PA 17-63—sSB 870
Higher Education and Employment Advancement Committee
AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE BOARD OF REGENTS FOR HIGHER EDUCATION
SUMMARY: Beginning in FY 18, this act authorizes the UConn and Connecticut State University System (CSUS) foundations to invest state funds, which the Office of Higher Education (OHE) deposits into its Endowed Chair Investment Fund, to benefit endowed chairs at their respective institutions (§ 7). Under prior law, the state treasurer invested these funds.
The act also reassigns the following duties from the Board of Regents for Higher Education (BOR) to OHE:
1. administering various grant and loan forgiveness programs (§§ 2-4),
2. publishing information about public technical high school and higher education academic programs related to green jobs (§ 5), and
3. researching and developing new programs and methods for academic fields relating to public education (§ 1).
It eliminates the requirement that BOR and UConn annually report to the Education Committee on a joint use plan for a higher education center at Naugatuck Valley Community College (§ 6).
Additionally, the act repeals a requirement that BOR promulgate regulations for determining financial need for tuition waivers (§ 9) and transfers from BOR to the UConn board of trustees the requirement to establish an endowed chair in infectious diseases at the UConn Health Center (§ 8).
It also makes technical and conforming changes.
EFFECTIVE DATE: Upon passage, except the provisions affecting the Endowed Chair Investment Fund and the endowed chair in infectious diseases take effect July 1, 2017.
ENDOWED CHAIR INVESTMENT FUND
By law, OHE may establish and administer the Endowed Chair Investment Fund, which contains $500,000 to $1 million in state funds for each matching contribution privately raised by UConn or CSUS for an endowed chair. OHE must approve applications for these endowed chair positions prior to transferring state funds to the institutions' foundations. Interest earned on the funds invested by the state treasurer supports the endowed chair.
Transfer and Investment of State Funds (§ 7)
Beginning in FY 18, the act allows the foundations to use an alternative investment method for the state funds deposited by OHE. Under the act, either:
1. OHE, on the foundations' request for each approved endowed chair, must transfer these funds to the foundations for the foundations to invest themselves or
2. as under prior law, the state treasurer invests these funds and allocates the interest earned on them to the foundations on request. (The act specifies that this is an annual allocation.)
Under either investment method, the act maintains the requirement under prior law that the foundations use any interest income earned on the state funds to support their respective endowed chairs.
Under the act, foundations that request a transfer of state funds from OHE for the purpose of their own investment must do the following:
1. account for these funds separately from the private matching contributions,
2. hold them as a permanently restricted asset for the endowed chair, and
3. manage them in accordance with the Connecticut Uniform Prudent Management of Institutional Funds Act (UPMIFA, see BACKGROUND) and in a manner consistent with their own investment and expenditure policies.
Under the act, when the market value of the state funds is less than the principal value at the close of the fiscal year, the foundation (1) may not use any interest income earned to support an endowed chair and (2) must restore the principal balance to its original amount. (It is unclear whether this restoration must occur at the close of the fiscal year or at the beginning of the following fiscal year.)
Reporting Requirements (§ 7)
The act requires the UConn and CSUS boards of trustees to submit an annual report to OHE and the Higher Education and Employment Advancement Committee about their management of their endowed chair funds. It does not specify the date when the first report is due.
Under existing law, unchanged by the act, for foundations that choose to receive only the interest from state funds invested by the state treasurer, the report must include endowed chair expenditures.
For foundations that choose to receive state funds to invest themselves, the report must include (1) expenditures; (2) the balance of state funds and non-state matching contributions in each of the two previous fiscal years; and (3) the amount of interest income earned for the state funds and non-state matching contributions for the previous fiscal year.
DUTIES REASSIGNED FROM BOR TO OHE
Grant and Loan Forgiveness Program Administration (§§ 2-4)
The act reassigns administration of the following grant and loan forgiveness programs from BOR to OHE: (1) Engineering Connecticut; (2) You Belong; and (3) the Connecticut Green Technology, Life Science, and Health Information Technology Loan Reimbursement Program (see BACKGROUND).
Green Jobs Requirements (§ 5)
The act also requires OHE, rather than BOR, in consultation with the State Department of Education, to annually prepare and publish the following on its website: (1) a list of every green jobs course, certificate, and degree program offered by technical high schools and public higher education institutions and (2) an inventory of green jobs-related equipment used by such schools and institutions.
Public Education Research and Program Development (§ 1)
The act transfers from BOR to OHE the responsibility for gathering information on new programs and education methods being developed in public schools and colleges in Connecticut and nationwide. Under the act, OHE must maintain current records of this information and publicize it, as well as use the information to encourage and help develop new and improved programs and education methods in order to recruit, prepare, and train or retrain personnel for these programs.
Connecticut Uniform Prudent Management of Institutional Funds Act (UPMIFA)
State law requires state college- or university-affiliated foundations to establish and adhere to an investment and spending policy consistent with the Connecticut UPMIFA (CGS § 4-37f (10)(D)).
UPMIFA applies to institutions, which are defined as entities organized and operated exclusively for charitable purposes; government or governmental subdivisions, agencies, or instrumentalities, to the extent that they hold funds exclusively for a charitable purpose; and trusts that had both charitable and non-charitable interests, after all non-charitable interests have terminated (CGS §§ 45a-535 to 45a-535i).
This program provides student loan reimbursement grants to individuals who graduated from higher education institutions with undergraduate or graduate degrees in engineering, are employed in Connecticut as engineers, and satisfy certain other eligibility requirements (CGS § 10a-19e).
This program provides student loan reimbursement grants to doctoral program graduates employed in Connecticut in economically valuable fields, as determined by the Department of Economic and Community Development (CGS § 10a-19f).
Connecticut Green Technology, Life Science, and Health Information Technology Loan Reimbursement Program
This program reimburses federal and state educational loans up to a specified amount for state residents who graduated with an associate or bachelor's degree in a related field on or after May 1, 2010, and have been employed in Connecticut in one of these fields for at least two years after graduation (CGS § 10a-19i).