In response to a legislative inquiry, a study was conducted by the Washington State Board for Community College Education (SBCCE) to determine the adequacy of policies and laws governing the state funding classification of community college courses. During the study, the SBCCE examined the extent to which the colleges were financing courses with a combination of state and other funds and researched study questions related to: (1) the degree to which colleges should be legally authorized to finance courses with a combination of funds from various sources; (2) the extent and adequacy of SBCCE's statutory authority to regulate the funding status of courses; (3) the legitimate sources of federal or private funds that may supplement state funds; (4) the application of a discount against full-time equivalent enrollment generated by courses using a combination of funds; (5) the adequacy of SBCCE's funding definitions; (6) the feasibility of using alternative, non-formula state funding for programs which cannot be fully supported by statutory appropriations; (7) changes needed in the management information system (MIS); and (8) appropriate course funding status categories. The study report defines terms, discusses the history of course classification in the system, summarizes the answers to the research questions, and outlines recommendations. Information from other states and recommended statutory and MIS changes are appended. (JP)