BILL REQ. #:  S-2388.7 

Read first time 04/05/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to higher education funding and performance; amending RCW 28B.15.067, 28B.15.068, 28B.76.270, and 28B.76.200; adding new sections to chapter 28B.15 RCW; adding a new section to chapter 28B.76 RCW; adding a new section to chapter 28B.10 RCW; adding a new section to chapter 28B.50 RCW; creating a new section; and repealing RCW 28B.10.920, 28B.10.921, and 28B.10.922.

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

NEW SECTION.  Sec. 1   Washington is successful because of its people whose social and economic well-being depends upon the availability and quality of their education. The legislature finds that, even during these financially challenging times, Washington colleges and universities provide high quality educational experiences for their students and produce graduates well prepared to fuel Washington's economy and society. Postsecondary funding, however, has been cut to the point that the future vitality and production capacity of Washington's institutions of higher education is at risk unless bold actions are taken.
     The legislature finds that, unlike reductions for other state services that can recover quickly as the economy recovers, budget reductions in higher education have long-lasting adverse effects on Washington citizens, the economy, and society - effects that the state must minimize. For these reasons, the legislature finds that immediate actions must be taken to preserve the excellent quality of education that students receive at Washington's institutions of higher education and the availability of educational opportunities for a broad spectrum of Washington students.
     The legislature intends to buffer the economic challenges experienced by Washington colleges and universities by permitting them to establish their tuition rates institutionally while holding them accountable for their performance on specific outcomes, including quality and quantity measures. The legislature intends to require continuing achievement of these progressively challenging outcomes to justify continuing institutional autonomy.
     The legislature further intends that the effects of the tuition increases be mitigated for middle-class and needy students by preserving its commitment to state and institutional funding for need-based financial aid.

Sec. 2   RCW 28B.15.067 and 2010 c 20 s 7 are each amended to read as follows:
     (1) Tuition fees shall be established under the provisions of this chapter.
     (2) Beginning with the 2003-04 academic year and ending with the 2012-13 academic year, reductions or increases in full-time tuition fees for resident undergraduates shall be as provided in the omnibus appropriations act. Beginning in the 2013-14 academic year, reductions or increases in full-time tuition fees shall be as provided in the omnibus appropriations act for resident undergraduate students at community and technical colleges. The state board for community and technical colleges may pilot or institute differential tuition models. The board may define scale, scope, and rationale for the models.
     (3)(a) Beginning with the ((2003-04)) 2013-14 academic year and ((ending with the 2012-13)) through the end of the 2018-19 academic year, the governing boards of the state universities, the regional universities, and The Evergreen State College((, and the state board for community and technical colleges)) may reduce or increase full-time tuition fees for all students ((other than resident undergraduates)), including summer school students and students in other self-supporting degree programs. Percentage increases in full-time tuition fees may exceed the fiscal growth factor. Reductions or increases may be made, and differential tuition rates may be charged, for all or portions of an institution's programs, campuses, courses, or students. This subsection (3)(a) applies to the state board for community and technical colleges for all nonresident students, summer school students, and students in other self-supporting programs.
     (b) Prior to reducing or increasing tuition for each academic year, the governing boards of the state universities, the regional universities, and The Evergreen State College shall consult with existing student associations or organizations with student undergraduate and graduate representatives regarding the impacts of potential tuition increases. Governing boards shall be required to provide data regarding the percentage of students receiving financial aid, the sources of aid, and the percentage of total costs of attendance paid for by aid.
     (c) Prior to reducing or increasing tuition for each academic year, each college in the state board for community and technical college system shall consult with existing student associations or organizations with undergraduate student representation regarding the impacts of potential tuition increases. Colleges shall provide data regarding the percentage of students receiving financial aid, the sources of aid, and the percentage of total costs of attendance paid for by aid.
     (4) ((Academic year tuition for full-time students at the state's institutions of higher education beginning with 2015-16, other than summer term, shall be as charged during the 2014-15 academic year unless different rates are adopted by the legislature)) Beginning with the 2019-20 academic year, reductions or increases in full-time tuition fees shall be as provided in the omnibus appropriations act for resident undergraduate students at four-year institutions of higher education.
     (5) The tuition fees established under this chapter shall not apply to high school students enrolling in participating institutions of higher education under RCW 28A.600.300 through 28A.600.400.
     (6) The tuition fees established under this chapter shall not apply to eligible students enrolling in a dropout reengagement program through an interlocal agreement between a school district and a community or technical college under RCW 28A.175.100 through 28A.175.110.
     (7) The tuition fees established under this chapter shall not apply to eligible students enrolling in a community or technical college participating in the pilot program under RCW 28B.50.534 for the purpose of obtaining a high school diploma.
     (((8) For the academic years 2003-04 through 2008-09, the University of Washington shall use an amount equivalent to ten percent of all revenues received as a result of law school tuition increases beginning in academic year 2000-01 through academic year 2008-09 to assist needy low and middle-income resident law students.
     (9) For the academic years 2003-04 through 2008-09, institutions of higher education shall use an amount equivalent to ten percent of all revenues received as a result of graduate academic school tuition increases beginning in academic year 2003-04 through academic year 2008-09 to assist needy low and middle-income resident graduate academic students.
     (10) Any tuition increases above seven percent shall fund costs of instruction, library and student services, utilities and maintenance, other costs related to instruction as well as institutional financial aid. Through 2010-11, any funding reductions to instruction, library and student services, utilities and maintenance and other costs related to instruction shall be proportionally less than other program areas including administration.))

NEW SECTION.  Sec. 3   A new section is added to chapter 28B.15 RCW to read as follows:
     (1) Beginning in the 2013-14 academic year, each four-year institution of higher education that raises tuition levels beyond levels established in subsection (3) of this section shall provide financial aid for the express purpose of eliminating the effects of tuition increases above those specified in subsection (3)(a) and (b) of this section on students with incomes below one hundred twenty-five percent of the median family income. Financial aid sources and methods may be:
     (a) Tuition revenue or locally held funds;
     (b) Tuition waivers created by a four-year institution of higher education for the specific purpose of serving middle class students; or
     (c) Local financial aid programs.
     (2) By January 1, 2014, four-year institutions of higher education shall report to the governor and relevant committees of the legislature on the effectiveness of financial aid programs in mitigating tuition increases.
     (3) Subsection (1) of this section applies when tuition levels are raised above:
     (a) For the University of Washington, Washington State University, and Western Washington University, eleven percent per year; and
     (b) For The Evergreen State College, Central Washington University, and Eastern Washington University, nine percent per year.

Sec. 4   RCW 28B.15.068 and 2009 c 540 s 1 are each amended to read as follows:
     (1) ((Beginning with the 2007-08 academic year and ending with the 2016-17 academic year)) Except during the 2011-2013 through 2017-2019 biennia, tuition fees charged to full-time resident undergraduate students((, except in academic years 2009-10 and 2010-11, may increase no greater than seven percent over the previous academic year in any institution of higher education. Annual reductions or increases in full-time tuition fees for resident undergraduate students)) shall be as provided in the omnibus appropriations act((, within the seven percent increase limit established in this section. For academic years 2009-10 and 2010-11 the omnibus appropriations act may provide tuition increases greater than seven percent)). To the extent that state appropriations combined with tuition and fee revenues are insufficient to achieve the total per-student funding goals established in subsection (2) of this section, the legislature may revisit state appropriations, authorized enrollment levels, and changes in tuition fees for any given fiscal year.
     (2) The state shall adopt as its goal total per-student funding levels, from state appropriations plus tuition and fees, of at least the sixtieth percentile of total per-student funding at similar public institutions of higher education in the global challenge states. In defining comparable per-student funding levels, the office of financial management shall adjust for regional cost-of-living differences; for differences in program offerings and in the relative mix of lower division, upper division, and graduate students; and for accounting and reporting differences among the comparison institutions. The office of financial management shall develop a funding trajectory for each four-year institution of higher education and for the community and technical college system as a whole that when combined with tuition and fees revenue allows the state to achieve its funding goal for each four-year institution and the community and technical college system as a whole no later than fiscal year 2017. ((The state shall not reduce enrollment levels below fiscal year 2007 budgeted levels in order to improve or alter the per-student funding amount at any four-year institution of higher education or the community and technical college system as a whole.)) The state recognizes that each four-year institution of higher education and the community and technical college system as a whole have different funding requirements to achieve desired performance levels, and that increases to the total per-student funding amount may need to exceed the minimum funding goal.
     (3) By September 1st of each year beginning in 2008, the office of financial management shall report to the governor, the higher education coordinating board, and appropriate committees of the legislature with updated estimates of the total per-student funding level that represents the sixtieth percentile of funding for comparable institutions of higher education in the global challenge states, and the progress toward that goal that was made for each of the public institutions of higher education.
     (4) As used in this section, "global challenge states" are the top performing states on the new economy index published by the progressive policy institute as of July 22, 2007. The new economy index ranks states on indicators of their potential to compete in the new economy. At least once every five years, the office of financial management shall determine if changes to the list of global challenge states are appropriate. The office of financial management shall report its findings to the governor and the legislature.
     (5) ((During the 2009-10 and the 2010-11 academic years,)) The institutions of higher education shall include information on their billing statements notifying students of available federal tax credits ((available through the American opportunity tax credit provided in the American recovery and reinvestment act of 2009)).

Sec. 5   RCW 28B.76.270 and 2004 c 275 s 11 are each amended to read as follows:
     (1) The board shall establish an accountability monitoring and reporting system as part of a continuing effort to make meaningful and substantial progress towards the achievement of long-term performance goals in higher education.
     (2) To provide consistent, easily understood data among the public four-year institutions of higher education within Washington and in other states, the following data must be reported annually and at a minimum include data recommended by a national organization representing state chief executives. This data must include the following for the four-year institutions of higher education and the board may change the data requirements to be consistent with best practices across the country:
     (a) Bachelor's degrees awarded;
     (b) Graduate and professional degrees awarded;
     (c) Graduation rates: The number and percentage of students who graduate within four years for bachelor's degrees and within the extended time, which is six years for bachelor's degrees;
     (d) Transfer rates: The annual number and percentage of students who transfer from a two-year to a four-year institution of higher education;
     (e) Time and credits to degree: The average length of time in years and average number of credits that graduating students took to earn a bachelor's degree;
     (f) Enrollment in remedial education: The number and percentage of entering first-time undergraduate students who place into and enroll in remedial mathematics, English, or both;
     (g) Success beyond remedial education: The number and percentage of entering first-time undergraduate students who complete entry college-level math and English courses within the first two consecutive academic years;
     (h) Credit accumulation: The number and percentage of first-time undergraduate students completing two quarters or one semester worth of credit during their first academic year;
     (i) Retention rates: The number and percentage of entering undergraduate students who enroll consecutively from fall-to-spring and fall-to-fall at an institution of higher education;
     (j) Course completion: The percentage of credit hours completed out of those attempted during an academic year;
     (k) Program participation and degree completion rates in bachelor and advanced degree programs in the sciences, which includes the health sciences, natural resources, environment, conservation, biology, life sciences, and other applied and interdisciplinary sciences, technology, engineering, and mathematics disciplines, and other high demand and critical state need areas, including participation and degree completion rates for students from traditionally underrepresented populations;
     (l) Annual unduplicated number of students enrolled over a twelve-month period at institutions of higher education;
     (m) Annual ratio of undergraduate degrees and certificates of at least one year in expected length awarded per one hundred full-time equivalent undergraduate students at the state level; and
     (n) Annual ratio of undergraduate degrees and certificates, of at least one year in program length, awarded relative to the state's population age eighteen to twenty-four years old with a high school diploma.
     (3) Four-year institutions of higher education must count all students when collecting data, not only first-time, full-time freshmen.
     (4) Based on guidelines prepared by the board, ((each four-year institution and)) the state board for community and technical colleges shall submit a biennial plan to achieve measurable and specific improvements each academic year on statewide ((and institution-specific)) performance measures. Plans shall be submitted to the board along with the biennial budget requests from ((the institutions and)) the state board for community and technical colleges. Performance measures established for the community and technical colleges shall reflect the role and mission of the colleges.
     (((3))) (5) The board shall approve biennial performance targets ((for each four-year institution and)) for the community and technical college system and shall review actual achievements annually. The state board for community and technical colleges shall set biennial performance targets for each college or district, where appropriate.
     (((4))) (6) For the community and technical college system, the board shall submit a report on progress towards the statewide goals, with recommendations for the ensuing biennium, to the fiscal and higher education committees of the legislature along with the board's biennial budget recommendations.
     (((5))) (7) For the four-year institutions, the board shall submit a report on progress toward degree completion goals and on comparisons with other states for the measures listed in subsection (2) of this section, with recommendations for the ensuing biennium, to the fiscal and higher education committees of the legislature along with the board's biennial budget recommendation.
     (8) The board, in collaboration with the four-year institutions and the state board for community and technical colleges, shall periodically review and update the accountability monitoring and reporting system.
     (((6))) (9) The board shall develop measurable indicators and benchmarks for its own performance regarding cost, quantity, quality, and timeliness and including the performance of committees and advisory groups convened under this chapter to accomplish such tasks as improving transfer and articulation, improving articulation with the K-12 education system, measuring educational costs, or developing data protocols. The board shall submit its accountability plan to the legislature concurrently with the biennial report on institution progress.

Sec. 6   RCW 28B.76.200 and 2007 c 458 s 201 are each amended to read as follows:
     (1) The board shall develop a statewide strategic master plan for higher education that proposes a vision and identifies measurable goals and priorities for the system of higher education in Washington state for a ten-year time period. The board shall update the statewide strategic master plan every four years. The plan shall address the goals of: (a) Expanding access; (b) using methods of educational delivery that are efficient, cost-effective, and productive to deliver modern educational programs; and (c) using performance measures to gauge the effectiveness of the state's progress towards meeting its higher education goals. The plan shall encompass all sectors of higher education, including the two-year system, workforce training, the four-year institutions, and financial aid. The board shall also specify strategies for expanding access, affordability, quality, efficiency, and accountability among the various institutions of higher education.
     (2) In developing the statewide strategic master plan for higher education, the board shall collaborate with the four-year institutions of higher education including the council of presidents, the community and technical college system, and, when appropriate, the workforce training and education coordinating board, the superintendent of public instruction, the independent higher education institutions, the business sector, and labor. The board shall identify and utilize models of regional planning and decision making before initiating a statewide planning process. The board shall also seek input from students, faculty organizations, community and business leaders in the state, members of the legislature, and the governor.
     (3) As a foundation for the statewide strategic master plan for higher education, the board shall review role and mission statements for each of the four-year institutions of higher education and the community and technical college system. The purpose of the review is to ensure institutional roles and missions are aligned with the overall state vision and priorities for higher education.
     (4) In assessing needs of the state's higher education system, the board should encourage partnerships, embrace innovation, and consider, analyze, and make recommendations concerning the following information:
     (a) Demographic, social, economic, and technological trends and their impact on service delivery for a twenty-year horizon;
     (b) The changing ethnic composition of the population and the special needs arising from those trends;
     (c) Business and industrial needs for a skilled workforce;
     (d) College attendance, retention, transfer, graduation, and dropout rates;
     (e) Needs and demands for basic and continuing education and opportunities for lifelong learning by individuals of all age groups;
     (f) Needs and demands for nontraditional populations including, but not limited to, adult learners; and
     (g) Needs and demands for access to higher education by placebound students and individuals in heavily populated areas underserved by public institutions.
     (5) The statewide strategic master plan for higher education shall include, but not be limited to, the following access and educational delivery items:
     (a) Recommendations based on enrollment forecasts and analysis of data about demand for higher education, and policies and actions to meet the goal of expanding access;
     (b) State and regional priorities for new or expanded degree programs or off-campus programs, including what models of service delivery may be most cost-effective;
     (c) Recommended policies or actions to improve the efficiency of student transfer and graduation or completion;
     (d) State and regional priorities for addressing needs in high-demand fields where enrollment access is limited and employers are experiencing difficulty finding enough qualified graduates to fill job openings;
     (e) Recommended tuition and fees policies and levels; and
     (f) Priorities and recommendations including increased transparency on financial aid.
     (6) The board shall present the vision, goals, priorities, and strategies in the statewide strategic master plan for higher education in a way that provides guidance for institutions, the governor, and the legislature to make further decisions regarding institution-level plans, policies, legislation, and operating and capital funding for higher education. In the statewide strategic master plan for higher education, the board shall recommend specific actions to be taken and identify measurable performance indicators and benchmarks for gauging progress toward achieving the goals and priorities.
     (7) Every four years by December 15th, beginning December 15, 2007, the board shall submit an update of the ten-year statewide strategic master plan for higher education to the governor and the legislature. The updated plan shall reflect the expectations and policy directions of the legislative higher education and fiscal committees, and shall provide a timely and relevant framework for the development of future budgets and policy proposals. The legislature shall, by concurrent resolution, approve or recommend changes to the updated plan, following public hearings. The board shall submit the final plan, incorporating legislative changes, to the governor and the legislature by June of the year in which the legislature approves the concurrent resolution. The plan shall then become state higher education policy unless legislation is enacted to alter the policies set forth in the plan. The board shall report annually to the governor and the legislature on the progress being made by the institutions of higher education and the state to implement the strategic master plan.
     (8)(a) The master plan updated in 2011 shall include a plan for achieving the following initial degree completion targets by 2018:
     (i) Increasing the number of bachelor's degrees earned by Washington's resident students from the 2010 levels by at least six thousand degrees completed or by twenty-seven percent;
     (ii) Consistent with the priority for increasing the number of enrollments and degrees in the fields of engineering, technology, biotechnology, sciences, computer sciences, and mathematics, at least two thousand of the additional degrees in (a)(i) of this subsection would be awarded in the areas of science, which includes the health sciences, technology, engineering, and mathematics; and
     (iii) Attaining parity in degree attainment for students from underrepresented groups, which would mean that at least nineteen percent of the degrees awarded would include students who are low income or are the first in their families to attend college.
     (b) The bachelor degree completion targets in (a)(i) of this subsection shall be updated by the higher education coordinating board by September 1, 2012, and by September 1st every two years thereafter based upon the state's changing population and economic needs. Targets shall be set for five-year periods following the 2018 target.
     (9) Each four-year institution shall develop an institution-level ten-year strategic plan that implements the vision, goals, priorities, and strategies within the statewide strategic master plan for higher education based on the institution's role and mission. Institutional strategic plans shall encourage partnerships, embrace innovation, and contain measurable performance indicators and benchmarks for gauging progress toward achieving the goals and priorities with attention given to the goals and strategies of increased access and program delivery methods. The board shall review the institution-level plans to ensure the plans are aligned with and implement the statewide strategic master plan for higher education and shall periodically monitor institutions' progress toward achieving the goals and priorities within their plans.
     (((9))) (10) The board shall also review the comprehensive master plan prepared by the state board for community and technical colleges for the community and technical college system under RCW 28B.50.090 to ensure the plan is aligned with and implements the statewide strategic master plan for higher education.

NEW SECTION.  Sec. 7   A new section is added to chapter 28B.15 RCW to read as follows:
     (1) To ensure institutional quality, promote access, and advance the public mission of public four-year institutions of higher education, the authority to increase or decrease tuition rates shall be considered within the context of performance-based measures and goals for each state university, regional university, and The Evergreen State College. By September 1, 2013, and September 1st every two years thereafter, the state universities, the regional universities, and The Evergreen State College shall each negotiate an institutional performance contract with the higher education coordinating board and the office of financial management that includes expected outcomes that must be achieved by each institution in the following biennium and that includes a method for rewarding performance improvement beyond expected outcomes in accordance with the baccalaureate degree incentive program established in section 8 of this act. At a minimum, an individual institutional performance contract shall include:
     (a) Expected outcomes concerning time and credits to degree;
     (b) Expected outcomes concerning retention and success of students from low-income, diverse, or underrepresented communities;
     (c) Expected outcomes concerning bachelor degree production for resident students;
     (d) Expected outcomes concerning degree production in high demand and critical state need areas;
     (e) Expected outcomes that maintain the proportion of resident undergraduate students to the total student population; and
     (f) Expected outcomes concerning number of students enrolled.
     (2) If performance contracts are not completed as specified in subsection (1) of this section or if, at the conclusion of a biennium, any state university, regional university, or The Evergreen State College does not achieve the expected outcomes established in the performance contracts, in the following biennium that university's or college's tuition may not, without prior legislative approval, be increased more than the increase specified in section 3(3) (a) and (b) of this act.

NEW SECTION.  Sec. 8   A new section is added to chapter 28B.76 RCW to read as follows:
     The board shall establish a baccalaureate degree incentive program. To the extent funds are available to the board for this purpose, awards shall be made beginning with the 2013-2014 fiscal year. The board, in collaboration with the institutions, the council of presidents, and the education data center, shall design the program to provide awards for four-year institutions of higher education based upon each institution's individual performance improvement on a set of measures. At a minimum, measures must initially include:
     (1) Time and credits to degree;
     (2) Retention and success of students from low-income, diverse, or underrepresented communities;
     (3) Bachelor degree production for resident students; and
     (4) Degree production in high demand and critical state need areas.

NEW SECTION.  Sec. 9   A new section is added to chapter 28B.10 RCW to read as follows:
     (1) A graduate of a community or technical college in this state who has earned a transferrable associate of arts or sciences degree when admitted to a four-year institution of higher education shall have junior standing and shall be deemed to have met the lower division general education requirements of that institution.
     (2) A student who has earned the equivalent of ninety quarter credit hours and has completed the general education requirements at that four-year institution of higher education in Washington when admitted to another four-year institution of higher education shall have junior standing and shall be deemed to have met the lower division general education requirements of the institution to which the student transfers.
     (3) The community and technical colleges, jointly with the four-year institutions of higher education, must develop a list of academic courses that are equivalent to one-year's worth of general education credit and that would transfer for that purpose to any other two or four-year institution of higher education. If a student completes one- year's worth of general education credits, that student may be issued a one-year academic completion certificate. This certificate shall be accepted at any transferring two or four-year institution of higher education.
     (4) Each institution of higher education must develop a minimum of one degree within the arts and sciences disciplines that can be completed within the equivalent of ninety quarter upper division credits by any student who enters an institution of higher education with junior status and lower division general education requirements completed.
     (5) Each four-year institution of higher education must publish a list of recommended courses for each academic major designed to help students who are planning to transfer design their course of study.
     (6) The requirement to publish a list of academic courses under this section does not apply if an institution does not require courses or majors to meet specific requirements but generally applies credits earned toward degree requirements.

NEW SECTION.  Sec. 10   A new section is added to chapter 28B.50 RCW to read as follows:
     (1)(a) Community and technical colleges must identify and publish in their admissions materials the college level courses that are recognized by all four-year institutions of higher education as transferring to the four-year institutions of higher education. Publication of the list of courses must be easily identified and accessible on the college's web site.
     (b) If a four-year institution of higher education does not require courses of major for transfer, the community and technical colleges must identify and publish the transfer policy of the institution in their admissions materials and make the transfer policy of the institution easily identifiable on the college's web site.
     (2) Community and technical colleges must create a list of courses that satisfy the basic requirements, distribution requirements, and approved electives for:
     (a) A one-year academic completion certificate as provided for under section 9 of this act; and
     (b) A transferrable associate of arts or sciences degree as provided for under section 9 of this act.
     (3) To the extent possible, each community and technical college must develop links between the lists in subsections (1) and (2) of this section and its list of courses, and develop methods to encourage students to check the lists in subsections (1) and (2) of this section when the students are registering for courses.

NEW SECTION.  Sec. 11   The following acts or parts of acts are each repealed:
     (1) RCW 28B.10.920 (Performance agreements--Generally) and 2008 c 160 s 2;
     (2) RCW 28B.10.921 (Performance agreements -- Contents) and 2008 c 160 s 3; and
     (3) RCW 28B.10.922 (Performance agreements -- State committee--Development of final proposals -- Implementation -- Updates) and 2008 c 160 s 4.