First Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 13-0754.01 Julie Pelegrin x2700 SENATE BILL 13-121 SENATE SPONSORSHIP Lambert, Hill, Lundberg, Marble, Renfroe, Scheffel HOUSE SPONSORSHIP (None), Senate Committees House Committees Education A BILL FOR AN ACT Concerning fee-for-service contracts between the department of higher education and institutions of higher education. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill repeals language that allows an institution of higher education and the department of higher education (department) to transfer a certain percentage of the spending authority for college opportunity fund stipends for use in spending moneys received through fee-for-service contracts. The department annually enters into fee-for-service contracts with the governing boards of the institutions of higher education to purchase certain education services. The bill specifies that a fee-for-service contract must specify the per-full-time-student amount that the department will pay for the services. The amount must reflect the actual cost of the services provided, cannot change over the term of the contract, and cannot increase or decrease by more than the amount of inflation from year to year. In complying with the annual requirements to report to an assigned committee of reference and the joint budget committee, the department must provide copies of the fee-for-service contracts. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 23-18-202, amend (1) (a) and (1) (c) as follows: 23-18-202. College opportunity fund - appropriations - payment of stipends - reimbursement - repeal. (1) (a) Beginning with the state fiscal year commencing July 1, 2005, and for each state fiscal year thereafter, the general assembly shall make an annual appropriation, in trust for eligible undergraduate students, to the college opportunity fund, which is hereby established as a trust fund account with the Colorado student loan program. Except as provided in paragraph (c) of this subsection (1), Moneys appropriated to the college opportunity fund are for the sole purpose of disbursement on behalf of eligible undergraduate students in accordance with this part 2 and are not for the general operation or any other function of the Colorado student loan program. Any unexpended and unencumbered moneys remaining in the college opportunity fund at the end of a fiscal year are the property of the trust fund and shall remain in the fund and shall not be credited or transferred to the general fund or any other fund. (c) If there are moneys remaining in the college opportunity fund after the final census date of the last academic term of each state fiscal year, as determined in accordance with this section, up to three percent of the amount annually authorized as cash spending authority in the general appropriations act for a governing board to expend stipends received on behalf of eligible undergraduate students may be expended by the same governing board for postsecondary educational services purchased by the department if authorized through a fee-for-service contract entered into pursuant to sections 23-1-109.7 and 23-5-130. The department may transfer an equivalent amount in general fund spending authority from stipends to fee-for-service contracts to fulfill its fee-for-service contract obligations to a governing board pursuant to this paragraph (c) and section 23-5-130. SECTION 2. In Colorado Revised Statutes, amend 23-1-109.7 as follows: 23-1-109.7. Duties and powers of the commission with regard to the provision of educational services. (1) Beginning July 1, 2005, the commission shall be responsible for ensuring the provision of specific postsecondary educational services in the state. These educational services shall include but need not be limited to: (a) Educational services in rural areas or communities in which the cost of delivering such services is not sustained by the amount received in student tuition; (b) to (d) Repealed. (e) Educational services required of the commission to meet its obligations under reciprocal agreements pursuant to section 23-1-112; (f) Graduate school services; (g) Educational services that may increase economic development opportunities in the state, including courses to assist students in career development and retraining; and (h) Specialized educational services and professional degrees, including but not limited to the areas of dentistry, medicine, veterinary medicine, nursing, law, forestry, and engineering and programs that address identified state or national priorities. (2) The department of higher education on behalf of the commission shall annually enter into fee-for-service contracts with one or more governing boards of institutions of higher education to provide the higher education services specified in subsection (1) of this section. The department of higher education may contract with a governing board of an institution of higher education only to the extent that the contract remains consistent with any contract entered into pursuant to section 23-5-129 with the governing board. (2.5) Each fee-for-service contract must be for a one-year term and may be renewed from year to year. Each contract must specify the per-full-time-student amount that the department of higher education agrees to pay to the institution of higher education in exchange for the contracted service. The contract amount: (a) Must reflect the actual cost to the institution of higher education of providing the service; (b) Shall not be adjusted over the term of the contract; and (c) Shall not increase or decrease from year to year by more than the rate of inflation for the applicable fiscal year. (3) The commission shall make annual funding recommendations to the general assembly and the governor regarding the funding necessary for the department of higher education to contract on the commission's behalf for the provision of higher education services in the state, including but not limited to the services specified in subsection (1) of this section. The general assembly shall annually appropriate to the commission an amount of general fund moneys to carry out the purposes of this section. (4) The department, as part of the annual hearing required in section 2-7-203 (2), C.R.S., shall provide to the joint budget committee of the general assembly and to the committee of reference assigned to the department pursuant to section 2-7-203 (1), C.R.S., copies of the fee-for-service contracts that the department enters into pursuant to this section. SECTION 3. In Colorado Revised Statutes, amend 23-5-130 as follows: 23-5-130. Governing boards - fee-for-service contracts - authorization. (1) As used in this section, unless the context otherwise requires: (a) "Commission" shall have the same meaning as provided in section 23-18-102 (3). (b) "Department" shall have the same meaning as provided in section 23-18-102 (4). (c) "State institution of higher education" shall have the same meaning as provided in section 23-18-102 (10). (2) Beginning July 1, 2005, the governing board of a state institution of higher education may annually negotiate a fee-for-service contract with the department for the delivery of higher education services by the institution to the residents of the state of Colorado. These services may include, but need not be limited to: (a) Educational services in rural areas or communities in which the cost of delivering the educational services is not sustained by the amount received in student tuition; (b) to (d) Repealed. (e) Educational services required of the commission to meet its obligations under reciprocal agreements pursuant to section 23-1-112; (f) Graduate school services; (g) Educational services that may increase economic development opportunities in the state, including courses to assist students in career development and retraining; and (h) Specialized educational services and professional degrees, including but not limited to the areas of dentistry, medicine, veterinary medicine, nursing, law, forestry, and engineering and programs that address identified state or national priorities. (3) It is the intent of the general assembly that any institution under the direction and control of a governing board that enters into a fee-for-service contract for basic skills courses not charge a student more for a basic skills course than the student would otherwise pay per credit hour for any general education course. (4) Each fee-for-service contract must be for a one-year term and may be renewed from year to year. Each contract must specify the per-full-time-student amount that the department of higher education agrees to pay to the institution of higher education in exchange for the contracted service. The contract amount: (a) Must reflect the actual cost to the institution of higher education of providing the service; (b) Shall not be adjusted over the term of the contract; and (c) Shall not increase or decrease from year to year by more than the rate of inflation for the applicable fiscal year. SECTION 4. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 7, 2013, if adjournment sine die is on May 8, 2013); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2014 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.