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                                                       PRINTER'S NO. 666

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 564 Session of 2003


        INTRODUCED BY BUNT, DeWEESE, HARPER, CURRY, BARD, BELFANTI,
           CAPPELLI, CIVERA, CLYMER, DAILEY, DALEY, DALLY, FREEMAN,
           GODSHALL, HARHART, HENNESSEY, HERMAN, HORSEY, JAMES, JOSEPHS,
           LaGROTTA, LAUGHLIN, LEH, MANN, MARKOSEK, NAILOR, ROSS,
           RUBLEY, SAYLOR, SEMMEL, E. Z. TAYLOR, THOMAS, TRAVAGLIO,
           TURZAI, VANCE, WEBER, WILT, YOUNGBLOOD, YUDICHAK, WASHINGTON
           AND ROEBUCK, MARCH 3, 2003

        REFERRED TO COMMITTEE ON EDUCATION, MARCH 3, 2003

                                     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 Nonmandated Capital 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
    12  (P.L.30, No.14), known as the Public School Code of 1949, added
    13  July 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


     1  necessary to provide for the establishment, operation and
     2  maintenance of community colleges, including minimum
     3  requirements for physical facilities and equipment, curriculum,
     4  faculty, standards and professional requirements, qualifications
     5  for admission and advancement of students, student enrollment,
     6  student population of the area to be served by the community
     7  college, requirements for satisfactory completion of a two-year
     8  program and the degrees or diplomas or certificates to be
     9  awarded therefor, means of financing and financial resources for
    10  the establishment and support of the community college, and all
    11  matters necessary to effectuate the purposes of this act.
    12     (2)  To approve or disapprove plans for the establishment or
    13  operation of a community college.
    14     (3)  To approve or disapprove petitions of school districts
    15  or municipalities applying for participation in an established
    16  community college. No petition may be approved unless it is
    17  accompanied by the consent of the governing bodies of the
    18  majority of the members of the local sponsor of the established
    19  community college to the participation of the petitioning school
    20  district or municipality.
    21     (b)  In determining such policies, standards, rules and
    22  regulations, the State Board of Education may consider relevant
    23  all minimum requirements established by statute or by regulation
    24  with respect to the State colleges and universities of the
    25  Commonwealth and may consider relevant such minimum requirements
    26  established by statute or by regulation with respect to
    27  secondary and special education programs in the school district
    28  or districts of the area to be served by the community college.
    29  Regulations promulgated under this article shall take effect at
    30  the beginning of the school year following promulgation.
    20030H0564B0666                  - 2 -     

     1     (c)  In approving or disapproving such plans, the State Board
     2  of Education shall consider the needs of areas adjacent to the
     3  areas to be served by the community college and of the State
     4  with respect to higher education and long range plans therefor
     5  established by the State Board of Education. Other school
     6  districts and municipalities may petition the State Board of
     7  Education to become a part of a local sponsor as hereafter in
     8  this act provided.
     9     (d)  No plan for the establishment of a community college
    10  shall be approved unless the State Board of Education determines
    11  that the local sponsor has a population of a sufficient number
    12  to assure a sustained minimum enrollment, has sufficient wealth
    13  to financially support such college and is not adequately served
    14  by established institutions of higher learning. No plan for the
    15  establishment of a community college shall be approved unless it
    16  contains an estimate of operating cost for administration,
    17  instruction, operation and maintenance and such other accounts
    18  as the State Board of Education may, from time to time,
    19  determine. No plan for the establishment of a community college
    20  shall be approved unless it contains an estimate of any proposed
    21  capital improvements for the next following ten years.
    22     (e)  To confer with and obtain the approval of the Governor's
    23  Office as to the number of community colleges which can be
    24  approved for participation during the ensuing fiscal period.
    25     (f)  Wherever in this act the approval of the State Board of
    26  Education is required in any matter, the State Board of
    27  Education may require the Department of Education to make and
    28  report its findings and recommendations on such matter to the
    29  Council of Higher Education for the formulation of policies,
    30  standards, rules and regulations for consideration by the State
    20030H0564B0666                  - 3 -     

     1  Board of Education.
     2     Section 2.  Section 1913-A of the act, amended or added July
     3  1, 1985 (P.L.103, No.31), October 20, 1988 (P.L.827, No.110),
     4  June 7, 1993 (P.L.49, No.16) and June 22, 2001 (P.L.530, No.35),
     5  is amended to read:
     6     Section 1913-A.  Financial Program; Reimbursement of
     7  Payments.--(a)  The plan submitted by the local sponsor shall
     8  set forth a financial program for the operation of the community
     9  college. The plan shall provide that the local sponsor shall
    10  appropriate or provide to the community college an amount at
    11  least equal to the community college's annual operating costs
    12  less the student tuition as determined in section 1908-A(a) less
    13  the Commonwealth's payment as determined in subsection (b)(1) of
    14  this section. The plan shall also provide that one-half of the
    15  annual capital expenses shall be appropriated or provided by the
    16  local sponsor to the community college. The local sponsor's
    17  appropriation for annual operating costs and annual capital
    18  expenses may in part be represented by real or personal property
    19  or services made available to the community college. The plan
    20  shall indicate whether the appropriation shall come from general
    21  revenues, loan funds, special tax levies or from other sources,
    22  including student tuitions.
    23     (b)  (1)  The Commonwealth shall pay to a community college
    24  on behalf of the sponsor on account of its operating costs
    25  during the fiscal year from funds appropriated for that purpose
    26  an amount equal to:
    27     (i)  for the 1993-1994 fiscal year through the 2000-2001
    28  fiscal year, the lesser of such college's variable State share
    29  ceiling as determined in clause (1.3) or such college's
    30  equivalent full-time student reimbursement as determined in
    20030H0564B0666                  - 4 -     

     1  clause (1.4); and
     2     (ii)  for the 2001-2002 fiscal year and each fiscal year
     3  thereafter, the college's equivalent full-time student
     4  reimbursement as determined in clause (1.4).
     5     (1.2)  The Secretary of Education, in consultation with the
     6  community colleges, shall promulgate standards for credit
     7  courses and for noncredit courses that will be eligible for
     8  Commonwealth reimbursement. The standards shall specifically
     9  exclude from eligibility for reimbursement any course or program
    10  in avocational or recreational pursuits. The standards shall be
    11  promulgated by the beginning of the 1994-1995 fiscal year. Until
    12  such standards are promulgated, no community college will be
    13  reimbursed for any credit course which was offered by such
    14  college as a noncredit course during the college's 1992-1993
    15  fiscal year.
    16     (1.3)  The variable State share ceiling of a community
    17  college shall be determined as follows:
    18     (i)  Subtract the taxable income per person of the local
    19  sponsor from the highest taxable income per person of any county
    20  in the Commonwealth.
    21     (ii)  Divide the amount determined under subclause (i) by the
    22  difference between the highest taxable income per person of any
    23  county in the Commonwealth and the lowest taxable income per
    24  person of any county in the Commonwealth.
    25     (iii)  Multiply the quotient determined under subclause (ii)
    26  by one-sixth.
    27     (iv)  Add one-third to the product determined under paragraph
    28  (iii).
    29     (v)  Multiply the sum determined under subclause (iv) by the
    30  community college's operating costs in the year for which
    20030H0564B0666                  - 5 -     

     1  reimbursement is being claimed.
     2     (vi)  The taxable income per person data used in the
     3  preceding calculation shall be data certified to the Secretary
     4  of Education by the Secretary of Revenue under section 2501(9.1)
     5  for school district local sponsors or data otherwise published
     6  by the Secretary of Revenue for a municipal local sponsor.
     7     (1.4)  The equivalent full-time student reimbursement of a
     8  community college shall be the sum of credit course, noncredit
     9  course and stipend reimbursements. These reimbursements shall be
    10  calculated using a reimbursement factor of one thousand and
    11  forty dollars ($1,040) for the 1993-1994 fiscal year, of one
    12  thousand eighty dollars ($1,080) for the 1994-1995 fiscal year
    13  and of one thousand one hundred eighty dollars ($1,180) for the
    14  1995-1996 fiscal year and one thousand and two hundred and ten
    15  dollars ($1,210) for the 1996-1997 fiscal year and one thousand
    16  two hundred sixty dollars ($1,260) for the 1997-1998 fiscal year
    17  and the 1998-1999 fiscal year and one thousand three hundred
    18  dollars ($1,300) for the 1999-2000 fiscal year and one thousand
    19  four hundred dollars ($1,400) for the 2000-2001 fiscal year and
    20  one thousand five hundred dollars ($1,500) for the 2001-2002
    21  fiscal year and for each year thereafter and shall be determined
    22  as follows:
    23     (i)  Credit course reimbursement shall be calculated by
    24  multiplying the reimbursement factor by the number of equivalent
    25  full-time students enrolled in credit courses as determined by
    26  an audit to be made in a manner prescribed by the State Board of
    27  Education. The following apply:
    28     (A)  Course enrollment is to be determined by the standards
    29  of the community college.
    30     (B)  Computer-based documentation or paper-based
    20030H0564B0666                  - 6 -     

     1  documentation may be used to verify enrollment.
     2     (C)  Enrollment in a program of study is to be determined
     3  solely by the declaration of the student.
     4     (ii)  Noncredit course reimbursement shall be calculated as
     5  follows:
     6     (A)  [eighty] Eighty percent (80%) of the reimbursement
     7  factor multiplied by the number of equivalent full-time students
     8  enrolled in eligible noncredit courses for the 1993-1994 fiscal
     9  year, as determined by the audit referred to in paragraph
    10  (i)[;].
    11     (B)  [seventy] Seventy percent (70%) of the reimbursement
    12  factor multiplied by the number of equivalent full-time students
    13  enrolled in eligible noncredit courses for the 1994-1995 fiscal
    14  year and for each year thereafter, as determined by the audit
    15  referred to in paragraph (i)[; or].
    16     (C)  [one] One hundred percent (100%) of the reimbursement
    17  factor multiplied by the number of equivalent full-time students
    18  enrolled in eligible noncredit public safety courses that
    19  provide training for volunteer firefighters and emergency
    20  medical services for the 1995-1996 fiscal year and for each year
    21  thereafter, as determined by the audit referred to in paragraph
    22  (i).
    23     (D)  A noncredit course is eligible for reimbursement if any
    24  of the following apply:
    25     (I)  The course is in the area of public safety; adult basic
    26  education or adult literacy; occupational skills; academics; or
    27  a program for certification in accordance with standards
    28  established by statute, regulation or appropriate industry.
    29     (II)  Regardless of whether the instructor's compensation is
    30  paid directly by the community college or paid by an entity that
    20030H0564B0666                  - 7 -     

     1  contracts with the community college, the community college is
     2  responsible for selecting; supervising; and, if appropriate,
     3  dismissing the instructor.
     4     (E)  Course enrollment is to be determined by the standards
     5  of the community college.
     6     (iii)  Stipend reimbursement on account of a community
     7  college's operating costs for all equivalent full-time students
     8  enrolled in the following categories of two-year or less than
     9  two-year occupational or technical programs, shall be the sum of
    10  the following:
    11     (A)  One thousand one hundred dollars ($1,100) per full-time
    12  equivalent student enrolled in advanced technology programs. For
    13  the fiscal year 1995-1996, 1996-1997 and 1997-1998, the
    14  reimbursement rate shall be calculated at one thousand one
    15  hundred seventy-five dollars ($1,175) per full-time equivalent
    16  student enrolled in advanced technology programs. For the fiscal
    17  year 1998-1999 and each year thereafter, the reimbursement rate
    18  shall be calculated at one thousand four hundred sixty dollars
    19  ($1,460) per full-time equivalent student enrolled in advanced
    20  technology programs. Advanced technology programs are programs
    21  using new or advanced technologies which hold promise for
    22  creating new job opportunities, including such fields as
    23  robotics, biotechnology, specialized materials and engineering
    24  and engineering-related programs.
    25     (B)  One thousand dollars ($1,000) per full-time equivalent
    26  student enrolled in programs designated as Statewide programs.
    27  For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the
    28  reimbursement rate shall be calculated at one thousand seventy-
    29  five dollars ($1,075) per full-time equivalent student enrolled
    30  in programs designated as Statewide programs. For the fiscal
    20030H0564B0666                  - 8 -     

     1  year 1998-1999 and each year thereafter, the reimbursement rate
     2  shall be calculated at one thousand three hundred sixty dollars
     3  ($1,360) per full-time equivalent student enrolled in programs
     4  designated as Statewide programs. A Statewide program is a
     5  program which meets one or more of the following criteria:
     6     (I)  Program enrollment from out-of-sponsor area is twenty
     7  per cent or more of the enrollment for the program.
     8     (II)  A consortial arrangement exists with another community
     9  college to cooperatively operate a program or share regions in
    10  order to avoid unnecessary program duplication.
    11     (C)  Five hundred dollars ($500) per full-time equivalent
    12  student enrolled in other occupational or technical programs.
    13  For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the
    14  reimbursement rate shall be calculated at five hundred seventy-
    15  five dollars ($575) per full-time equivalent student enrolled in
    16  other occupational or technical programs. For the fiscal year
    17  1998-1999 and each year thereafter, the reimbursement rate shall
    18  be calculated at eight hundred sixty dollars ($860) per full-
    19  time equivalent student enrolled in other occupational or
    20  technical programs.
    21     (2)  For the 1993-1994 fiscal year, each community college
    22  shall be reimbursed under clause (1) in an amount which is at
    23  least equal to a one percent (1%) increase over its 1992-1993
    24  operating cost and stipend reimbursement. In no case shall a
    25  community college's 1993-1994 reimbursement under clause (1) per
    26  full-time equivalent student, insofar as said reimbursement does
    27  not include a proportionate share attributable to stipend
    28  reimbursement under clause (1.4)(iii), exceed its 1992-1993
    29  operating cost reimbursement per full-time equivalent student by
    30  more than ten percent (10%).
    20030H0564B0666                  - 9 -     

     1     (2.1)  For the 1994-1995 fiscal year, each community college
     2  shall be reimbursed under clause (1) in an amount which is at
     3  least equal to a one percent (1%) increase over its 1993-1994
     4  reimbursement under clause (1). In no case shall a community
     5  college's 1994-1995 reimbursement under clause (1) per full-time
     6  equivalent student, insofar as said reimbursement does not
     7  include the proportionate share attributable to stipend
     8  reimbursement under clause (1.4)(iii), exceed its 1993-1994
     9  reimbursement under clause (1) per full-time equivalent student,
    10  insofar as said reimbursement does not include the proportionate
    11  share attributable to stipend reimbursement under clause
    12  (1.4)(iii) by more than ten percent (10%).
    13     (2.2)  For the 1995-1996 fiscal year, each community college
    14  shall be reimbursed under clause (1) in an amount which is at
    15  least equal to its 1994-1995 reimbursement under clause (1).
    16     (3)  The [Secretary] Department of Education [annually] shall
    17  [establish] promulgate regulations establishing criteria to be
    18  used to determine eligibility of programs for each of the above
    19  stipend categories[,]. The department shall approve programs for
    20  funding [in the following fiscal year] according to these
    21  [criteria and] regulations. The Secretary of Education shall
    22  submit to chairmen of the committees of education in the House
    23  of Representatives and Senate a report setting forth [the
    24  established criteria,] any programs approved for funding under
    25  these [criteria] regulations and the recipient community
    26  colleges.
    27     (4)  Each community college shall maintain such accounting
    28  and student attendance records on generally accepted auditing
    29  principles and standards [as will lend themselves to
    30  satisfactory audit]. Beginning with the 2003-2004 fiscal year
    20030H0564B0666                 - 10 -     

     1  and each year thereafter, the department must complete an audit
     2  of a community college for a school year within one year after
     3  the completion of that school year. If the department does not
     4  meet the time requirement of this clause, the community college
     5  affected shall be required to forfeit reimbursement only for an
     6  intentional violation or for a violation of previously cited and
     7  resolved findings. The Commonwealth shall pay to a community
     8  college on behalf of the sponsor on account of its capital
     9  expenses an amount equal to one-half of such college's annual
    10  capital expenses from funds appropriated for that purpose to the
    11  extent that said capital expenses have been approved as herein
    12  provided.
    13     (5)  For purposes of determining Commonwealth reimbursement
    14  of operating costs, Federally funded expenditures for those
    15  programs in which the Commonwealth participates in the cost
    16  shall be deducted from total operating expenditures to determine
    17  net reimbursable operating costs.
    18     (c)  Capital expenses shall mean only such expenses as are
    19  incurred with the approval of the Department of Education for
    20  amortization of the purchase of lands; purchase, construction or
    21  improvement of buildings for administrative and instructional
    22  purposes, including libraries; the lease of lands or buildings,
    23  or for rentals to an authority for the same purpose; and for the
    24  purchase, lease or rental of capital equipment and furniture
    25  used for instructional or administrative purposes. Capital
    26  expenses shall include library books and complementary audio-
    27  visual equipment purchased during the first five years after
    28  establishment. For the purpose of calculating the Commonwealth's
    29  share of operating, and capital costs incurred prior to the
    30  actual admission of students to a community college, all such
    20030H0564B0666                 - 11 -     

     1  costs shall be interpreted as capital costs. No costs and
     2  expenses incurred in the establishment, construction, operation
     3  or maintenance of dormitories, or the equipment or furnishings
     4  for such purposes, shall be included in capital expenses or
     5  operating costs for purposes of Commonwealth reimbursement. The
     6  provisions of this subsection shall not prevent the Commonwealth
     7  from reimbursing a community college for capital expenses
     8  incurred prior to the effective date of this act. Such
     9  reimbursement must have approval of the Secretary of Education.
    10     (d)  The State Board of Education shall adopt policies,
    11  standards, rules and regulations for determining reimbursable
    12  capital expenses and operating costs, and the Department of
    13  Education shall approve such expenses and costs for the purpose
    14  of reimbursement by the Commonwealth.
    15     (e)  The State Board of Education shall apply for, receive
    16  and administer, subject to any applicable regulations or laws of
    17  the Federal Government or any agency thereof, any Federal
    18  grants, appropriations, allocations and programs to fulfill the
    19  purpose of this act.
    20     (f)  All administrative personnel, faculty, and other
    21  employes of the community colleges in the Commonwealth shall be
    22  eligible for inclusion in the Public School Employees'
    23  Retirement System of Pennsylvania, the Pennsylvania State
    24  Employees' Retirement System, or any independent retirement
    25  program approved by the Board of Trustees of a community
    26  college, and the Secretary of Education.
    27     (g)  The community college in the Commonwealth shall be
    28  eligible for participation in the act of July 5, 1947 (P.L.1217,
    29  No.498), known as the "State Public School Building Authority
    30  Act," and [the act of May 2, 1945 (P.L.382, No.164), known as
    20030H0564B0666                 - 12 -     

     1  the "Municipality Authorities Act of 1945."] 53 Pa.C.S. Ch. 56
     2  (relating to municipal authorities).
     3     (h)  In all cases where the board of trustees of any
     4  community college fails to pay or provide for the payment of any
     5  rental or rentals due the State Public School Building Authority
     6  or any municipality authority for any period in accordance with
     7  the terms of any lease entered into between the board of
     8  trustees of any community college and the State Public School
     9  Building Authority or any municipality authority, or fails to
    10  pay or to provide for the payment of any other indebtedness when
    11  due, upon written notice thereof from the State Public School
    12  Building Authority or any municipality authority, or in such
    13  cases where an audit reveals any unpaid indebtedness due, the
    14  Secretary of Education shall notify the board of trustees of its
    15  obligation and shall withhold out of any State appropriation
    16  that may be due to such community college an amount equal to the
    17  amount of rental or rentals owing by such board of trustees to
    18  the State Public School Building Authority or any municipality
    19  authority, or an amount equal to the amount of any other
    20  indebtedness owing by such board of trustees, and shall pay over
    21  the amount or amounts so withheld to the State Public School
    22  Building Authority or any municipality authority or to
    23  whomsoever any other indebtedness is due and owing.
    24     (i)  The amount payable to each community college Board of
    25  Trustees on behalf of the sponsor shall be paid in the year in
    26  which the costs and expenses are incurred in quarterly
    27  installments and the Secretary of Education shall draw his
    28  requisition quarterly upon the State Treasurer in favor of each
    29  community college for the amount of reimbursement to which it is
    30  entitled. Reimbursement or payment by the Commonwealth for the
    20030H0564B0666                 - 13 -     

     1  operational expenses and capital equipment and the furnishings
     2  shall be made on or before the end of the fiscal quarters ended
     3  on September 30, December 31, March 31 and June 30 of each
     4  Commonwealth fiscal year. Reimbursements or payments shall be
     5  made semi-annually for the Commonwealth's share of the annual
     6  rentals to an authority or the sponsor or sinking fund or debt-
     7  service payments and other leases upon submission of a community
     8  college requisition in the form required by the Commonwealth,
     9  the reimbursement or payment to be made from funds appropriated
    10  for that purpose. Money that is appropriated under this
    11  subsection but not expended by a community college Board of
    12  Trustees shall not be distributed to a local sponsor.
    13     (j)  In no event shall the payments or final reimbursement
    14  made by the department following audit exceed the appropriation
    15  available for community colleges.
    16     (k)  (1)  Unless otherwise prescribed by the State Board of
    17  Education, the Commonwealth's fiscal audits of community
    18  colleges under this section shall be conducted in accordance
    19  with "Government Auditing Standards," latest revision,
    20  promulgated by the United States General Accounting Office.
    21  Written audit reports will be produced and will be sent to the
    22  community college by the Commissioner of Postsecondary/Higher
    23  Education. Any cost disallowed under findings contained in the
    24  audit report shall be considered an adjudication within the
    25  meaning of 2 Pa.C.S. (relating to administrative law and
    26  procedure) and regulations promulgated thereunder.
    27     (2)  The Secretary of Education is hereby specifically
    28  authorized and shall be required to resolve audit findings
    29  involving disallowed costs that are contested by community
    30  colleges except for audit findings that involve mathematical
    20030H0564B0666                 - 14 -     

     1  errors, violation of regulations or alleged illegal activities.
     2  The proposed resolution of the Secretary of Education shall not
     3  be subject to the provisions of 2 Pa.C.S. The Secretary of
     4  Education's notice to resolve audit findings shall be sent to
     5  the community college in writing. The Secretary of Education may
     6  resolve the audit findings by reducing the disallowed costs
     7  related thereto in whole or in part.
     8     (3)  The Secretary of Education's notice to resolve an audit
     9  finding by reducing or eliminating the disallowed costs must be
    10  made contingent upon the community college developing and
    11  implementing a corrective action plan to address the audit
    12  finding. The community college must submit a corrective action
    13  plan to the Secretary of Education within 60 business days after
    14  receipt of the Secretary of Education's written notice to
    15  resolve the audit finding. The Secretary of Education shall
    16  approve, reject or alter the plan submitted by the community
    17  college within thirty (30) days of submission. After the
    18  community college receives written notice of approval or agrees
    19  in writing to the Secretary of Education's alterations of the
    20  corrective action plan, said plan shall be implemented and shall
    21  be binding on the community college. Implementation of the
    22  approved or agreed upon corrective action plan will be verified
    23  by an audit conducted by the department no later than the end of
    24  the fiscal year following the fiscal year during which the plan
    25  is implemented. If no agreed upon corrective action plan is in
    26  place within one year after the date of the Secretary of
    27  Education's written notice to resolve audit findings or if the
    28  agreed upon corrective action has not been implemented within
    29  one year after the date of the Secretary of Education's written
    30  notice to resolve the audit findings, then the Secretary of
    20030H0564B0666                 - 15 -     

     1  Education is authorized to adjust payments to the community
     2  college to collect any amounts due based upon the findings
     3  contained in the audit report that was issued to the college by
     4  the commissioner.
     5     (4)  The department shall deduct any amounts due the
     6  Commonwealth as a result of audit findings that are resolved
     7  under this subsection from any future payment due to the
     8  community college from the Commonwealth. The Secretary of
     9  Education is authorized to approve a payment schedule in cases
    10  where immediate repayment of the full amount due the
    11  Commonwealth would jeopardize the ability of the community
    12  college to continue operations.
    13     (5)  Resolution authority provided to the Secretary of
    14  Education in this subsection shall be limited to disallowed cost
    15  findings relating to policy and/or administrative practices. The
    16  resolution authority shall not be used for audit findings in
    17  which the audited community college data and documentation is in
    18  error, where a violation of applicable law or regulation is
    19  found or where criminal violations are suspected by the
    20  Commonwealth auditors and brought to the Secretary of
    21  Education's attention in writing. Notwithstanding the
    22  limitations of this subsection, until June 30, 1995, the
    23  Secretary of Education is authorized to resolve audit findings
    24  involving disallowed costs for fiscal years prior to and
    25  including 1992-1993 when such disallowed costs result from
    26  violation of regulations.
    27     (6)  The department, through the Secretary of Education, is
    28  authorized to issue guidelines for the operation of the
    29  community college educational and financial programs. The
    30  department shall amend these guidelines on an annual basis to
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     1  reflect the department's position on issues that require
     2  resolution under this subsection.
     3     (7)  The provisions of subsection (d) are repealed insofar as
     4  they are inconsistent with the provisions of this subsection.
     5     (l)  For the fiscal year 1992-1993, if insufficient funds are
     6  appropriated to make Commonwealth payments pursuant to this
     7  section, such payments shall be made on a pro rata basis.
     8     Section 3.  The act is amended by adding a section to read:
     9     Section 1916-A.  Community College Nonmandated Capital
    10  Fund.--(a)  The Community College Nonmandated Capital Fund is
    11  established as a separate fund in the State Treasury.
    12     (b)  The sources of the fund are as follows:
    13     (1)  Reimbursements repaid by community colleges to the
    14  Commonwealth pursuant to audits under section 1913-A and
    15  regulations under that section.
    16     (2)  Appropriations.
    17     (3)  Earnings on money in the fund.
    18     (c)  The fund shall be used for nonmandated capital projects
    19  in community colleges. Guidelines for disbursement shall be
    20  developed by the Department of Education in consultation with
    21  community colleges.
    22     (d)  The money in the fund is continuously appropriated to
    23  the fund and shall not lapse at the end of any fiscal year.
    24     Section 4.  The following provisions of 22 Pa. Code are
    25  abrogated:
    26         (1)  Section 35.61(f)(2).
    27         (2)  Section 335.22(3).
    28     Section 5.  This act shall take effect in 60 days.


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