AUSTIN -- The Texas Senate approved legislation Monday that would limit tuition and fee increases to no more than 5 percent a year for most large universities.

The legislation would also permit schools -- but not require them -- to establish a separate program allowing incoming college freshmen to lock in tuition rates and pay the same amount for four years.

The proposed relief package comes six years after Texas lawmakers allowed universities to raise tuition to make up for declining state appropriations. According to the Texas Higher Education Coordinating Board, annual tuition and fees rose 86 percent from 2003 to 2009.

But the reforms passed Monday wouldn't simply give that rate-setting power back to the Legislature. Instead, the Senate passed a complicated package of mandates and incentives designed to slowly lower tuition costs.

It would also re-establish a more direct tie between the amount lawmakers appropriate and the tuition and fees parents and students are asked to pay. Schools would have much more flexibility to raise rates, for example, when the Legislature doesn't meet their funding needs.

"Frankly, this is intended to pressure the Legislature to keep tuition down by funding higher education appropriately," said Sen. Judith Zaffirini, D-Laredo, author of the tuition bill.

Zaffirini acknowledged the bill is "very complex" and likely to change substantially as it moves through the Capitol -- and gets reconciled with competing House versions.

The Senate bill contains numerous contingencies and transition periods, and most of its tuition-limit provisions apply only to the 17 universities that have academic costs above the state median.

The state's largest institutions of higher education, including the University of Texas at Austin, Texas A&M University, Texas Tech University, the University of Houston and the University of North Texas, are at the cost threshold making them subject to the tuition limits, records show.

Those now below the median, and thereby exempt from the limits, include Lamar University and UTEP.

Institutions with below-median costs would be allowed to raise their tuition higher than the limits set out in the bill. The tuition cap, once fully implemented, would have to be the lesser of average inflation -- defined as a rolling, three-year average of the Consumer Price Index -- or 5 percent.

Zaffirini's approach represents a big change from the tuition moratorium and hard caps that others proposed at the beginning of the session. Two-thirds of the Senate -- including many members who had supported allowing universities to raise tuition rates on their own -- had endorsed a plan to freeze tuition rates for two years. Universities vigorously fought the idea.

In 2003, Texas lawmakers were facing a huge budget shortfall and couldn't come up with the funding universities needed. Instead, they gave university governing boards the power to set their own tuition rates -- and thereby forcing Texans to fund more and more of the cost of their kids' college education.