Brief ⁽¹⁾

Senate Sub. for HB 2476 enacts the Kansas Partnership for Faculty of Distinction Program, effective July 1, 2001.

The program, administered by the State Board of Regents, is designed to encourage gifts by private donors to enhance the ability of institutions to attract and retain faculty of distinction. The state would contribute income earnings equivalent awards to supplement the endowed professorships.

Eligible institutions include: any state educational institution, municipal university, community college, technical college, or vocational education institution under the governance or coordination of the Board of Regents.

"Qualifying gift" means either a single monetary donation from a single donor or entity or a joint monetary donation from two or more donors or entities that are directly related or associated and that is received by an institution's endowment association for the purpose of endowing a professorship at the eligible institution. Minimum eligible qualifying gifts vary by institution:

• $50,000 for community colleges, technical colleges, and vocational education institutions;



• $200,000 for Fort Hays State University, Emporia State University, Pittsburg State University, and Washburn University;



• $350,000 for Wichita State University; and



• $500,000 for the University of Kansas and Kansas State University.

The income earnings equivalent award for an endowed professorship is to be determined by the Director of Accounts and Reports and is to be the amount of interest earnings that the amount of the qualifying gift would have earned at the average net earnings rate of the Pooled Money Investment Board portfolio for the period for which the determination is being made.

Each eligible institution would establish a faculty of distinction matching fund, with a separate account for each endowed professorship.

The Chief Executive Officer of the institution is required to notify the Board of Regents when a qualifying gift is received; the Board would determine whether the gift qualifies, and would certify to the Director of Accounts and Reports the amount and date of receipt of the gift and the endowed professorship account established.

On July 1 of the fiscal year following certification of receipt of a qualifying gift, the Director of Accounts and Reports is required to transfer the amount determined to be the earnings equivalent award for such qualifying gift for the period of time between the date of certification and the first day of the ensuing fiscal year from the State General Fund to either:

• The endowed professorship account of the faculty of distinction matching fund in the case of a state educational (Regents) institution; or



• The faculty of distinction program fund of the Board of Regents in the case of other qualifying institutions.

The transfer shall be considered a demand transfer from the State General Fund.

The total amount of new qualifying gifts which may be certified for any fiscal year is capped at $30.0 million; the total for any one qualifying institution is capped at $10.0 million; and the State General Fund earnings equivalent award is capped at $5.0 million for a fiscal year.

The Chief Executive Officer of each institution would be required to provide a salary and full-time position for the endowed professorship and to provide to the Board of Regents an annual accounting of the amounts and purposes of all expenditures of moneys transferred to the Faculty of Distinction matching fund at each institution.

The Board of Regents is required to develop and conduct an ongoing assessment of the program on or before the first day of the fiscal year during which the total State General Fund demand transfer is greater than or equal to $4.0 million. The assessment would be presented to the Legislature at the beginning of each regular session and would include evaluations of:

• The effectiveness of the program to increase private gifts and attract and retain professors to distinction;



• The economic impact of the program on the institution and the state; and



• Other appropriate factors determined by the Board of Regents.

The Board of Regents estimates a first year fiscal note ranging from $202,000 to $1.6 million from the State General Fund. The lower amount is based on each of the 37 eligible institutions receiving the minimum qualifying gift amount at a Pooled Money Investment Board rate of 5.46 percent; the higher amount is based on the $30.0 million annual cap contained in the bill. Over time, the annual $5.0 million cap on transfers would probably be reached. Based on the effective date of July 1, 2001, fiscal impact of the bill would be deferred until FY 2003.

Background

Conferees appearing in support of HB 2476 included representatives of the Board of Regents, the Kansas Association of Community Colleges, Washburn University, and the Kansas Cooperative Council. There were no opponents to the bill.

Compared to HB 2476 as passed by the House, the substitute bill recommended by the Senate Ways and Means Committee expands the application of the program to municipal universities, community colleges, technical colleges, and vocational education schools; imposes the cap on the total dollar demand on the State General Fund; changes the interest earnings transfer date to July 1 and makes the State General Fund transfer a demand transfer; and adds the requirement of program evaluation by the Board of Regents once the amount transferred annually under the program reaches $4.0 million.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html