SENATE BILL REPORT

SB 5383

BYSenators Zimmerman, Saling, Gaspard, Rinehart and Lee

Creating the capital projects incentive program for community colleges.

Senate Committee on Education

Senate Hearing Date(s):February 19, 1987; February 25, 1987

Majority Report:  That Substitute Senate Bill No. 5383 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Gaspard, Chairman; Bauer, Vice Chairman; Rinehart, Vice Chairman; Bailey, Bender, Benitz, Patterson, Saling.

Senate Staff:Judy McNickle (786-7423)

                  February 25, 1987

Senate Committee on Ways & Means

Senate Hearing Date(s):March 9, 1987

Majority Report:  That Second Substitute Senate Bill No. 5383 be substituted therefor, and the second substitute bill do pass.

      Signed by Senators Gaspard, Vice Chairman; Bauer, Bluechel, Craswell, Hayner, Kreidler, Lee, McDonald, Owen, Rasmussen, Rinehart, Saling, Talmadge, Williams, Wojahn.

Senate Staff:Fred Romero (786-7715)

                  March 10, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 9, 1987

BACKGROUND:

Washington community colleges have two major sources of capital funds:  the building fee portion of tuition and fees, which was set in 1971-72 at $127.50 per year, and the state general fund.  Both sources are used to retire general obligation bonds, the proceeds of which are appropriated by the Legislature.  It has been suggested that the community colleges be encouraged to seek additional revenue from private contributors to help meet capital needs.

The Distinguished Professors program has been suggested as a model for creating a matching fund program to help meet community college capital funding needs.  The Legislature created the Distinguished Professors program in 1985 to help four-year colleges and universities create endowments for distinguished scholars.  That program allows institutions to apply for $250,000 from trust funds when such institutions can match state funds with equally pledged contributed private donations.  This matching arrangement enables the state to double the impact of each dollar raised and spent in that program.

SUMMARY:

The capital projects incentive program for Washington community colleges is created to encourage public two-year colleges to raise money from private sources for capital construction projects.  The program is intended to provide an additional funding source for capital projects but not to replace any other means of funding these projects.  The program is administered by the State Board for Community College Education (SBCCE), which will provide grants, when funds are available, to community colleges that:  apply for grants, demonstrate a need for capital projects, agree to conditions established by the SBCCE, obtain explicit project approval before any private fund-raising efforts, and match state funds with equal amounts of money pledged or contributed from private sources specifically for capital projects.

The SBCCE is responsible for:  adopting necessary rules, establishing a screening committee to evaluate proposals, publishing criteria for evaluating proposals, actively soliciting grants and providing information to community colleges about the program, establishing reporting and monitoring requirements for grant recipients, and approving projects prior to any fund-raising efforts.  The SBCCE is also responsible for awarding grants in the order they are approved.  These grants must be equal to no more than 50 percent of the amount contributed from private sources.  The SBCCE is prohibited from reducing the amount of promised grants and thereby distributing smaller grants to more projects.

Community colleges that receive funds for the capital incentive program may deposit such funds in their local funds but must use the funds only for purposes specified in their grants.  At the end of any fiscal biennium, community colleges must deposit in their local fund accounts monies remaining unspent from appropriations to their operating budgets.  Money from unexpended operating funds must be used only for those projects specifically approved for the capital projects incentive program by the SBCCE.  Those unexpended funds may be subtracted from the amount of private donations required to receive state matching grants.  If individual colleges have unexpended funds but do not have approved projects for this program, they may spend those funds on other SBCCE-approved capital projects.

The SBCCE is empowered to receive and expend contributions to this program, but must deposit all monies received in the capital projects incentive fund, which is assigned to the state treasurer.  The SBCCE authorizes all disbursements from the fund, which is subject to allotment approval by the Office of Financial Management but does not require legislative appropriation for disbursement.

An unspecified sum is appropriated from the state general fund to the state treasurer for deposit in the capital projects incentive fund.

EFFECT OF PROPOSED SUBSTITUTE:

Grants to the community colleges must be equal to amounts contributed from private sources.  The appropriations section is deleted and title is changed to reflect that deletion.

EFFECT OF PROPOSED SECOND SUBSTITUTE:

The requirement to allow community colleges to transfer unexpended moneys remaining in operating funds at the end of any fiscal biennium into the capital projects incentive program is deleted.

Fiscal Note:      none requested

Senate Committee - Testified: EDUCATION: Senator Hal Zimmerman

Senate Committee - Testified: WAYS & MEANS: No one