Higher education funding

AN ACT Relating to higher education funding; amending RCW 1
28B.92.205 and 28B.15.067; and reenacting and amending RCW 82.04.299.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 82.04.299 and 2025 c 420 s 301 and 2025 c 401 s 5 4
are each reenacted and amended to read as follows: 5
(1)(a) Beginning with business activities occurring on or after 6
April 1, 2020, in addition to the taxes imposed under RCW 82.04.290 7
(2) and (4), a workforce education investment surcharge is imposed on 8
select advanced computing businesses. 9
(i) Beginning April 1, 2020, through December 31, 2025, the 10
surcharge is equal to the gross income of the business subject to the 11
tax under RCW 82.04.290 (2) and (4), multiplied by the rate of 1.22 12
percent. 13
(ii) Beginning January 1, 2026, the surcharge is equal to the 14
gross income of the business subject to the tax under RCW 15
82.04.290(2), multiplied by the rate of 7.5 percent.16
(b) ((Except as provided in (e) of this subsection (1), in no 17
case will the combined surcharge imposed under this subsection (1) 18
paid by all members of an affiliated group be more than $75,000,000 19
annually.20
H-2468.1
HOUSE BILL 2098
State of Washington 69th Legislature 2026 Regular Session
By Representatives Reed, Parshley, Hill, Thomas, Ryu, Zahn, Pollet,
Ramel, Doglio, Berry, Mena, Obras, Scott, Cortes, Street, Gregerson,
Thai, Macri, and Fosse
Prefiled 12/04/25. Read first time 01/12/26. Referred to Committee
on Postsecondary Education & Workforce.
p. 1 HB 2098
(c))) For persons subject to the surcharge imposed under this 1
subsection (1) that report under one or more tax classifications, the 2
surcharge applies only to business activities taxed under RCW 3
82.04.290 (2) and (4). 4
(((d))) (c) The surcharge imposed under this subsection (1) must 5
be reported and paid on a quarterly basis in a manner as required by 6
the department. Returns and amounts payable under this subsection (1) 7
are due by the last day of the month immediately following the end of 8
the reporting period covered by the return. All other taxes must be 9
reported and paid as required under RCW 82.32.045.10
(((e))) (d)(i) To aid in the effective administration of the 11
surcharge in this subsection (1), the department may require persons 12
believed to be engaging in advanced computing or affiliated with a 13
person believed to be engaging in advanced computing to disclose 14
whether they are a member of an affiliated group and, if so, to 15
identify all other members of the affiliated group subject to the 16
surcharge. 17
(ii) If the department establishes, by clear, cogent, and 18
convincing evidence, that one or more members of an affiliated group, 19
with intent to evade the surcharge under this subsection (1), failed 20
to fully comply with this subsection (1)(((e))) (d), the department 21
must assess against that person, or those persons collectively, a 22
penalty equal to 50 percent of the amount of the total surcharge 23
payable by all members of that affiliated group for the calendar year 24
during which the person or persons failed to fully comply with this 25
subsection (1)(((e))) (d). The penalty under this subsection (1)26
(((e))) (d) is in lieu of and not in addition to the evasion penalty 27
under RCW 82.32.090(7). 28
(((f))) (e) For the purposes of this subsection (1) the following 29
definitions apply: 30
(i) "Advanced computing" means designing or developing computer 31
software or computer hardware, whether directly or contracting with 32
another person, including: Modifications to computer software or 33
computer hardware; cloud computing services; or operating as a 34
marketplace facilitator as defined by RCW 82.08.0531, an online 35
search engine, or online social networking platform;36
(ii) "Affiliate" and "affiliated" means a person that directly or 37
indirectly, through one or more intermediaries, controls, is 38
controlled by, or is under common control with another person;39
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(iii) "Affiliated group" means a group of two or more persons 1
that are affiliated with each other; 2
(iv) "Cloud computing services" means on-demand delivery of 3
computing resources, such as networks, servers, storage, 4
applications, and services, over the internet; 5
(v) "Control" means the possession, directly or indirectly, of 6
more than 50 percent of the power to direct or cause the direction of 7
the management and policies of a person, whether through the 8
ownership of voting shares, by contract, or otherwise; and9
(vi) "Select advanced computing business" means a person who is a 10
member of an affiliated group with at least one member of the 11
affiliated group engaging in the business of advanced computing, and 12
the affiliated group has worldwide gross revenue of more than 13
$25,000,000,000 during the immediately preceding calendar year. A 14
person who is primarily engaged within this state in the provision of 15
commercial mobile service, as that term is defined in 47 U.S.C. Sec. 16
332(d)(1), shall not be considered a select advanced computing 17
business. A person who is primarily engaged in this state in the 18
operation and provision of access to transmission facilities and 19
infrastructure that the person owns or leases for the transmission of 20
voice, data, text, sound, and video using wired telecommunications 21
networks shall not be considered a select advanced computing 22
business. A person that is primarily engaged in business as a 23
"financial institution" as defined in RCW 82.04.29004, as that 24
section existed on January 1, 2020, shall not be considered a select 25
advanced computing business. For purposes of this subsection (1)26
(((f))) (e)(vi), "primarily" is determined based on gross income of 27
the business. 28
(2)(a) The workforce education investment surcharge under this 29
section does not apply to: 30
(i) Any hospital as defined in RCW 70.41.020, including any 31
hospital that comes within the scope of chapter 71.12 RCW if the 32
hospital is also licensed under chapter 70.41 RCW; or33
(ii) A provider clinic offering primary care, multispecialty and 34
surgical services, including behavioral health services, and any 35
affiliate of the provider clinic if the affiliate is an organization 36
that offers health care services or provides administrative support 37
for a provider clinic, or is an independent practice association or 38
accountable care organization. 39
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(b) The exemptions under this subsection (2) do not apply to 1
amounts received by any member of an affiliated group other than the 2
businesses described in (a) of this subsection. 3
(c) For purposes of the exemption in (a)(ii) of this subsection:4
(i) "Health care services" means services offered by health care 5
providers relating to the prevention, cure, or treatment of illness, 6
injury, or disease. 7
(ii) "Primary care" means wellness and prevention services and 8
the diagnosis and treatment of health conditions. 9
(3) Revenues from the surcharge under this section must be 10
deposited directly into the workforce education investment account 11
established in RCW 43.79.195. 12
(4) Beginning in fiscal year 2028, and each year thereafter, when 13
the number of qualified Washington state applicants exceeds the 14
available enrollments by 100 at computer science engineering degree 15
programs in four-year state universities, then a commensurate number 16
of computer science and engineering degree enrollments at those state 17
universities must be automatically added and funded for the surcharge 18
imposed under this section to accommodate the additional demand.19
(5) The department has the authority to determine through an 20
audit or other investigation whether a person is subject to the 21
surcharge imposed in this section. 22
Sec. 2. RCW 28B.92.205 and 2025 c 395 s 3 are each amended to 23
read as follows: 24
In addition to other eligibility requirements outlined in this 25
chapter, students who demonstrate financial need are eligible to 26
receive the Washington college grant. Beginning with the ((2025-26)) 27
2026-27 academic year, students with family incomes between zero and 28
((60)) 100 percent of the state median family income, adjusted for 29
family size, shall receive the maximum Washington college grant as 30
defined in RCW 28B.92.030. Grants for students with incomes between 31
((61)) 101 and ((100)) 150 percent of the state median family income, 32
adjusted for family size, shall be prorated at the following 33
percentages of the maximum Washington college grant amount:34
(1) 70 percent for students with family incomes between 101 and 35
110 percent of the state median family income;36
(2) 60 percent for students with family incomes between ((61)) 37
111 and ((65)) 120 percent of the state median family income;38
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(((2))) (3) 50 percent for students with family incomes between 1
((66)) 121 and ((70)) 130 percent of the state median family income;2
(((3))) (4) 24.5 percent for students with family incomes between 3
((71)) 131 and ((75)) 140 percent of the state median family income; 4
and 5
(((4))) (5) 10 percent for students with family incomes between 6
((76)) 141 and ((100)) 150 percent of the state median family income.7
Sec. 3. RCW 28B.15.067 and 2023 c 9 s 1 are each amended to read 8
as follows: 9
(1) Tuition fees shall be established under the provisions of 10
this chapter. 11
(2) The maximum increase in tuition operating fees for resident 12
undergraduates at institutions of higher education as defined in RCW 13
28B.10.016, excluding applied baccalaureate degrees as defined in RCW 14
28B.50.030, shall be calculated by the office of financial management 15
and transmitted to the institutions of higher education by October 16
1st of each year for the following academic year. Tuition operating 17
fees for resident undergraduates at institutions of higher education 18
as defined in RCW 28B.10.016 shall be reduced by 10 percent each 19
academic year beginning with the 2027-28 academic year through the 20
2029-30 academic year. Beginning in the 2030-31 academic year, 21
tuition operating fees for resident undergraduates at institutions of 22
higher education as defined in RCW 28B.10.016, excluding applied 23
baccalaureate degrees as defined in RCW 28B.50.030, may increase by 24
no more than the average annual percentage growth rate in the median 25
hourly wage for Washington as the wage is determined by the federal 26
bureau of labor statistics and calculated based on the previous 14 27
years prior to the transmittal date by the office of financial 28
management. 29
(3) The governing boards of the state universities, regional 30
universities, and The Evergreen State College; and the state board 31
for community and technical colleges may reduce or increase full-time 32
tuition fees for all students other than resident undergraduates, 33
including nonresident students, summer school students, and students 34
in other self-supporting degree programs. Percentage increases in 35
full-time tuition may exceed the fiscal growth factor. Except during 36
the 2013-2015 fiscal biennium, the state board for community and 37
technical colleges may pilot or institute differential tuition 38
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models. The board may define scale, scope, and rationale for the 1
models. 2
(4) The tuition fees established under this chapter shall not 3
apply to high school students enrolling in participating institutions 4
of higher education under RCW 28A.600.300 through 28A.600.400.5
(5)(a) The tuition fees established under this chapter shall not 6
apply to eligible students enrolling in a dropout reengagement 7
program through an interlocal agreement between a school district and 8
a community or technical college under RCW 28A.175.100 through 9
28A.175.110. 10
(b) The tuition fees established under this chapter shall not 11
apply to students incarcerated with the department of corrections who 12
are participating in credit-eligible postsecondary education courses 13
and degree programs when the program expenses are funded by 14
nontuition resources such as, but not limited to, grants, contracts, 15
and donations. 16
(6) As a result of any changes in tuition under section 3, 17
chapter 36, Laws of 2015 3rd sp. sess., the governing boards of the 18
state universities, the regional universities, and The Evergreen 19
State College shall not reduce resident undergraduate enrollment 20
below the 2014-15 academic year levels. 21
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