HOUSE BILL REPORT

SSB 5688

As Amended by the House

BYSenate Committee on Commerce & Labor (originally sponsored by Senators Smitherman, Warnke and Lee)

Establishing a review procedure for commercial activities conducted by institutions of higher education.

House Committe on Higher Education

Majority Report:  Do pass with amendment.  (10)

      Signed by Representatives Jacobsen, Chair; Heavey, Vice Chair; Barnes, Basich, Jesernig, Miller, Nelson, Silver, K. Wilson and Wineberry.

House Staff:Joan Elgee (786-7166)

AS PASSED HOUSE APRIL 7, 1987

BACKGROUND:

During recent years, the legislature has received testimony from representatives of for-profit businesses stating that institutions of higher education are competing unfairly with private sector businesses in providing certain goods and services.

SUMMARY:

The legislature states its intent to require institutions of higher education to define the legitimate purposes under which commercial activities may be approved, and to establish a mechanism for reviewing commercial activities.  Both the four-year institutions and the community colleges are covered by the provisions.

Institutions of higher education, in consultation with representatives of local business, organizations and small business are required to develop: (1) comprehensive policies that define the legitimate purposes under which institutions may provide goods, services or facilities; (2) a mechanism for reviewing current and proposed commercial activities; and (3) a process for responding to inquiries from private business.

Criteria are set forth to be considered by the institutions in developing policies.  For the provision of goods, services, or facilities to the general public, the institutions shall consider: 1)  the goods, services, or facilities represent a resource which is substantially and directly related to the institution's mission which is not practically available privately and for which there is demand; and 2) fees charged take into account the full direct and indirect costs, overhead, and the price in the private sector.  For the provision of goods, services, or facilities to the campus community, the institution shall consider:  1)  the goods, services, or facilities are substantially and directly related to the institution's mission; 2) provision of the goods, services, or facilities is a convenience and supports the campus community, or facilitates extracurricular, public service, or on-campus residential life; 3) fees charged take into account the full direct and indirect costs; and 4) the adequacy of security procedures to ensure that the goods, services, or facilities are provided only to the campus community.

An institution's education and residential life programs are not subject to review.  The institutions are required to report to the legislature by December 1, 1987, outlining their policies regarding commercial activities.

Fiscal Note:      Attached.

House Committee ‑ Testified For:    Cliff Finch, Association of Washington Business; Jerry Brong, Community Computer Centers; Jay Hartford, Washington State University; Kevin Krag, Body Magic Fitness; Robert Schiffner, Student Book Corporation; William Hawkins; B.J. Fuller, B.J.'s Beauty and Barber School; James Lince, J.L.'s School of Hair Design; Frank Erickson; and Rose Bowman, Kresky Auto Repair & Electric.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Public institutions of higher education unfairly compete with the private sector in such areas as sale of computers and athletic memberships.  The mechanism established in the bill will allow the institutions to work with local communities to solve the problem.

House Committee - Testimony Against:      None Presented.