Bill Text: PA SB132 | 2009-2010 | Regular Session | Introduced


Bill Title: Further providing for community college financial programs and reimbursements; establishing the Community College Deferred Maintenance Fund; and abrogating a regulation.

Spectrum: Slight Partisan Bill (Republican 14-8)

Status: (Introduced - Dead) 2009-01-30 - Referred to EDUCATION [SB132 Detail]

Download: Pennsylvania-2009-SB132-Introduced.html

  

 

    

PRINTER'S NO.  104

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

132

Session of

2009

  

  

INTRODUCED BY ERICKSON, TOMLINSON, FERLO, VANCE, RAFFERTY, CORMAN, FONTANA, ALLOWAY, MUSTO, BAKER, GREENLEAF, EARLL, O'PAKE, WAUGH, BROWNE, SMUCKER, KITCHEN, PILEGGI, LOGAN, STACK AND WONDERLING, JANUARY 30, 2009

  

  

REFERRED TO EDUCATION, JANUARY 30, 2009  

  

  

  

AN ACT

  

1

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

2

act relating to the public school system, including certain

3

provisions applicable as well to private and parochial

4

schools; amending, revising, consolidating and changing the

5

laws relating thereto," further providing for community

6

college financial programs and reimbursements; establishing

7

the Community College Deferred Maintenance Fund; and

8

abrogating a regulation.

9

The General Assembly of the Commonwealth of Pennsylvania

10

hereby enacts as follows:

11

Section 1.  Section 1902-A of the act of March 10, 1949 (P.L.

12

30, No.14), known as the Public School Code of 1949, added July

13

1, 1985 (P.L.103, No.31), is amended to read:

14

Section 1902-A.  Powers and Duties of State Board of

15

Education.--(a)  The State Board of Education shall have the

16

power, and its duty shall be:

17

(1)  To adopt such policies, standards, rules and regulations

18

formulated by the Council of Higher Education, as may be

19

necessary to provide for the establishment, operation and

20

maintenance of community colleges, including minimum

 


1

requirements for physical facilities and equipment, curriculum,

2

faculty, standards and professional requirements, qualifications

3

for admission and advancement of students, student enrollment,

4

student population of the area to be served by the community

5

college, requirements for satisfactory completion of a two-year

6

program and the degrees or diplomas or certificates to be

7

awarded therefor, means of financing and financial resources for

8

the establishment and support of the community college, and all

9

matters necessary to effectuate the purposes of this act.

10

(2)  To approve or disapprove plans for the establishment or

11

operation of a community college.

12

(3)  To approve or disapprove petitions of school districts

13

or municipalities applying for participation in an established

14

community college. No petition may be approved unless it is

15

accompanied by the consent of the governing bodies of the

16

majority of the members of the local sponsor of the established

17

community college to the participation of the petitioning school

18

district or municipality.

19

(b)  In determining such policies, standards, rules and

20

regulations, the State Board of Education may consider relevant

21

all minimum requirements established by statute or by regulation

22

with respect to the State colleges and universities of the

23

Commonwealth and may consider relevant such minimum requirements

24

established by statute or by regulation with respect to

25

secondary and special education programs in the school district

26

or districts of the area to be served by the community college.

27

Regulations promulgated under this article shall take effect at

28

the beginning of the school year following promulgation.

29

(c)  In approving or disapproving such plans, the State Board

30

of Education shall consider the needs of areas adjacent to the

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1

areas to be served by the community college and of the State

2

with respect to higher education and long range plans therefor

3

established by the State Board of Education. Other school

4

districts and municipalities may petition the State Board of

5

Education to become a part of a local sponsor as hereafter in

6

this act provided.

7

(d)  No plan for the establishment of a community college

8

shall be approved unless the State Board of Education determines

9

that the local sponsor has a population of a sufficient number

10

to assure a sustained minimum enrollment, has sufficient wealth

11

to financially support such college and is not adequately served

12

by established institutions of higher learning. No plan for the

13

establishment of a community college shall be approved unless it

14

contains an estimate of operating cost for administration,

15

instruction, operation and maintenance and such other accounts

16

as the State Board of Education may, from time to time,

17

determine. No plan for the establishment of a community college

18

shall be approved unless it contains an estimate of any proposed

19

capital improvements for the next following ten years.

20

(e)  To confer with and obtain the approval of the Governor's

21

Office as to the number of community colleges which can be

22

approved for participation during the ensuing fiscal period.

23

(f)  Wherever in this act the approval of the State Board of

24

Education is required in any matter, the State Board of

25

Education may require the Department of Education to make and

26

report its findings and recommendations on such matter to the

27

Council of Higher Education for the formulation of policies,

28

standards, rules and regulations for consideration by the State

29

Board of Education.

30

Section 2.  Section 1913-A of the act, amended or added July

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1

1, 1985 (P.L.103, No.31), October 20, 1988 (P.L.827, No.110),

2

June 7, 1993 (P.L.49, No.16), June 22, 2001 (P.L.530, No.35) and

3

July 13, 2005 (P.L.226, No.46), is amended to read:

4

Section 1913-A.  Financial Program; Reimbursement of

5

Payments.--(a)  The plan submitted by the local sponsor shall

6

set forth a financial program for the operation of the community

7

college. The plan shall provide that the local sponsor shall

8

appropriate or provide to the community college an amount at

9

least equal to the community college's annual operating costs

10

less the student tuition as determined in section 1908-A(a) less

11

the Commonwealth's payment as determined in subsection (b)(1) of

12

this section. The plan shall also provide that one-half of the

13

annual capital expenses shall be appropriated or provided by the

14

local sponsor to the community college. The local sponsor's

15

appropriation for annual operating costs and annual capital

16

expenses may in part be represented by real or personal property

17

or services made available to the community college. The plan

18

shall indicate whether the appropriation shall come from general

19

revenues, loan funds, special tax levies or from other sources,

20

including student tuitions.

21

(b)  (1)  The Commonwealth shall pay to a community college

22

on behalf of the sponsor on account of its operating costs

23

during the fiscal year from funds appropriated for that purpose

24

an amount equal to:

25

(i)  for the 1993-1994 fiscal year through the 2000-2001

26

fiscal year, the lesser of such college's variable State share

27

ceiling as determined in clause (1.3) or such college's

28

equivalent full-time student reimbursement as determined in

29

clause (1.4);

30

(ii)  for the 2001-2002 fiscal year through the 2004-2005

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1

fiscal year, the college's equivalent full-time student

2

reimbursement as determined in clause (1.4);

3

(iii)  for the 2005-2006 fiscal year, the college's payment

4

as determined in clause (1.5); and

5

(iv)  for the 2006-2007 fiscal year and each fiscal year

6

thereafter, the college's payment as determined in clause (1.6).

7

(1.2)  The Secretary of Education, in consultation with the

8

community colleges, shall promulgate standards for credit

9

courses and for noncredit courses that will be eligible for

10

Commonwealth reimbursement. The standards shall specifically

11

exclude from eligibility for reimbursement any course or program

12

in avocational or recreational pursuits. The standards shall be

13

promulgated by the beginning of the 1994-1995 fiscal year. Until

14

such standards are promulgated, no community college will be

15

reimbursed for any credit course which was offered by such

16

college as a noncredit course during the college's 1992-1993

17

fiscal year.

18

(1.3)  The variable State share ceiling of a community

19

college shall be determined as follows:

20

(i)  Subtract the taxable income per person of the local

21

sponsor from the highest taxable income per person of any county

22

in the Commonwealth.

23

(ii)  Divide the amount determined under subclause (i) by the

24

difference between the highest taxable income per person of any

25

county in the Commonwealth and the lowest taxable income per

26

person of any county in the Commonwealth.

27

(iii)  Multiply the quotient determined under subclause (ii)

28

by one-sixth.

29

(iv)  Add one-third to the product determined under paragraph

30

(iii).

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1

(v)  Multiply the sum determined under subclause (iv) by the

2

community college's operating costs in the year for which

3

reimbursement is being claimed.

4

(vi)  The taxable income per person data used in the

5

preceding calculation shall be data certified to the Secretary

6

of Education by the Secretary of Revenue under section 2501(9.1)

7

for school district local sponsors or data otherwise published

8

by the Secretary of Revenue for a municipal local sponsor.

9

(1.4)  The equivalent full-time student reimbursement of a

10

community college shall be the sum of credit course, noncredit

11

course and stipend reimbursements. These reimbursements shall be

12

calculated using a reimbursement factor of one thousand and

13

forty dollars ($1,040) for the 1993-1994 fiscal year, of one

14

thousand eighty dollars ($1,080) for the 1994-1995 fiscal year

15

and of one thousand one hundred eighty dollars ($1,180) for the

16

1995-1996 fiscal year and one thousand and two hundred and ten

17

dollars ($1,210) for the 1996-1997 fiscal year and one thousand

18

two hundred sixty dollars ($1,260) for the 1997-1998 fiscal year

19

and the 1998-1999 fiscal year and one thousand three hundred

20

dollars ($1,300) for the 1999-2000 fiscal year and one thousand

21

four hundred dollars ($1,400) for the 2000-2001 fiscal year and

22

one thousand five hundred dollars ($1,500) for the 2001-2002

23

fiscal year and for each year thereafter and shall be determined

24

as follows:

25

(i)  Credit course reimbursement shall be calculated by

26

multiplying the reimbursement factor by the number of equivalent

27

full-time students enrolled in credit courses as determined by

28

an audit to be made in a manner prescribed by the State Board of

29

Education. The following apply:

30

(A)  Course enrollment is to be determined by the standards

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1

of the community college.

2

(B)  Computer-based documentation or paper-based

3

documentation may be used to verify enrollment.

4

(C)  Enrollment in a program of study is to be determined

5

solely by the declaration of the student.

6

(ii)  Noncredit course reimbursement shall be calculated as

7

follows:

8

(A)  [eighty] Eighty percent (80%) of the reimbursement

9

factor multiplied by the number of equivalent full-time students

10

enrolled in eligible noncredit courses for the 1993-1994 fiscal

11

year, as determined by the audit referred to in paragraph (i)

12

[;].

13

(B)  [seventy] Seventy percent (70%) of the reimbursement

14

factor multiplied by the number of equivalent full-time students

15

enrolled in eligible noncredit courses for the 1994-1995 fiscal

16

year and for each year thereafter, as determined by the audit

17

referred to in paragraph (i)[; or].

18

(C)  [one] One hundred percent (100%) of the reimbursement

19

factor multiplied by the number of equivalent full-time students

20

enrolled in eligible noncredit public safety courses that

21

provide training for volunteer firefighters and emergency

22

medical services for the 1995-1996 fiscal year and for each year

23

thereafter, as determined by the audit referred to in paragraph

24

(i).

25

(D)  A noncredit course is eligible for reimbursement if all

26

of the following apply:

27

(I)  The course is in the area of public safety; adult basic

28

education or adult literacy; occupational skills; academics; or

29

a program for certification in accordance with standards

30

established by statute, regulation or appropriate industry.

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1

(II)  Regardless of whether the instructor's compensation is

2

paid directly by the community college or paid by an entity that

3

contracts with the community college, the community college is

4

responsible for selecting; supervising; and, if appropriate,

5

dismissing the instructor.

6

(E)  Course enrollment is to be determined by the standards

7

of the community college.

8

(iii)  Stipend reimbursement on account of a community

9

college's operating costs for all equivalent full-time students

10

enrolled in the following categories of two-year or less than

11

two-year occupational or technical programs, shall be the sum of

12

the following:

13

(A)  One thousand one hundred dollars ($1,100) per full-time

14

equivalent student enrolled in advanced technology programs. For

15

the fiscal year 1995-1996, 1996-1997 and 1997-1998, the

16

reimbursement rate shall be calculated at one thousand one

17

hundred seventy-five dollars ($1,175) per full-time equivalent

18

student enrolled in advanced technology programs. For the fiscal

19

year 1998-1999 and each year thereafter, the reimbursement rate

20

shall be calculated at one thousand four hundred sixty dollars

21

($1,460) per full-time equivalent student enrolled in advanced

22

technology programs. Advanced technology programs are programs

23

using new or advanced technologies which hold promise for

24

creating new job opportunities, including such fields as

25

robotics, biotechnology, specialized materials and engineering

26

and engineering-related programs.

27

(B)  One thousand dollars ($1,000) per full-time equivalent

28

student enrolled in programs designated as Statewide programs.

29

For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the

30

reimbursement rate shall be calculated at one thousand seventy-

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1

five dollars ($1,075) per full-time equivalent student enrolled

2

in programs designated as Statewide programs. For the fiscal

3

year 1998-1999 and each year thereafter, the reimbursement rate

4

shall be calculated at one thousand three hundred sixty dollars

5

($1,360) per full-time equivalent student enrolled in programs

6

designated as Statewide programs. A Statewide program is a

7

program which meets one or more of the following criteria:

8

(I)  Program enrollment from out-of-sponsor area is twenty

9

per cent or more of the enrollment for the program.

10

(II)  A consortial arrangement exists with another community

11

college to cooperatively operate a program or share regions in

12

order to avoid unnecessary program duplication.

13

(C)  Five hundred dollars ($500) per full-time equivalent

14

student enrolled in other occupational or technical programs.

15

For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the

16

reimbursement rate shall be calculated at five hundred seventy-

17

five dollars ($575) per full-time equivalent student enrolled in

18

other occupational or technical programs. For the fiscal year

19

1998-1999 and each year thereafter, the reimbursement rate shall

20

be calculated at eight hundred sixty dollars ($860) per full-

21

time equivalent student enrolled in other occupational or

22

technical programs.

23

(1.5)  For the 2005-2006 fiscal year, the payment for a

24

community college shall consist of the following:

25

(i)  Each community college shall receive reimbursement for

26

operating costs equal to the reimbursement for the 2004-2005

27

fiscal year as determined under clause (1.4)(i) and (ii). This

28

amount shall be determined based upon the midyear rebudget

29

submitted by a community college in February 2005.

30

(ii)  Each community college shall receive an economic

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1

development stipend as calculated under clause (1.7).

2

(iii)  Each community college shall receive a base supplement

3

determined by:

4

(A)  subtracting the total amount of funds determined under

5

subclauses (i) and (ii) from the State appropriation for payment

6

of approved operating expenses of community colleges for the

7

2005-2006 fiscal year;

8

(B)  dividing the payment under subclauses (i) and (ii) by

9

the sum of the amounts determined for all community colleges

10

under subclauses (i) and (ii); and

11

(C)  multiplying the quotient from subparagraph (B) by an

12

amount equal to seventy-five percent (75%) of the amount

13

determined under paragraph (A).

14

(iv)  Each community college with a 2003-2004 equivalent

15

full-time enrollment in credit, noncredit and workforce

16

development courses greater than its 2002-2003 equivalent full-

17

time enrollment in credit, noncredit and workforce development

18

courses shall receive a growth supplement amount determined by:

19

(A)  subtracting its 2002-2003 equivalent full-time

20

enrollment in credit, noncredit and workforce development

21

courses from its 2003-2004 equivalent full-time enrollment in

22

credit, noncredit and workforce development courses;

23

(B)  dividing the difference from paragraph (A) by the sum of

24

the differences from paragraph (A) for all community colleges;

25

and

26

(C)  multiplying the quotient from paragraph (B) by an amount

27

equal to twenty-five percent (25%) of the amount determined

28

under subclause (iii)(A).

29

Calculations under this subclause shall be based upon the final

30

claim forms submitted by a community college for the 2002-2003

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1

and 2003-2004 fiscal years.

2

(1.6)  For the 2006-2007 fiscal year and each fiscal year

3

thereafter, the payment for a community college shall consist of

4

the following:

5

(i)  Each community college shall receive an amount equal to

6

the reimbursement for operating costs, base supplement and

7

growth supplement amounts it received in the immediately

8

preceding fiscal year.

9

(ii)  Each community college shall receive an economic

10

development stipend as calculated under clause (1.7). The amount

11

available for economic development stipends shall increase each

12

year by the percent increase in the State appropriation for

13

payment of approved operating expenses of community colleges.

14

(iii)  Each community college shall receive a base supplement

15

determined by:

16

(A)  subtracting the total amount of funds determined under

17

subclauses (i) and (ii) from the State appropriation for payment

18

of approved operating expenses of community colleges;

19

(B)  dividing the payment under subclause (i) by the sum of

20

the amounts determined for all community colleges under

21

subclause (i); and

22

(C)  multiplying the quotient from paragraph (B) by an amount

23

equal to seventy-five percent (75%) of the amount determined

24

under paragraph (A).

25

(iv)  Each community college with an equivalent full-time

26

enrollment in credit, noncredit and workforce development

27

courses for the year prior to the immediately preceding year

28

greater than its equivalent full-time enrollment in credit,

29

noncredit and workforce development courses for the second year

30

prior to the immediately preceding year shall receive a growth

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1

supplement amount determined by:

2

(A)  subtracting its equivalent full-time enrollment in

3

credit, noncredit and workforce development courses for the

4

second year prior to the immediately preceding year from its

5

equivalent full-time enrollment in credit, noncredit and

6

workforce development courses for the year prior to the

7

immediately preceding year;

8

(B)  dividing the difference from paragraph (A) by the sum of

9

the differences from paragraph (A) for all community colleges;

10

and

11

(C)  multiplying the amount from paragraph (B) by an amount

12

equal to twenty-five percent (25%) of the amount determined

13

under subclause (iii)(A).

14

Secondary senior high school students enrolled in credit-

15

bearing, nonremedial college courses shall be included in the

16

calculation under paragraph (A). Calculations under this

17

subclause shall be based upon the audited financial statements

18

submitted by a community college pursuant to subsection (k.1).

19

(1.7)  The payment for a community college shall include an

20

economic development stipend which shall consist of the

21

following:

22

(i)  For the 2005-2006 fiscal year, each community college

23

shall receive an amount equal to the reimbursement for the

24

2004-2005 fiscal year as determined under clause (1.4)(iii) and

25

under section 1501 of the act of December 18, 2001 (P.L.949, No.

26

114), known as the "Workforce Development Act." This amount

27

shall be determined based upon the midyear rebudget submitted by

28

a community college in February 2005.

29

(ii)  For the 2006-2007 fiscal year and each fiscal year

30

thereafter, each community college shall receive, subject to the

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1

provisions of subclause (iii), an amount determined by:

2

(A)  Adding the following:

3

(I)  the number of full-time equivalent students enrolled in

4

high-priority and high-instructional-cost occupation programs at

5

the community college multiplied by 1.50;

6

(II)  the number of full-time equivalent students enrolled in

7

high-priority occupation programs at the community college

8

multiplied by 1.25; and

9

(III)  the number of full-time equivalent students enrolled

10

in noncredit workforce development courses at the community

11

college.

12

(B)  Dividing the total from paragraph (A) by the sum of the

13

totals from paragraph (A) for all community colleges.

14

(C)  Multiplying the amount from paragraph (B) by the amount

15

allocated for the economic development stipend pursuant to

16

clause (1.6)(ii).

17

The number of full-time equivalent students shall be determined

18

based upon the final midyear rebudget submitted by a community

19

college for the prior fiscal year. Such rebudget shall be

20

submitted, as required by the Department of Education, no later

21

than May 31, 2006, and May 31 of each year thereafter.

22

(iii)  For the 2006-2007 and 2007-2008 fiscal years, the

23

following shall apply:

24

(A)  Full-time equivalent students enrolled in stipend

25

advanced technology programs shall be counted as full-time

26

equivalent students enrolled in high-priority and high-

27

instructional-cost occupation programs for the purpose of the

28

calculation in subclause (ii).

29

(B)  Full-time equivalent students enrolled in stipend

30

Statewide programs shall be counted as full-time equivalent

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1

students enrolled in high-priority occupation programs for the

2

purpose of the calculation in subclause (ii).

3

(C)  Full-time equivalent students enrolled in other stipend

4

occupational programs and workforce development courses shall be

5

counted as full-time equivalent students enrolled in noncredit

6

workforce development courses for the purpose of the calculation

7

in subclause (ii).

8

(D)  For reimbursement for any semester that begins on or

9

after January 1, 2006, this subclause shall only apply for

10

students who were enrolled in such programs during the fall 2005

11

semester.

12

(1.8)  (i)  The Department of Education shall annually

13

approve high-priority and high-instructional-cost occupation

14

programs, high-priority occupation programs and noncredit

15

workforce development courses.

16

(ii)  In order to qualify as a high-priority and high-

17

instructional-cost occupation program, the program must:

18

(A)  Provide training:

19

(I)  in a high-priority occupation as defined by the Center

20

for Workforce Information and Analysis within the Department of

21

Labor and Industry; or

22

(II)  in an occupation designed to meet regional workforce

23

needs as documented through collaboration with one or more

24

employers.

25

(B)  Bear an instructional cost to the community college, per

26

full-time-equivalent student, of at least one hundred thirty

27

percent (130%) of the average cost per full-time-equivalent

28

student enrolled in the community college's credit courses.

29

Instructional costs shall be defined by the Department of

30

Education and may include personnel, equipment, curricula and

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1

other costs necessary for the program.

2

(iii)  In order to qualify as a high-priority occupation

3

program or a noncredit workforce development course, the high-

4

priority occupation program or noncredit workforce development

5

course must:

6

(A)  provide training in a high-priority occupation as

7

defined by the Center for Workforce Information and Analysis

8

within the Department of Labor and Industry; or

9

(B)  provide training in an occupation designed to meet

10

regional workforce needs as documented through collaboration

11

with one or more employers.

12

(iv)  In order to qualify under subclause (ii)(A)(II) or

13

(iii)(B), the community college shall submit an application to

14

the Department of Education. The application shall contain:

15

(A)  Evidence of collaboration with one or more employers.

16

(B)  Information as to the nature of the proposed program.

17

(C)  Evidence as to how the program will increase workforce

18

opportunities for participants.

19

(v)  The Department of Education shall:

20

(A)  Determine the form and manner by which applications are

21

to be submitted under subclause (iv).

22

(B)  Approve or reject applications received pursuant to

23

subclause (iv) within twenty (20) days of receipt of a completed

24

application; otherwise, such applications will be deemed

25

approved.

26

(C)  Annually publish guidelines listing criteria and

27

establishing the approval process for programs and courses under

28

this clause.

29

(2)  For the 1993-1994 fiscal year, each community college

30

shall be reimbursed under clause (1) in an amount which is at

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1

least equal to a one percent (1%) increase over its 1992-1993

2

operating cost and stipend reimbursement. In no case shall a

3

community college's 1993-1994 reimbursement under clause (1) per

4

full-time equivalent student, insofar as said reimbursement does

5

not include a proportionate share attributable to stipend

6

reimbursement under clause (1.4)(iii), exceed its 1992-1993

7

operating cost reimbursement per full-time equivalent student by

8

more than ten percent (10%).

9

(2.1)  For the 1994-1995 fiscal year, each community college

10

shall be reimbursed under clause (1) in an amount which is at

11

least equal to a one percent (1%) increase over its 1993-1994

12

reimbursement under clause (1). In no case shall a community

13

college's 1994-1995 reimbursement under clause (1) per full-time

14

equivalent student, insofar as said reimbursement does not

15

include the proportionate share attributable to stipend

16

reimbursement under clause (1.4)(iii), exceed its 1993-1994

17

reimbursement under clause (1) per full-time equivalent student,

18

insofar as said reimbursement does not include the proportionate

19

share attributable to stipend reimbursement under clause (1.4)

20

(iii) by more than ten percent (10%).

21

(2.2)  For the 1995-1996 fiscal year, each community college

22

shall be reimbursed under clause (1) in an amount which is at

23

least equal to its 1994-1995 reimbursement under clause (1).

24

(3)  The [Secretary] Department of Education annually shall

25

[establish] promulgate regulations establishing criteria to be

26

used to determine eligibility of programs for each of the above

27

stipend categories[,]. The department shall approve programs for

28

funding [in the following fiscal year] according to these

29

[criteria and] regulations. The Secretary of Education shall

30

submit to chairmen of the committees of education in the House

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1

of Representatives and Senate a report setting forth [the

2

established criteria,] any programs approved for funding under

3

these [criteria] regulations and the recipient community

4

colleges.

5

(4)  Each community college shall maintain such accounting

6

and student attendance records on generally accepted auditing 

7

principles and standards [as will lend themselves to

8

satisfactory audit]. The department must complete an audit of a

9

community college for a school year within one year after the

10

completion of that school year. If the department does not meet

11

the time requirement of this clause, the community college

12

affected shall be required to forfeit reimbursement only for an

13

intentional violation or for a violation of previously cited and

14

resolved findings. The Commonwealth shall pay to a community

15

college on behalf of the sponsor on account of its capital

16

expenses an amount equal to one-half of such college's annual

17

capital expenses from funds appropriated for that purpose to the

18

extent that said capital expenses have been approved as herein

19

provided.

20

(5)  For purposes of determining Commonwealth reimbursement

21

of operating costs, Federally funded expenditures for those

22

programs in which the Commonwealth participates in the cost

23

shall be deducted from total operating expenditures to determine

24

net reimbursable operating costs.

25

(c)  (1)  Capital expenses shall mean only such expenses as

26

are incurred with the approval of the Department of Education

27

for amortization of the purchase of lands; purchase,

28

construction or improvement of buildings for administrative and

29

instructional purposes, including libraries; the lease of lands

30

or buildings, or for rentals to an authority for the same

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1

purpose; and, prior to July 1, 2005, for the purchase, lease or

2

rental of capital equipment and furniture used for instructional

3

or administrative purposes. Capital expenses shall include

4

library books and complementary audio-visual equipment purchased

5

during the first five years after establishment. On or after

6

July 1, 2005, capital expenses may include such expenses as are

7

incurred with the approval of the Department of Education for

8

the purchase, lease or rental of capital equipment and furniture

9

used for instructional or administrative purposes. For the

10

purpose of calculating the Commonwealth's share of operating,

11

and capital costs incurred prior to the actual admission of

12

students to a community college, all such costs shall be

13

interpreted as capital costs. No costs and expenses incurred in

14

the establishment, construction, operation or maintenance of

15

dormitories, or the equipment or furnishings for such purposes,

16

shall be included in capital expenses or operating costs for

17

purposes of Commonwealth reimbursement.

18

(2)  The provisions of this subsection shall not prevent the

19

Commonwealth from reimbursing a community college for capital

20

expenses incurred prior to the effective date of this act. Such

21

reimbursement must have approval of the Secretary of Education.

22

(3)  Notwithstanding any other provision of this act, a

23

community college may use a portion of its payment of approved

24

operating expenses for capital expenses not otherwise reimbursed

25

by the Department of Education.

26

(c.1)  Notwithstanding any provision of law to the contrary,

27

two or more community colleges may jointly enter into a

28

financing arrangement through the State Public School Building

29

Authority for the purchase, lease or construction of capital

30

projects deemed necessary by the community colleges. The terms

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1

and conditions of the financing arrangement shall be consistent

2

with the terms and conditions set forth in the act of July 5,

3

1947 (P.L.1217, No.498), known as the "State Public School

4

Building Authority Act."

5

(d)  The State Board of Education shall adopt policies,

6

standards, rules and regulations for determining reimbursable

7

capital expenses and operating costs, and the Department of

8

Education shall approve such expenses and costs for the purpose

9

of reimbursement by the Commonwealth.

10

(e)  The State Board of Education shall apply for, receive

11

and administer, subject to any applicable regulations or laws of

12

the Federal Government or any agency thereof, any Federal

13

grants, appropriations, allocations and programs to fulfill the

14

purpose of this act.

15

(f)  All administrative personnel, faculty, and other

16

employes of the community colleges in the Commonwealth shall be

17

eligible for inclusion in the Public School Employees'

18

Retirement System of Pennsylvania, the Pennsylvania State

19

Employees' Retirement System, or any independent retirement

20

program approved by the Board of Trustees of a community

21

college, and the Secretary of Education.

22

(g)  The community college in the Commonwealth shall be

23

eligible for participation in the act of July 5, 1947 (P.L.1217,

24

No.498), known as the "State Public School Building Authority

25

Act," and the act of May 2, 1945 (P.L.382, No.164), known as the

26

"Municipality Authorities Act of 1945."

27

(h)  In all cases where the board of trustees of any

28

community college fails to pay or provide for the payment of any

29

rental or rentals due the State Public School Building Authority

30

or any municipality authority for any period in accordance with

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1

the terms of any lease entered into between the board of

2

trustees of any community college and the State Public School

3

Building Authority or any municipality authority, or fails to

4

pay or to provide for the payment of any other indebtedness when

5

due, upon written notice thereof from the State Public School

6

Building Authority or any municipality authority, or in such

7

cases where an audit reveals any unpaid indebtedness due, the

8

Secretary of Education shall notify the board of trustees of its

9

obligation and shall withhold out of any State appropriation

10

that may be due to such community college an amount equal to the

11

amount of rental or rentals owing by such board of trustees to

12

the State Public School Building Authority or any municipality

13

authority, or an amount equal to the amount of any other

14

indebtedness owing by such board of trustees, and shall pay over

15

the amount or amounts so withheld to the State Public School

16

Building Authority or any municipality authority or to

17

whomsoever any other indebtedness is due and owing.

18

(i)  The amount payable to each community college Board of

19

Trustees on behalf of the sponsor shall be paid in the year in

20

which the costs and expenses are incurred in quarterly

21

installments and the Secretary of Education shall draw his

22

requisition quarterly upon the State Treasurer in favor of each

23

community college for the amount of reimbursement to which it is

24

entitled. Reimbursement or payment by the Commonwealth for the

25

operational expenses and capital equipment and the furnishings

26

shall be made on or before the end of the fiscal quarters ended

27

on September 30, December 31, March 31 and June 30 of each

28

Commonwealth fiscal year. Reimbursements or payments shall be

29

made semi-annually for the Commonwealth's share of the annual

30

rentals to an authority or the sponsor or sinking fund or debt-

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1

service payments and other leases upon submission of a community

2

college requisition in the form required by the Commonwealth,

3

the reimbursement or payment to be made from funds appropriated

4

for that purpose. Money that is appropriated under this

5

subsection but not expended by a community college Board of

6

Trustees shall not be distributed to a local sponsor.

7

(j)  In no event shall the payments or final reimbursement

8

made by the department following audit exceed the appropriation

9

available for community colleges.

10

(k)  For fiscal years up to and including the 2004-2005

11

fiscal year, audits of community colleges shall be conducted as

12

follows:

13

(1)  Unless otherwise prescribed by the State Board of

14

Education, the Commonwealth's fiscal audits of community

15

colleges under this section shall be conducted in accordance

16

with "Government Auditing Standards," latest revision,

17

promulgated by the United States General Accounting Office.

18

Written audit reports will be produced and will be sent to the

19

community college by the Commissioner of Postsecondary/Higher

20

Education. Any cost disallowed under findings contained in the

21

audit report shall be considered an adjudication within the

22

meaning of 2 Pa.C.S. (relating to administrative law and

23

procedure) and regulations promulgated thereunder.

24

(2)  The Secretary of Education is hereby specifically

25

authorized and shall be required to resolve audit findings

26

involving disallowed costs that are contested by community

27

colleges except for audit findings that involve mathematical

28

errors, violation of regulations or alleged illegal activities.

29

The proposed resolution of the Secretary of Education shall not

30

be subject to the provisions of 2 Pa.C.S. The Secretary of

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1

Education's notice to resolve audit findings shall be sent to

2

the community college in writing. The Secretary of Education may

3

resolve the audit findings by reducing the disallowed costs

4

related thereto in whole or in part.

5

(3)  The Secretary of Education's notice to resolve an audit

6

finding by reducing or eliminating the disallowed costs must be

7

made contingent upon the community college developing and

8

implementing a corrective action plan to address the audit

9

finding. The community college must submit a corrective action

10

plan to the Secretary of Education within 60 business days after

11

receipt of the Secretary of Education's written notice to

12

resolve the audit finding. The Secretary of Education shall

13

approve, reject or alter the plan submitted by the community

14

college within thirty (30) days of submission. After the

15

community college receives written notice of approval or agrees

16

in writing to the Secretary of Education's alterations of the

17

corrective action plan, said plan shall be implemented and shall

18

be binding on the community college. Implementation of the

19

approved or agreed upon corrective action plan will be verified

20

by an audit conducted by the department no later than the end of

21

the fiscal year following the fiscal year during which the plan

22

is implemented. If no agreed upon corrective action plan is in

23

place within one year after the date of the Secretary of

24

Education's written notice to resolve audit findings or if the

25

agreed upon corrective action has not been implemented within

26

one year after the date of the Secretary of Education's written

27

notice to resolve the audit findings, then the Secretary of

28

Education is authorized to adjust payments to the community

29

college to collect any amounts due based upon the findings

30

contained in the audit report that was issued to the college by

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1

the commissioner.

2

(4)  The department shall deduct any amounts due the

3

Commonwealth as a result of audit findings that are resolved

4

under this subsection from any future payment due to the

5

community college from the Commonwealth. The Secretary of

6

Education is authorized to approve a payment schedule in cases

7

where immediate repayment of the full amount due the

8

Commonwealth would jeopardize the ability of the community

9

college to continue operations.

10

(5)  Resolution authority provided to the Secretary of

11

Education in this subsection shall be limited to disallowed cost

12

findings relating to policy and/or administrative practices. The

13

resolution authority shall not be used for audit findings in

14

which the audited community college data and documentation is in

15

error, where a violation of applicable law or regulation is

16

found or where criminal violations are suspected by the

17

Commonwealth auditors and brought to the Secretary of

18

Education's attention in writing. Notwithstanding the

19

limitations of this subsection, until June 30, 1995, the

20

Secretary of Education is authorized to resolve audit findings

21

involving disallowed costs for fiscal years prior to and

22

including 1992-1993 when such disallowed costs result from

23

violation of regulations.

24

(6)  The department, through the Secretary of Education, is

25

authorized to issue guidelines for the operation of the

26

community college educational and financial programs. The

27

department shall amend these guidelines on an annual basis to

28

reflect the department's position on issues that require

29

resolution under this subsection.

30

(7)  The provisions of subsection (d) are repealed insofar as

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1

they are inconsistent with the provisions of this subsection.

2

(k.1)  (1)  By January 1, 2007, and January 1 of each year

3

thereafter, a community college shall submit to the department

4

an audited financial statement for the immediately preceding

5

fiscal year. The audited financial statement shall be consistent

6

with the generally accepted accounting principles prescribed by

7

the National Association of College and University Business

8

Officers or its successor, by the American Institute of

9

Certified Public Accountants or its successor or by any other

10

recognized authoritative body and consistent with the financial

11

reporting policies and standards promulgated by Federal

12

Government and State government which apply to community

13

colleges, provided that an audited financial statement shall not

14

be acceptable if the audit is conducted by an employe or member

15

of the board of trustees of the community college or by an

16

organization or firm associated with any employe or member of

17

the board of trustees of the community college. The Department

18

of Education may withhold funds appropriated to community

19

colleges as necessary to ensure that audit reports are submitted

20

in the prescribed fashion.

21

(2)  The audited financial statement required under clause

22

(1) shall include:

23

(i)  results of the tests of the community college's

24

accounting records and other procedures that are considered

25

necessary to enable the independent certified public accountant

26

to express an opinion as to whether the community college's

27

financial statements are fairly presented, in all material

28

respects, consistent with the accounting principles set forth in

29

clause (1);

30

(ii)  a schedule of operating expenses that presents all

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1

operating expenses pertaining to the community college's

2

educational program; and

3

(iii)  a verification of equivalent full-time students

4

enrolled in the community college in each of the following

5

categories: credit, noncredit and each economic development

6

stipend category, during the fiscal year for which the audited

7

financial statement is presented.

8

(3)  The department shall review the audited financial

9

statement of a community college to determine whether the State

10

funds allocated to the community college have been expended in

11

accordance with the accounting principles set forth in clause

12

(1). The department shall have ninety (90) days from the receipt

13

of an audited financial statement to review the audited

14

financial statement and notify the community college of any

15

material failure to meet the requirements of this subsection.

16

(4)  A community college that receives notice from the

17

department under clause (3) shall have ninety (90) days from the

18

receipt of such notice to submit a corrective action plan to the

19

department.

20

(5)  The department shall approve, reject or alter the

21

corrective action plan within thirty (30) days of submission.

22

After the community college receives written notice of approval

23

of the corrective action plan or agrees in writing to the

24

department's alterations of the corrective action plan, the plan

25

shall be implemented and binding on the community college.

26

Implementation of the approved or agreed-upon corrective action

27

plan shall be verified by an audit conducted by the department

28

no later than the end of the fiscal year following the fiscal

29

year during which the plan is implemented. If no agreed-upon

30

corrective action plan is in place within one year after the

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1

date of the department's written notice under clause (4) or if

2

the agreed-upon corrective action plan has not been implemented

3

within one year after the date of the department's written

4

notice under clause (4), then the department shall adjust

5

payments to the community college to collect any amounts due

6

based upon the findings contained in the audit report.

7

(6)  The State Board of Education shall promulgate final-

8

omitted regulations pursuant to the act of June 25, 1982 (P.L.

9

633, No.181), known as the "Regulatory Review Act," as necessary

10

to implement this subsection.

11

(l)  For the fiscal year 1992-1993, if insufficient funds are

12

appropriated to make Commonwealth payments pursuant to this

13

section, such payments shall be made on a pro rata basis.

14

Section 3.  The act is amended by adding a section to read:

15

Section 1919-A.  Community College Nonmandated Capital

16

Fund.--(a)  The Community College Deferred Maintenance Fund is

17

established as a separate fund in the State Treasury.

18

(b)  The sources of the fund are as follows:

19

(1)  Reimbursements repaid by community colleges to the

20

Commonwealth pursuant to audits under section 1913-A and

21

regulations under that section.

22

(2)  Appropriations.

23

(3)  Earnings on money in the fund.

24

(c)  The fund shall be used for deferred maintenance projects

25

in community colleges. Guidelines for disbursement shall be

26

developed by the Department of Education in consultation with

27

community colleges.

28

(d)  The money in the fund is continuously appropriated to

29

the fund and shall not lapse at the end of any fiscal year.

30

Section 4.  The following provisions of 22 Pa.Code are

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1

abrogated:

2

(1)  35.61(f)(2).

3

(2)  335.22(3).

4

Section 5.  This act shall take effect in 60 days.

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