health professional shortage area or an eligible student who has received a scholarship under this program.

     (13) "Program" means the health professional loan repayment and scholarship program.

     (14) "Required service obligation" means an obligation by the participant to provide health care services in a health professional shortage area for a period to be established as provided for in this chapter.

     (15) "Rural physician shortage area" means rural geographic areas where primary care physicians are in short supply as a result of geographic maldistributions and where their limited numbers jeopardize patient care and pose a threat to public health and safety.  The department shall designate rural physician shortage areas.

     (16) "Satisfied" means paid-in-full.

     (17) "Scholarship" means a loan that is forgiven in whole or in part if the recipient renders health care services in a health professional shortage area.

     (18) "Sponsoring community" means a rural hospital or hospitals as authorized in chapter 70.41 RCW, a rural health care facility or facilities as authorized in chapter 70.175 RCW, or a city or county government or governments.

     Sec. 67.  RCW 28B.115.030 and 1991 c 332 s 16 are each amended to read as follows:

     The health professional loan repayment and scholarship program is established for credentialed health professionals serving in health professional shortage areas.  The program shall be administered by the ((higher education coordinating board)) office.  In administrating this program, the ((board)) office shall:

     (1) Select credentialed health care professionals to participate in the loan repayment portion of the loan repayment and scholarship program and select eligible students to participate in the scholarship portion of the loan repayment and scholarship program;

     (2) Adopt rules and develop guidelines to administer the program;

     (3) Collect and manage repayments from participants who do not meet their service obligations under this chapter;

     (4) Publicize the program, particularly to maximize participation among individuals in shortage areas and among populations expected to experience the greatest growth in the work force;

     (5) Solicit and accept grants and donations from public and private sources for the program; and

     (6) Develop criteria for a contract for service in lieu of the service obligation where appropriate, that may be a combination of service and payment.

     Sec. 68.  RCW 28B.115.050 and 1991 c 332 s 18 are each amended to read as follows:

     The ((board)) office shall establish a planning committee to assist it in developing criteria for the selection of participants.  The ((board)) office shall include on the planning committee representatives of the department, the department of social and health services, appropriate representatives from health care facilities, provider groups, consumers, the state board ((of)) for community and technical colleges ((education)), the superintendent of public instruction, and other appropriate public and private agencies and organizations.  The criteria may require that some of the participants meet the definition of "needy student" under RCW 28B.10.802.

     Sec. 69.  RCW 28B.115.070 and 1991 c 332 s 20 are each amended to read as follows:

     After June 1, 1992, the department, in consultation with the ((board)) office and the department of social and health services, shall:

     (1) Determine eligible credentialed health care professions for the purposes of the loan repayment and scholarship program authorized by this chapter.  Eligibility shall be based upon an assessment that determines that there is a shortage or insufficient availability of a credentialed profession so as to jeopardize patient care and pose a threat to the public health and safety.  The department shall consider the relative degree of shortages among professions when determining eligibility.  This determination shall be based upon health professional shortage needs identified in the health personnel resource plan authorized by RCW 28B.125.010.  The department may add or remove professions from eligibility based upon the determination that a profession is no longer in shortage as determined by the health personnel resource plan.  Should a profession no longer be eligible, participants or eligible students who have received scholarships shall be eligible to continue to receive scholarships or loan repayments until they are no longer eligible or until their service obligation has been completed;

     (2) Determine health professional shortage areas for each of the eligible credentialed health care professions.

     Sec. 70.  RCW 28B.115.080 and 1993 c 492 s 271 are each amended to read as follows:

     After June 1, 1992, the ((board)) office, in consultation with the department and the department of social and health services, shall:

     (1) Establish the annual award amount for each credentialed health care profession which shall be based upon an assessment of reasonable annual eligible expenses involved in training and education for each credentialed health care profession.  The annual award amount may be established at a level less than annual eligible expenses.  The annual award amount shall be established by the ((board)) office for each eligible health profession.  The awards shall not be paid for more than a maximum of five years per individual;

     (2) Determine any scholarship awards for prospective physicians in such a manner to require the recipients declare an interest in serving in rural areas of the state of Washington.  Preference for scholarships shall be given to students who reside in a rural physician shortage area or a nonshortage rural area of the state prior to admission to the eligible education and training program in medicine.  Highest preference shall be given to students seeking admission who are recommended by sponsoring communities and who declare the intent of serving as a physician in a rural area.  The ((board)) office may require the sponsoring community located in a nonshortage rural area to financially contribute to the eligible expenses of a medical student if the student will serve in the nonshortage rural area;

     (3) Establish the required service obligation for each credentialed health care profession, which shall be no less than three years or no more than five years.  The required service obligation may be based upon the amount of the scholarship or loan repayment award such that higher awards involve longer service obligations on behalf of the participant;

     (4) Determine eligible education and training programs for purposes of the scholarship portion of the program;

     (5) Honor loan repayment and scholarship contract terms negotiated between the higher education coordinating board and participants prior to May 21, 1991, concerning loan repayment and scholarship award amounts and service obligations authorized under chapter 28B.115, 28B.104, or 70.180 RCW.

     Sec. 71.  RCW 28B.115.090 and 1991 c 332 s 22 are each amended to read as follows:

     (1) The ((board)) office may grant loan repayment and scholarship awards to eligible participants from the funds appropriated for this purpose, or from any private or public funds given to the ((board)) office for this purpose.  Participants are ineligible to receive loan repayment if they have received a scholarship from programs authorized under this chapter or chapter 28B.104 or 70.180 RCW or are ineligible to receive a scholarship if they have received loan repayment authorized under this chapter or chapter 18.150 or 28B.115 RCW.

     (2) Funds appropriated for the program, including reasonable administrative costs, may be used by the ((board)) office for the purposes of loan repayments or scholarships.  The ((board)) office shall annually establish the total amount of funding to be awarded for loan repayments and scholarships and such allocations shall be established based upon the best utilization of funding for that year and based upon the health personnel resource plan authorized in RCW 28B.125.010.

     (3) One portion of the funding appropriated for the program shall be used by the ((board)) office as a recruitment incentive for communities participating in the community-based recruitment and retention program as authorized by chapter 70.185 RCW; one portion of the funding shall be used by the ((board)) office as a recruitment incentive for recruitment activities in state-operated institutions, county public health departments and districts, county human service agencies, federal and state contracted community health clinics, and other health care facilities, such as rural hospitals that have been identified by the department, as providing substantial amounts of charity care or publicly subsidized health care; one portion of the funding shall be used by the ((board)) office for all other awards.  The ((board)) office shall determine the amount of total funding to be distributed between the three portions.

     Sec. 72.  RCW 28B.115.100 and 1991 c 332 s 23 are each amended to read as follows:

     In providing health care services the participant shall not discriminate against a person on the basis of the person's ability to pay for such services or because payment for the health care services provided to such persons will be made under the insurance program established under part A or B of Title XVIII of the federal social security act or under a state plan for medical assistance including Title XIX of the federal social security act or under the state medical assistance program authorized by chapter 74.09 RCW and agrees to accept assignment under section 18.42(b)(3)(B)(ii) of the federal social security act for all services for which payment may be made under part B of Title XVIII of the federal social security act and enters into an appropriate agreement with the department of social and health services for medical assistance under Title XIX of the federal social security act to provide services to individuals entitled to medical assistance under the plan and enters into appropriate agreements with the department of social and health services for medical care services under chapter 74.09 RCW.  Participants found by the ((board)) office or the department in violation of this section shall be declared ineligible for receiving assistance under the program authorized by this chapter.

     Sec. 73.  RCW 28B.115.110 and 1991 c 332 s 24 and 1991 c 164 s 8 are each reenacted and amended to read as follows:

     Participants in the health professional loan repayment and scholarship program who are awarded loan repayments shall receive payment from the program for the purpose of repaying educational loans secured while attending a program of health professional training which led to a credential as a credentialed health professional in the state of Washington.

     (1) Participants shall agree to meet the required service obligation in a designated health professional shortage area.

     (2) Repayment shall be limited to eligible educational and living expenses as determined by the ((board)) office and shall include principal and interest.

     (3) Loans from both government and private sources may be repaid by the program.  Participants shall agree to allow the ((board)) office access to loan records and to acquire information from lenders necessary to verify eligibility and to determine payments.  Loans may not be renegotiated with lenders to accelerate repayment.

     (4) Repayment of loans established pursuant to this program shall begin no later than ninety days after the individual has become a participant.  Payments shall be made quarterly, or more frequently if deemed appropriate by the ((board)) office, to the participant until the loan is repaid or the participant becomes ineligible due to discontinued service in a health professional shortage area or after the required service obligation when eligibility discontinues, whichever comes first.

     (5) Should the participant discontinue service in a health professional shortage area payments against the loans of the participants shall cease to be effective on the date that the participant discontinues service.

     (6) Except for circumstances beyond their control, participants who serve less than the required service obligation shall be obligated to repay to the program an amount equal to twice the total amount paid by the program on their behalf in addition to any payments on the unsatisfied portion of the principal and interest.  The ((board)) office shall determine the applicability of this subsection.

     (7) The ((board)) office is responsible for the collection of payments made on behalf of participants from the participants who discontinue service before completion of the required service obligation.  The ((board)) office shall exercise due diligence in such collection, maintaining all necessary records to ensure that the maximum amount of payment made on behalf of the participant is recovered.  Collection under this section shall be pursued using the full extent of the law, including wage garnishment if necessary.

     (8) The ((board)) office shall not be held responsible for any outstanding payments on principal and interest to any lenders once a participant's eligibility expires.

     (9) The ((board)) office shall temporarily or, in special circumstances, permanently defer the requirements of this section for eligible students as defined in RCW 28B.10.017.

     Sec. 74.  RCW 28B.115.120 and 1993 c 423 s 2 are each amended to read as follows:

     (1) Participants in the health professional loan repayment and scholarship program who are awarded scholarships incur an obligation to repay the scholarship, with interest, unless they serve the required service obligation in a health professional shortage area in the state of Washington.

     (2) The interest rate shall be eight percent for the first four years of repayment and ten percent beginning with the fifth year of repayment.

     (3) The period for repayment shall coincide with the required service obligation, with payments of principal and interest accruing quarterly commencing no later than nine months from the date the participant completes or discontinues the course of study or completes or discontinues the required residency.  Provisions for deferral of payment shall be determined by the ((board)) office.

     (4) The entire principal and interest of each payment shall be forgiven for each payment period in which the participant serves in a health professional shortage area until the entire repayment obligation is satisfied or the borrower ceases to so serve.  Should the participant cease to serve in a health professional shortage area of this state before the participant's repayment obligation is completed, payments on the unsatisfied portion of the principal and interest shall begin the next payment period and continue until the remainder of the participant's repayment obligation is satisfied.  Except for circumstances beyond their control, participants who serve less than the required service obligation shall be obliged to repay to the program an amount equal to twice the total amount paid by the program on their behalf.

     (5) The ((board)) office is responsible for collection of repayments made under this section and shall exercise due diligence in such collection, maintaining all necessary records to ensure that maximum repayments are made.  Collection and servicing of repayments under this section shall be pursued using the full extent of the law, including wage garnishment if necessary, and shall be performed by entities approved for such servicing by the Washington student loan guaranty association or its successor agency.  The ((board)) office is responsible to forgive all or parts of such repayments under the criteria established in this section and shall maintain all necessary records of forgiven payments.

     (6) Receipts from the payment of principal or interest or any other subsidies to which the ((board)) office as administrator is entitled, which are paid by or on behalf of participants under this section, shall be deposited with the ((board)) office and shall be used to cover the costs of granting the scholarships, maintaining necessary records, and making collections under subsection (5) of this section.  The ((board)) office shall maintain accurate records of these costs, and all receipts beyond those necessary to pay such costs shall be used to grant scholarships to eligible students.

     (7) Sponsoring communities who financially contribute to the eligible financial expenses of eligible medical students may enter into agreements with the student to require repayment should the student not serve the required service obligation in the community as a primary care physician.  The ((board)) office may develop criteria for the content of such agreements with respect to reasonable provisions and obligations between communities and eligible students.

     (8) The ((board)) office may make exceptions to the conditions for participation and repayment obligations should circumstances beyond the control of individual participants warrant such exceptions.

     Sec. 75.  RCW 28B.115.130 and 1991 c 332 s 28 are each amended to read as follows:

     (1) Any funds appropriated by the legislature for the health professional loan repayment and scholarship program or any other public or private funds intended for loan repayments or scholarships under this program shall be placed in the account created by this section.

     (2) The health professional loan repayment and scholarship program fund is created in custody of the state treasurer.  All receipts from the program shall be deposited into the fund.  Only the ((higher education coordinating board)) office, or its designee, may authorize expenditures from the fund.  The fund is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

     Sec. 76.  RCW 28B.115.140 and 1989 1st ex.s. c 9 s 722 are each amended to read as follows:

     After consulting with the ((higher education coordinating board)) office, the governor may transfer the administration of this program to another agency with an appropriate mission.

     Sec. 77.  RCW 28A.600.120 and 1985 c 370 s 32 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall have the responsibility for administration of the Washington scholars program.  The program will be developed cooperatively with the Washington association of secondary school principals, a voluntary professional association of secondary school principals.  The cooperation of other state agencies and private organizations having interest and responsibility in public and private education shall be sought for planning assistance.

     Sec. 78.  RCW 28A.600.130 and 1995 1st sp.s. c 5 s 1 are each amended to read as follows:

     The ((higher education coordinating board)) office of student assistance shall establish a planning committee to develop criteria for screening and selection of the Washington scholars each year in accordance with RCW 28A.600.110(1).  It is the intent that these criteria shall emphasize scholastic achievement but not exclude such criteria as leadership ability and community contribution in final selection procedures.  The Washington scholars planning committee shall have members from selected state agencies and private organizations having an interest and responsibility in education, including but not limited to, the state board of education, the office of superintendent of public instruction, the council of presidents, the state board for community and technical colleges, and the Washington friends of higher education.

     Sec. 79.  RCW 28A.600.140 and 1990 c 33 s 501 are each amended to read as follows:

     Each year on or before March 1st, the Washington association of secondary school principals shall submit to the ((higher education coordinating board)) office of student assistance the names of graduating senior high school students who have been identified and recommended to be outstanding in academic achievement by their school principals based on criteria to be established under RCW 28A.600.130.

     Sec. 80.  RCW 28A.600.150 and 1985 c 370 s 35 are each amended to read as follows:

     Washington scholars annually shall be selected from among the students so identified.  The ((higher education coordinating board)) office of student assistance shall notify the students so designated, their high school principals, the legislators of their respective districts, and the governor when final selections have been made.

     The ((board)) office of student assistance, in conjunction with the governor's office, shall prepare appropriate certificates to be presented to the Washington scholars recipients.  An awards ceremony at an appropriate time and place shall be planned by the ((board)) office of student assistance in cooperation with the Washington association of secondary school principals, and with the approval of the governor.

NEW SECTION. Sec. 81.  RCW 28B.80.240, 28B.80.245, 28B.80.246, and 28B.80.360 are each recodified as new sections in chapter 28B.--- RCW (sections 1 through 9 of this act).

NEW SECTION. Sec. 82.  Sections 1 through 9 of this act constitute a new chapter in Title 28B RCW.

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