The state’s three largest four-year institutions are one step closer to gaining the authority to set tuition.

Last night, a legislative panel moved a bill forward that would grant the University of Washington, Washington State University and Western Washington University limited tuition-setting authority for six years starting from the 2011-2012 academic year.

The Senate Ways and Means Committee voted 14-3 to pass Substitute Senate Bill 6562, which would allow the schools’ governing boards to raise resident undergraduate tuition by up to 14 percent per year. But the average annual compounded rate of increase may not exceed 9 percent over 15 years.

The universities would also be subject to new performance mandates outlined in the proposal. They include:

Indicators measuring cost, quality, and timeliness of student progress toward degrees and certifications, and articulation between and within the K-12 and higher education systems.

Level of state and tuition resources necessary to meet the performance outcomes, benchmarks, and goals including per-student funding goals.

Indicators measuring recruitment, retention, and success of students, faculty, and staff from underrepresented and diverse communities.

Benchmarks and goals for long-term degree production, including in high-demand fields.