S-4613

AN ACT Relating to the future teachers conditional scholarships for classified employees and other future teachers; amending RCW 28B.102.010, 28B.102.020, 28B.102.030, 28B.102.040, 28B.102.050, and 28B.102.060; reenacting and amending RCW 43.79A.040; and adding a new section to chapter 28B.102 RCW.

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

Sec. 1. RCW 28B.102.010 and 1987 c 437 s 1 are each amended to read as follows:

The legislature finds that encouraging outstanding students and classified employees to enter the teaching profession is of paramount importance to the state of Washington. By creating the future teachers conditional scholarship program, the legislature intends to assist in the effort to recruit as future teachers, students who have distinguished themselves through outstanding academic achievement, individuals who have demonstrated their commitment to children and education as classified employees, and ((~~students~~)) individuals who can act as role models for children ((~~including those from targeted ethnic minorities~~)). The legislature urges business, industry, and philanthropic community organizations to join with state government in making this program successful.

Sec. 2. 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.

(4) "Classified employee" means an employee of a school district or educational service district who does not hold a Washington teaching certificate.

(5) "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)~~)) (6) "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)~~)) (7) "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)~~)) (8) "Satisfied" means paid-in-full.

((~~(8)~~)) (9) "Participant" means an eligible student or classified employee who has received a conditional scholarship under this chapter.

((~~(9) "Targeted ethnic minority"~~)) (10) "Historically underrepresented populations" means ((a)) groups of Americans ((~~with a common ethnic or racial heritage selected~~)) identified by the board ((~~for program consideration due to societal concerns such as high dropout rates or low rates of college participation by members of the group~~)) because their participation in college has been significantly lower than their representation in the overall population.

((~~(10)~~)) (11) "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;

(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.

(12) "Equalization charge" means the additional amount added to the principle of the loan in order to equate the debt to that which the participant would have incurred if the loan had been received through the federal subsidized Stafford student loan program. The equalization charge is only applied to those participants who fail to satisfy their teaching obligation and are required to repay all or part of the conditional scholarship.

(13) "Teacher shortage area" means an area where there is a shortage of preschool, elementary, or secondary school teachers and can be designated in a specific subject matter, discipline classification, or geographic area as identified by the office of superintendent of public instruction.

Sec. 3. 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 include scholarships for eligible students and classified employees. The program shall be administered by the higher education coordinating board. In administering the program, the board shall have the following powers and duties:

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

(2) Adopt necessary rules and guidelines;

(3) Publicize the program, including special efforts to recruit historically underrepresented populations to apply for the program;

(4) Collect and manage repayments from ((~~students~~)) participants 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. 4. RCW 28B.102.040 and 1987 c 437 s 4 are each amended to read as follows:

The higher education coordinating board 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. 5. RCW 28B.102.050 and 1987 c 437 s 5 are each amended to read as follows:

The board may award conditional scholarships to classified employees and eligible students from the funds appropriated to the board for this purpose, or from any private donations, or any other funds given to the board for this program. The amount of the conditional scholarship awarded an individual shall not exceed ((~~three thousand dollars per academic year~~)) four thousand dollars in the 2000-01 academic year. The board may adjust the annual award by the rate of undergraduate, resident tuition increases at the public four-year research universities. ((~~Students~~)) Participants are eligible to receive conditional scholarships for a maximum of five years.

Sec. 6. 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 and with an equalization charge, unless they teach for two years in an approved education program for each year of scholarship received, under rules adopted by the board. Participants who teach in a designated teacher shortage area shall have one year of loan forgiven for each year they teach in the shortage area.

(2) The interest rate on new loans shall be ((~~eight percent for the first four years of repayment and ten percent beginning with the fifth year of repayment~~)) determined annually by the board. The annual interest rate should generally parallel the current rate for new loans in the primary federal student loan program for undergraduate students. Participants who fail to complete the teaching service shall incur an equalization charge of not more than three percent of the remaining unforgiven balance. The equalization charge shall be added to the remaining balance and repaid by the participant.

(3) The minimum payment shall be set by the board, but shall not be less than fifty dollars per month. The maximum 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.

(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 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 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 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 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 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 classified employees and eligible students.

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

(8) The board 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.

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

NEW SECTION. Sec. 7. A new section is added to chapter 28B.102 RCW to read as follows:

The future teachers conditional scholarship account is created in the custody of the state treasurer. All receipts from moneys appropriated from the legislature for the future teachers conditional scholarship program, private contributions to the program, and receipts from participant repayments must be deposited into the account. Expenditures from the account may be used only for conditional loans to participants and for the board's administrative costs associated with the awarding, tracking, and collection of the loans. Only the executive director of the higher education coordinating board or the executive director's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures. With the exception of operating costs associated with the management of the account by the treasurer's office as authorized in chapter 43.79A RCW, the account shall be credited with all investment income earned by the account.

Sec. 8. RCW 43.79A.040 and 1999 c 384 s 8 and 1999 c 182 s 2 are each reenacted and amended to read as follows:

(1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.

(2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.

(3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.

(b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The future teachers conditional scholarship account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility grant account, the self-insurance revolving fund, the sulfur dioxide abatement account, and the children's trust fund. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.