STATUS OF COMMUNITY COLLEGE 'PREP' REVENUES

COMMUNITY COLLEGES ‑- FEES ‑- BUDGET LAW ‑- STATUS OF COMMUNITY COLLEGE "PREP" REVENUES

(1) Revenues of a community college from the operation of a predischarge education program (PREP) under RCW 28B.50.092 do not constitute tuition revenues payable into the state general fund under RCW 28B.50.360; however, they are subject to the requirements of the state budget law under RCW 28B.50.320.

(2) A community college district may not engage in a PREP operation by means of a contract to provide educational services to a private nonprofit corporation formed for that purpose which will, in turn, contract with the military personnel who are to receive the services.

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                                                                 January 13, 1975

Honorable Robert V. Graham
State Auditor
Legislative Building
Olympia, Washington 98504                                                                                                                 Cite as:  AGLO 1975 No. 3

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office on three questions relating to the administration of the predischarge education program currently being conducted by Community College District No. 18 (Big Bend) in conjunction with branches of the United States Armed Forces and the Veterans' Administration.  Your questions are paraphrased as follows:

            (1) How are the various fees received by Community College District No. 18 (Big Bend) from its predischarge education program (PREP) courses to be regarded and handled in relation to the statutes governing the receipt, handling and disposition of community college revenues?

            (2) What disposition may be made of funds that are received by the district in excess of expenditures incurred in the administration of its predischarge education program?

            (3) May a community college district engage in a PREP operation by means of a contract to provide educational services to a private nonprofit corporation formed for that purpose which will, in turn, contract with the military personnel who are to receive the services?

            We will answer your first and second questions in the manner set forth in our analysis.  Your third question is answered in the negative.

             [[Orig. Op. Page 2]]                       ANALYSIS

            Community College District No. 18, which operates Big Bend Community College, is one of several such districts created by the community college act of 1967.  See, RCW 28B.50.040(18).  For several years, now, it has been operating, at various United States Army and Air Force Bases in West Germany, a "predischarge education program" (hereinafter referred to as PREP) for soon-to-be discharged members of those armed forces in accordance with a federal law (Public Law 91-219) which was passed by Congress in 1970.  A section of that law, now 38 U.S.C.A. § 1695, describes the purposes of this program as follows:

            "(a) The purpose of this subchapter is to encourage and assist veterans in preparing for their future education, training, or vocation by providing them with an opportunity to enroll in and pursue a program of education or training prior to their discharge or release from active duty with the Armed Forces.  The program provided for under this subchapter shall be known as the Predischarge Education Program (PREP).

            "(b) For the purposes of this subchapter, the term 'eligible person' means any person serving on active duty with the Armed Forces who has completed more than 180 consecutive days of such active duty service as certified to the Administrator by the Secretary concerned."

            Also to be noted is 38 U.S.C.A. § 1696, placing responsibility for the program with the Administrator of the Veterans' Administration, and providing that:

            "(a) The Administrator shall, under such regulations as he shall prescribe after consultation with the Secretary of Defense, pay the educational assistance allowance as computed in subsection (b) of this section to an eligible person enrolled in and pursuing (1) a course or courses offered by an educational institution (other than by correspondence) and required to receive a secondary school diploma, or (2) any deficiency, remedial, or refresher course or courses offered by an educational institution and required for  [[Orig. Op. Page 3]] or preparatory to the pursuit of an appropriate course or training program in an approved educational institution or training establishment.

            "(b) The educational assistance allowance of an eligible person pursuing education or training under this subchapter shall be computed at the rate of (1) the established charges for tuition and fees which the educational institution requires similarly circumstanced nonveterans enrolled in the same or a similar program to pay, and the cost of books and supplies peculiar to the course which such educational institution requires similarly circumstanced nonveterans enrolled in the same or a similar program to have, or (2) $220 per month for a full-time course, whichever is the lesser.  Where it is determined that there is no same program, the Administrator shall establish appropriate rates for tuition and fees designed to allow reimbursement for reasonable costs for the education or training institution:

            "(c) The educational assistance allowance authorized by this section shall be paid without charge to any period of entitlement earned pursuant to section 1661(a) of this title."

            Insofar as state authorization is concerned,1/ this activity by Big Bend Community College was initially sanctioned by a memorandum opinion of this office dated  [[Orig. Op. Page 4]] November 19, 1971 [[to John C. Mundt, Director, State Board for Community College Education an Informal Opinion AIR-71638]], copy enclosed ‑ based upon the following provisions of RCW 28B.50.520:

            "The state board for community college education or any community college board of trustees is authorized to receive federal funds made available for the assistance of community colleges, and providing physical facilities, maintenance or operation of schools, or for any educational purposes, according to the provisions of the acts of congress making such funds available."

            The rationale for this advice was that, under applicable federal law, the funds involved ‑ even though directly paid to eligible military personnel ‑ constituted "federal assistance to an educational program."  Accord, a letter opinion written by an Assistant United States Attorney General on March 5, 1968, from which we there quoted with approval.  Hence, the memorandum concluded that the funds retained their character as "federal funds" within the meaning of RCW 28B.50.520, supra, until actually received by the community college.

            Then, in 1973, our state legislature passed chapter 105, Laws of 1973,supra, expressly confirming the existence of this authority by providing as follows:

            "The state board for community college education may authorized any community college board of trustees to do all things necessary to conduct an education, training, and service program authorized by chapter 28B.50 RCW, as now or hereafter amended, for United States military personnel at any geographical location:  PROVIDED, That any high school completion program conducted pursuant to this section shall comply with standards set forth in rules and regulations promulgated by the superintendent of public instruction and the state board of education:  AND PROVIDED FURTHER, That the superintendent of public instruction shall issue the certificate or diploma in recognition of high school completion education provided pursuant to this section."2/

             [[Orig. Op. Page 5]]   This 1973 authorization, however, was qualified in two respects:  First, by § 2 of the act (now RCW 28B.50.093), the legislature provided that:

            "Prior to the state board granting authorization for any programs authorized under RCW 28B.50.092, the state board shall determine that such authorization will not deter from the primary functions of the community college system within the state of Washington as prescribed by chapter 28B.50 RCW."

            And secondly, by § 3 (RCW 28B.50.094) the legislature directed that:

            "The costs of funding programs authorized by RCW 28B.50.092 through 28B.50.094 shall ultimately be borne by grants or fees derived from nonstate treasury sources."

            Your first two questions, which we will consider together, involve the handling of course fees and other revenues received by Big Bend Community College from its PREP operations in West Germany.  In order to respond, it will next be necessary to analyze the funding structure of community colleges and then, finally, to determine how the funding of a PREP operation fits into that structure.

            The first statute to be noted in this regard is RCW 28B.15.100, which provides as follows:

            "The board of regents and board of trustees at each of the state's colleges and universities shall charge to and collect from each of the students registering at the particular institution such general tuition fees, operating fees, services and activities fees, and other fees as such board shall in its discretion determine:  Provided, That such general tuition fees and operating fees for quarters other than summer session shall be in at least the amounts for the respective institutions as set forth in RCW 28B.15.200, 28B.15.300, 28B.15.400 and 28B.15.500 as now or hereafter amended:  Provided further, That the fees charged by boards of trustees of community college districts shall be consistent with RCW 28B.15.500 as now or hereafter amended."

             [[Orig. Op. Page 6]]   RCW 28B.15.500, referred to therein, then provides that:

            "General tuition fees, operating fees and services and activities fees charged students registered at each community college other than at summer quarters shall be as follows:

            "(1) Full time resident students:

            "(a) General tuition fee, forty-one dollars and fifty cents per quarter;

            "(b) Operating fees, twenty-seven dollars per quarter; and

            "(c) Services and activities fees, not more than fourteen dollars and fifty cents per quarter.

            "(2) Full time nonresident students:

            "(a) General tuition fee, one hundred thirty-one dollars and fifty cents per quarter;

            "(b) Operating fees, eighty-one dollars per quarter; and

            "(c) Services and activities fees, not more than fourteen dollars and fifty cents per quarter.

            "Tuition, operating fees and services and activities fees consistent with the above schedule will be fixed by the state board for community colleges for summer school students.

            "The board of trustees shall charge such fees for part time students, ungraded courses, noncredit courses, and short courses as it, in its discretion, may determine, not inconsistent with the rules and regulations of the state board for community college education."

            All of these revenues of a community college except general tuition fees at one time fell into a classification commonly referred to as "local funds," a term normally employed to describe the revenues of a college which are generated through some activity or fee source that, through long-established custom and/or legislative  [[Orig. Op. Page 7]] sanction, is retained by the college and not placed in the state treasury.  In earlier times such funds were not usually budgeted or appropriated by the legislature under chapter 43.88 RCW, the state budget and accounting act.  However, general tuition fees constituted an exception to this practice from the outset of the community college system in 1967 ‑ by reason of § 36, chapter 8, Laws of 1967, Ex. Sess.  As now codified in RCW 28B.50.360, this statute (including various later amendments) requires all general tuition revenues of the community colleges to be paid into the state treasury for the purposes described in that statute and in RCW 28B.50.370, including debt service on bond issues and the funding of capital projects.  In addition, by its enactment of § 17, chapter 279, Laws of 1971, 1st Ex. Sess., the legislature has recently further altered the law by amending RCW 28B.50.320, to read as follows:

            "All operating fees, services and activities fees, and all other income which the trustees are authorized to impose shall be deposited as the trustees may direct unless otherwise provided by law.  Such sums of money shall be subject to the budgetary and audit provisions of law applicable to state agencies. . . ."  (Emphasis supplied.)

            Consequently, although these revenues may still be retained locally, they ‑ meaning "all operating fees, services and activities fees and all other income which the trustees [of a community college] are authorized to impose" ‑ are now "subject to the budgetary and audit provisions of law applicable to state agencies. . .".  RCW 28B.50.320,supra.  This phrase, in RCW 28B.50.320, supra, in turn, refers in part to those statutory budget planning processes which are applicable to state agencies generally, including chapter 43.88 RCW, the budget and accounting act.  Greenwood v. State Bd. for Com. Col.,supra.  In addition, this term must also be construed as referring to certain other budgeting, accounting and auditing provisions which the legislature has made specifically applicable to community colleges3/ in order to supplement or implement  [[Orig. Op. Page 8]] the provisions of that act.  The principal statute so providing is RCW 28B.50.090, which requires the state board for community college education, among other things, to:

            ". . .

            "(1) Review the budgets prepared by the community college boards of trustees, prepare a single budget for the support of the state system of community colleges and adult education, . . .

            "(2) Establish guidelines for the disbursement of funds; and receive and disburse such funds for adult education and maintenance and operation and capital support of the community college districts in conformance with the state and district budgets, and in conformance with chapter 43.88 RCW;

            ". . .

            "(7) Establish minimum standards to govern the operation of the community colleges with respect to:

            ". . .

            "(b) internal budgeting, accounting, auditing, and financial procedures as necessary to supplement the general requirements prescribed pursuant to chapter 43.88 RCW."

            Question (1):

            Your first question, to which we may now turn in the light of the foregoing, asks:

            How are the various fees received by Community College District No. 18 (Big Bend) from its predischarge education program (PREP) courses to be regarded and handled in relation to the statutes governing the receipt, handling and disposition of community college revenues?

            In responding to this question, we are confronted initially with the task of identifying the exact nature of the revenues derived by the college from its PREP activities.

             [[Orig. Op. Page 9]]   Your principal concern, as expressed in your letter, is whether the bulk of such revenues, consisting of course fees corresponding to the general tuition fees charged to regularly enrolled students, must be considered to be "general tuition" fees within the meaning of RCW 28B.50.360,supra, and thus be mandatorily payable into the state treasury.

            In the abstract, it might seem that this question would be answerable in the affirmative.  However, we cannot consider the question in such a context.  The income received by Big Bend Community College from students enrolled in its PREP courses is an integral part of a special program conducted pursuant to specific applicable federal and state statutes.  Therefore, these revenues must be examined in the light of those statutes.

            As noted earlier, all of this income is derived from allowances made by the federal government to eligible veterans under 38 U.S.C.A. §§ 1695, et seq.,supra.  Thus the payments, when made to the college, do not represent the payment of tuition fees such as are charged by the college to its regularly enrolled students.  Accord, 38 U.S.C.A. § 1696,supra, which provides that such educational assistance allowances

            ". . . shall be computed at the rate of (1) the established charges for tuition and fees which the educational institution requires similarly circumstanced nonveterans enrolled in the same or a similar program to pay, and the cost of books and supplies peculiar to the course which such educational institution requires similarly circumstanced nonveterans enrolled in the same or a similar program to have, or (2) $220 per month for a full-time course, whichever is the lesser.  Where it is determined that there is no same program, the Administrator shall establish appropriate rates for tuition and fees designed to allow reimbursement for reasonable costs for the education or training institution:"

            In other words, the educational assistance allowances contemplated by that federal statute represent payment for fees and costs charged by an educational institutionrelated to the institution's regularly established charges for tuition and fees.  Whether or not the funds, when paid, should be considered "federal funds" under  [[Orig. Op. Page 10]] RCW 28B.50.520,supra, is no longer important.  There is nothing in that statute or in any other state law which compels the conclusion that any of the payments by enrollees in Big Bend PREP courses must be considered as "general tuition" within the meaning of RCW 28B.50.360, supra.

            Ultimately, of course, the question is one of our own legislature's intent.  Did the Washington state legislature, in enacting chapter 105, Laws of 1973,supra, visualize the fees to be charged by a community college for its PREP courses as being "general tuition fees" within the meaning of RCW 28B.50.360,supra, and thus as being unavailable to fund such an operation under § 3 of the act (RCW 28B.50.094,supra)?  This question seems to us to answer itself.  Obviously this 1973 legislation was aimed specifically at PREP.  The legislature must be presumed to have known what that program entailed, including the method by which it is funded under the applicable federal statutes, 38 U.S.C.A. §§ 1695, et seq., supra.  That contemporaneous federal legislation on the same subject must be considered as having been in the collective mind of our legislature in enacting its own statutes on the subject.  See,United States v. Anderson, 109 F.Supp. 755 (E.D. Wash. 1953);Seattle v. Reed, 6 Wn.2d 186, 107 P.2d 239, 139 A.L.R. 892 (1940).  Furthermore, it must be assumed that a new statutory provision such as this was enacted for some purpose and was not intended to be a useless or meaningless act.  See,Trudeau v. Pac. States B. & B. Co., 20 Wn.2d 561, 148 P.2d 453 (1944).

            Therefore, it must further be presumed that in limiting the funds available for PREP to ". . . grants or fees derived from nonstate treasury souces . . ." by RCW 28B.50.094, supra, the legislature had in mind the federal allowances which are paid by the federal government to eligible persons to be expended, in turn, as fees for enrollment in the courses offered by the educational institution involved; in this case, Big Bend Community College.  What the legislature must have meant by that phrase, considering the total legislative history of its 1973 act, as above outlined, was simply that the cost of funding such programs is to be borne by the revenues supplied under the applicable federal statutes, or similar sources.  The phrase "general tuition fees" used in RCW 28B.50.360, supra, thus cannot be construed as including all or any part of such revenues.

            To conclude otherwise, of course, would be to require that such income ‑ obviously the bulk of the college's PREP  [[Orig. Op. Page 11]] revenues ‑ be placed in the state treasury under RCW 28B.50.360,supra, where it would be unusable in connection with that program.  The ultimate result would be the end of PREP in this state and the legislature, in authorizing the state board to permit community colleges to engage in such programs, would have performed a useless act.  It is our opinion, therefore, on the first issue raised by your initial question, that none of the revenues derived by Big Bend Community College from its PREP are to be regarded as "general tuition fees" which are statutorily required by law4/ to be placed in the state treasury.

            Going to the next issue, however, this conclusion does not mean that the trustees of this community college district have uncontrolled discretion as to how they are to receive, account for or disburse these revenues.  For ease of reference, we again quote the pertinent language of RCW 28B.50.320, supra, as follows:

            "All operating fees, services and activities fees, and all other income which the trustees are authorized to impose shall be deposited as the trustees may direct unless otherwise provided by law.  Such sums of money shall be subject to the budgetary and audit provisions of law applicable to state agencies. . . ."  (Emphasis supplied.)

            Thus, the "sums of money" which that statute expressly makes subject to the budgetary provisions of state law, in addition to certain described fees, include ". . . all other income which the trustees are authorized to impose . . ."  In using that phrase the legislature must have meant to cover, at least, the income from all fees and similar charges which the trustees of a community college may lawfully exact for services provided by the college.

            In support of this view there is evidence in other related statutes that the legislature intended to make no distinction between statutory "fees" and similar charges for college services and facilities.  See, for instance, RCW 28B.50.140(7), which authorizes the trustees of a community college to ". . . establish fees and charges . . ." for certain facilities.  Any doubt as to the  [[Orig. Op. Page 12]] meaning of the phrase "all other income" may be resolved by reference to such other related statutory provisions.  State v. Lee, 62 Wn.2d 228, 382 P.2d 491 (1963).

            Consequently, it readily follows that PREP revenues are among those community college funds which are "subject to the budgetary . . . provisions of state law" under RCW 28B.50.320, supra, for they do, most certainly, constitute a form of income which the trustees of such a college "are authorized to impose."  Accord, § 1, chapter 105, Laws of 1973 (RCW 28B.50.092), supra.  Therefore, in total answer to your first question it is our opinion that such revenues as Big Bend Community College receives from the conduct of its PREP courses, although not required to be paid into the state treasury as tuition revenues, must be budgeted in the same manner as its other nontreasury fee revenues (operating fees and service and activities fees) under RCW 28B.50.320,supra.  As a part of that budgetary process it is incumbent upon the state board for community college education to review the college's budget and to control or modify it to whatever extent that board may deem necessary.  RCW 28B.50.090,supra;Greenwood v. State Bd. for Com. Col., supra.

            Question (2):

            This obviously means, further, in response to your second question, that any surplus funds generated by the program must, likewise, be accounted for and, presumably, be disposed of in the above described budgetary process as administered by OPP&FM and the state board, respectively.  For instance under RCW 28B.50.090,supra, the state board no doubt has ample power to prescribe and enforce appropriate procedures for the accounting and disposition of any such surplus funds in a manner most beneficial to the college and the board in conducting such programs.

            Question (3):

            Finally, separate and apart from your first two questions, you have asked:

            May a community college district engage in such a program as PREP by means of a contract to provide educational services to a private nonprofit corporation formed for that purpose which will, in turn, contract with the military personnel who are to receive the services?5/

             [[Orig. Op. Page 13]] The answer to this question is clearly in the negative.  Community college districts, as we indicated earlier in this opinion, can exercise only those powers expressly granted to them by statute and those which are necessarily implied from the powers expressly granted.  The term "necessary," as used in that context, refers to those powers which are legally necessary to implement the intention of the legislature; not those things which are convenient or even those which are necessary as a practical matter in an isolated instance.  See,State ex rel. State Board Etc. v. Clausen, 84 Wash. 279, 146 Pac. 630 (1915).  To clarify this point, implied powers are those which must be presumed to have been within the intention of the legislative grant.  City of Madison v. Daley, 58 Fed. 751 (D. Ind. 1893).  If there is a fair or reasonable doubt as to whether or not a particular power has been granted, it must be denied.  Griggs v. Port of Tacoma, 150 Wash. 402, 273 Pac. 521 (1928).

            There is nothing in any of the federal legislation that we have reviewed on the subject which requires an eligible educational institution to channel its PREP services through a corporate entity.  Nor is there anything in those federal laws, or in our own state laws, which would justify that procedure as a matter of legal necessity; i.e., as an "implied power."  If anything, the express legislative intent in both the federal and state statutes involved is to the contrary.  The clearest provision on this point is RCW 28B.50.092, supra, which empowers the state board to authorize local community college boards to

            ". . . do all things necessary to conduct an education, training, and service program authorized by chapter 28B.50 RCW, as now or hereafter amended, for United States military personnel at any geographical location: . . ."  (Emphasis supplied.)

            The word "conduct" is defined in Webster's New Third International Dictionary as the "action of leading,  [[Orig. Op. Page 14]] commanding, guiding, escorting . . ."  Therefore, it follows that the legislature has not authorized a community college district to provide its educational services to an independent nonprofit corporation to enable that corporation to conduct a PREP activity.  Words in a statute are to be given their usual and ordinary meaning.  State v. Vosgien, 82 Wash. 685, 144 Pac. 947 (1914).

            Furthermore, where a statute delegates a power to a public agency, and the means for executing such power are expressly given, there is no room for finding any implied power to utilize some other means.  State ex rel. Eastvold v. Maybury, supra.  In this case, the legislature has expressly authorized community college districts, when so permitted by the state board for community college education, to provide certain educational benefits to United States military personnel.  Specific means for doing so are expressed in RCW 28B.50.092 under the authority ". . . to do all things necessary to conduct an education, training, and service program authorized by chapter 28B.50 RCW . . ."  (Emphasis supplied.)  Construing the word "conduct" in its ordinary sense, we must therefore conclude that RCW 28B.50.092 constitutes an authorization for a community college district to do whatever is necessary to conduct such programs in its own name and under its own management ‑ to the extent authorized by the state board for community college education.  The statute provides no authority for a community college to provide such services in a subservient relationship to a private corporate entity conducting such a program.