AN ACT Relating to commercial activities of institutions of higher education; and adding a new chapter to Title 28B RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The primary mission of institutions of higher education is the creation and dissemination of knowledge. Institutions of higher education must be mindful that in providing goods and services for fees, they may be competing with local private businesses.

It is the intent of the legislature to define the legitimate purposes under which commercial activities may be approved, and to establish a mechanism for review of such activities. Recognizing that the central mission of institutions of higher education is providing instruction, research, and public service, however, this policy shall not apply to charges for instruction in the institutions' regular, extension, evening, or continuing education programs; services provided in the practicum aspects of its instructional and research programs; and services for fees in its extracurricular or residential life programs, including residence halls, food services, athletic and recreational programs, and the performing arts programs.

NEW SECTION. Sec. 2. For the purposes of this chapter:

(1) "Institutions of higher education" or "institutions" mean those institutions as defined in RCW 28B.10.016(4).

(2) "Commercial activity" means an activity which provides a product or service for a fee which could be obtained from a commercial source and which does not constitute an educational function. The term includes activities that are a part of the delivery of a product or service which are separable and therefore appropriately performed by a commercial source.

NEW SECTION. Sec. 3. Institutions of higher education may engage in commercial activities only when those activities are directly and substantially related to the educational mission of the institution. Charges for commercial activities shall be determined taking into account the full cost of goods and services, including institutional overhead, as well as the competitive price of such items in the local community.

NEW SECTION. Sec. 4. The following criteria shall be used in assessing the validity of providing goods or services to members of the campus community:

(1) The goods or services are substantially and directly related to the institution's instructional, research, or service mission.

(2) Provision of the goods or services on campus represent a special convenience to and supports the campus community, or facilitates extracurricular, public service, or on-campus residential life.

(3) The fee for the goods or services cover their cost, including institutional overhead.

(4) Security procedures ensure that the goods or services are provided only to persons holding valid and current identification.

NEW SECTION. Sec. 5. Institutions of higher education shall not engage in any commercial activities solely for the purpose of raising revenue to support an educational or research activity if the goods or services sold are not directly and substantially related to the educational or research program.

The following criteria shall be used in assessing the validity of providing goods or services to the external community:

(1) The goods or services represent a resource which is directly related to a unit's educational mission, which is not commonly available or otherwise easily accessible, and for which there is a demand from the external community.

(2) The fee for the goods or services is established to account for the full costs of the goods or services, including institutional overhead. The price of such items in the private marketplace shall be taken into account in establishing the fee, and in no case may prices be established below that level.

NEW SECTION. Sec. 6. Approval for commercial activities covered by this chapter shall be vested in deans and vice-presidents, or their equivalent, for the units under their authority. The chief administrative officer of the institution shall appoint a commercial review officer to review commercial activities proposals. Before any sales project may be implemented, the unit proposing the project shall provide to the dean or vice-president, as appropriate, a request setting forth all pertinent information about the sales plan, and justification for the project addressing the requirements of this chapter and its evaluation criteria. The dean or vice-president shall, if he or she approves the project, notify the institution's commercial review officer of this approval as a condition to the creation of a budget, and provide copies of the documentation supporting the request.

Each category of goods or services sold is to be considered individually so as to avoid the unplanned expansion of any sales program. All new categories of commercial activity shall be justified to and reviewed by the dean or vice-president in accord with this chapter.

NEW SECTION. Sec. 7. The chief administrative officer for the institution, or his or her representative, is designated as the officer who shall be available to:

(1) Resolve matters concerning the internal application of this chapter. It is the role of the institution's commercial review officer to review requests from deans and vice-presidents to establish budgets. If the commercial review officer believes that the request is inconsistent with this chapter, he or she shall refer the matter to the chief administrative officer for final decision; and

(2) Address questions from members of the external community about specific sales programs.

Because sales of goods or services to other governmental agencies involve institution-wide considerations, the chief administrative officer shall review all proposed sales to other governmental agencies.

NEW SECTION. Sec. 8. All current commercial activities shall be evaluated by the institutions' deans and vice-presidents for units under their authority, following the procedure for initial review and approval in this chapter, not later than six months after the effective date of this section.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act shall constitute a new chapter in Title 28B RCW.