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August 23, 1971
Honorable M. A. Allan
Highline Community College
Midway, Washington 98031 Cite as: AGLO 1971 No. 98 (not official)
By letter previously acknowledged you have requested an opinion of this office on a number of questions relating to the authority of a community college in this state to provide scholarships, loans and grants, deferral of tuition, and certain designated awards to the students enrolled therein. We believe that the legal issues raised by your request may best be met and resolved through paraphrasing your questions as follows:
(1) May a community college receive and disburse federal funds for the purpose of financing programs authorized by, and approved under, federal statutes without regard to the constitutional limitations which are set forth in Article VIII, § 5 of the Washington constitution?
(2) May a community college receive and disburse, without constitutional limitation, funds contributed or donated by private individuals or other private sources?
(3) Is the expenditure by a community college of funds derived from student activity fees, gate receipts from athletic events and school plays, concerts, etc., and television or radio broadcast receipts related to such events, governed by the provisions of Article VIII, § 5 of the Washington constitution which prohibits a loan or gift of the state's credit or its public funds?
(4) If question (3) is answered in the affirmative, under what circumstances may such funds be expended for scholarships, or grants or loans, or for providing awards such as engraved plaques, sweaters, warm-up jackets, chenille letters, rain clothes, monogrammed dress jackets, and the like, to students who have served or are serving as members of athletic teams, cheer leaders, outstanding scholars, outstanding participants in drama, debate, student government, and the like?
(5) May a community college defer the collection of fees from students at the time of registration when the college is to bill certain programs or funds and subsequently to receive payment for the fees from some other source, such as state vocational rehabilitation, or employment security, the federal veterans' administration or the like?
[[Orig. Op. Page 2]]
We answer questions (1), (3) and (5) in the affirmative and questions (2) and (4) in the manner set forth in our analysis.
Two fundamental propositions must be initially noted with regard to all of the activities referred to in your request, both arising from the fact that a community college, acting through its board of trustees as provided for in RCW 28B.50.100, is an agency of the state.1/ Because of this, it must first be understood that a community college has only such authority to do those things which you have referred to as the legislature has granted to it, either expressly or by necessary implication. State ex rel. Holcomb v. Armstrong, 39 Wn.2d 860, 239 P.2d 545 (1952); see, also, State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 (1956).
Secondly, it likewise is to be understood that a community college, as a state agency, is restricted in its activities by such limitations as are contained in our state constitution ‑ including the following provisions of Article VIII, § 5, which are particularly pertinent to operations in those areas described in your questions:
"The credit of the state shall not, in any manner be given or loaned to, or in aid of, any individual, association, company or corporation."
This constitutional provision, although somewhat differently worded than is § 7 of the same Article dealing with municipal funds,2/ has been construed by the court to have essentially the same meaning in so far as state funds are concerned. See, Washington State Highway Comm. v. Pac. N.W. Bell Tel. Co., 59 Wn.2d 216, 367 P.2d 605 (1961); State v. Guaranty Trust Co., 20 Wn.2d 588, 148 P.2d 323 (1944); and Morgan v. Dept. of Social Security, 14 Wn.2d 156, 127 P.2d 686 (1942). Thus, in effect, it inhibits not only state guarantees of private loans, cf., Gruen v. State Tax Commission, 35 Wn.2d 1, 211 P.2d 651 (1949), but direct state loans as well, together with state gratuities or gifts.
[[Orig. Op. Page 3]]
Basically, we are dealing in this opinion with three separate categories of funds which may be available to a community college; namely, (1) earmarked federal funds; (2) earmarked private donations, etc.; and (3) public funds. The areas of activity involving the use of these funds with regard to which we have been asked to advise include the following four categories: Scholarships and similar grants; loans; awards (plaques, letter sweaters, etc.); and deferral of tuition. In line with the two analytical guideposts which must be considered in determining the legality of expenditures for these programs, some statute must first be found which either expressly or impliedly authorizes the activity. Then, secondly, some basis for the avoidance of a collision with Article VIII, § 5 limitations must be demonstrated ‑ either on the basis that the funding sources involved are not within the purview of the constitution or that because of some performance required of the recipient, or because of his status and circumstances, the expenditure in any event does not constitute an unconstitutional gift or loan of state funds.
We have paraphrased and organized your questions so as first to draw your attention to the constitutional lines of demarcation to be drawn between the various funding sources to which you have referred, starting with two instances (federal funds and private donations) where the scope of authority appears to be rather clearly spelled out. See questions (1) and (2). Then, with questions (3) and (5) we will move from the area of constitutionally uninhibited funding sources to that of restricted sources where the scope of authority must be viewed within the confines of the constitution. In this manner, we will attempt to provide you with not only an answer to your specific questions but, as well, a set of guidelines which you may apply in determining the legality of other related community college activities.
The authority of a community college to receive and disburse federal funds for the purpose of financing programs authorized by, and approved under, federal statutes, is spelled out in RCW 28B.10.280 and RCW 28B.50.520, reading respectively, as follows:
"The boards of regents of the state universities and the boards of trustees of the state colleges and community college districts may each create student loan funds, and qualify and participate in the National Defense Education Act of 1958 and such other similar federal student aid programs as are or may be enacted from time to time, and to that end may comply with all of the laws of the United States, and all the rules, regulations and requirements promulgated pursuant thereto." (Emphasis supplied.)
[[Orig. Op. Page 4]]
"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."
From the standpoint of the limitations contained in Article VIII, § 5, supra, we turn to a recent prior opinion, AGO 1970 No. 24 [[to David G. Sprague, State Representative and George Fleming, State Representative on November 5, 1970]](copy enclosed), in which we concluded that such constitutional limitations as this and its municipal counterpart, Article VIII, § 7, do not prohibit state agencies or municipal corporations from gratuituously disbursing, in accordance with applicable federal law, such funds as may have been made available to them by the federal government for a specified purpose.
In thus concluding we reasoned that these constitutional limitations were only intended by the framers of the constitution to inhibit the expenditure of funds which would otherwise be available to be spent on general and proper agency or municipal purposes. Since such federally granted funds as are referred to in RCW 28B.10.280 and RCW 28B.50.520, supra, would not thus be "otherwise available" for general community college purposes, it follows that their expenditure, in accordance with the applicable federal and state statutes, would not be unconstitutional.3/
[[Orig. Op. Page 5]]
The authority of a community college to receive and disburse funds contributed or donated by private individuals or other private sources will be found in RCW 28B.50.140, providing in material part as follows:
"Each community college board of trustees:
". . .
"(8) May receive such gifts, grants, conveyances, devises and bequests of personal property from private sources, as may be made from time to time, in trust or otherwise, whenever the terms and conditions thereof will aid in carrying out the community college programs as specified by law and the regulations of the state college board; sell, lease or exchange, invest or expend the same or the proceeds, rents, profits and income thereof according to the terms and conditions thereof; and adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof;
". . ."
Under this statute, the various boards of trustees of the several community colleges in this state are specifically authorized to receive gifts, grants, conveyances, devises and benefits of property from private sources ". . . whenever the terms and conditions thereof will aid in carrying out the community college programs as specified by law and the regulations of the state college board; . . ."
The statute further provides that the board may ". . . adopt regulations to govern the receipt and expenditure of the proceeds, rents, profits and income thereof;"
Therefore, this language indicates a legislative intent that such gifts, grants, etc. be treated as a separate class of funds, separate and apart from the regular public funds of the institution.4/
[[Orig. Op. Page 6]]
To this extent the board may control the receipt and expenditure of such funds in accordance with regulations it adopts, which regulations would be applicable to the receipt of these private funds but would not be applicable to public funds. As a result, the limitations on unrestricted gifts received under this statute are subject only to the regulations of the board and are not subject to the restrictions of Article VIII, § 5, supra.
Your third question inquires as to whether the expenditure by a community college of funds derived from student activity fees, gate receipts from athletic events or school plays, concerts, etc. and television or radio broadcast receipts related to such events, is governed by the provisions of Article VIII, § 5, supra.
In this area, we are no longer dealing with earmarked monies granted or donated either by the federal government or by private individuals or other private sources. Instead, we are here dealing with revenues derived from the operational activities of the college.
The mere fact that these funds may be collected and retained locally rather than being placed in the state treasury for expenditure only in accordance with the legislative appropriation5/ by no means immunizes them from the limitations of Article VIII, § 5, supra. Accord, State ex rel. Collier v. Yelle, 9 Wn.2d 317, 115 P.2d 373 (1941); see also, State ex rel. O'Connell v. Pt of Seattle, 65 Wn.2d 801, 399 P.2d 623 (1965). Although both of these cases dealt with proprietary operating revenues of municipalities rather than of the state, we entertain no doubt as to the likelihood that our court would apply the same principles in the case of any attempt to disburse the operating revenues of a state agency in a manner not in conformity with the ban against loans or gifts of state funds or credit which is contained in Article VIII, § 5, supra.6/
[[Orig. Op. Page 7]]
This question presupposes the foregoing affirmative answer to question (3), and inquires as to the circumstances under which the funds therein referred to may be expended for scholarships, or grants or loans, or for providing awards such as engraved plaques, sweaters, warm-up jackets, chenille letters, rain clothes, monogrammed dress jackets, to students who have served or are serving as members of athletic teams, cheer leaders, outstanding scholars, outstanding participants in drama, debate, student government, and the like.
An appropriate beginning point for answering this question is chapter 28, Laws of 1971, Ex. Sess. (Senate Bill No. 35). This act, which was passed by the legislature following our receipt of your opinion request, has added the following two new sections to chapter 28B.10 RCW:
"The governing boards of each of the state universities, state colleges, and community colleges in addition to their other duties prescribed by law shall have the power and authority to establish programs for intercollegiate athletic competition. Such competition may include participation as a member of an athletic conference or conferences, in accordance with conference rules."
"Funds used for purposes of providing scholarships or other forms of financial assistance to students in return for participation in intercollegiate athletics in accordance with section 2 of this 1971 act shall be limited to moneys received as contributed or donated funds, or revenues derived from athletic events, including gate receipts and revenues obtained from the licensing of radio and television broadcasts."
Manifestly, this statute was enacted with both of the fundamental analytical propositions stated at the outset of this opinion in mind. Thus, it first authorizes the use of gate receipts and other operating revenues of intercollegiate athletic events for the purpose of ". . . providing scholarships or other forms of financial assistance to students . . ."; and then it spells out a requisite quid pro quo for the purpose of avoiding the "unconstitutional gift" limitations of Article VIII, § 5, supra, ‑ namely, that the scholarships or other financial aid in question be awarded [[Orig. Op. Page 8]] "in return for participation in intercollegiate athletics."7/ In other words, because athletic scholarships or other financial aid funded out of operating revenues may only be expended in return for student participation in intercollegiate athletics, their constitutionality is preserved ‑ even though the funds in question may readily be said to constitute "public funds" to which Article VIII, § 5, supra, applies.
On the other hand where this sort of performance relationship is not required, an alternative rationale for the constitutionality of scholarships or grants to students attending our public colleges and universities must be utilized. In AGO 57-58 No. 226 [[to R. R. (Bob) Greive, State Senator on October 31, 1958]], copy enclosed, recently affirmed in an opinion dated March 23, 1971, to State Senator Jonathan Whetzel, we concluded that an exception to the general constitutional ban against gifts exists in those cases wherein the recipient student is in "financial need." In accordance with this rationale, the 1969 legislature enacted chapter 222, Laws of 1969 (currently codified as RCW 28B.10.802-28B.10.824). This act (commonly called the student financial aid act) is administered by the state commission on higher education which is a part of the council on higher education. In order to comply fully with the constitution and to resolve any doubts as to its constitutionality, the act is limited in its application to "needy students," a term which is expressly defined in RCW 28B.10.802 (3) as follows:
"The term 'needy student' shall mean a post high school student of an institution of higher learning as defined in 28B.10.802 subsection (1) above who demonstrates to the commission the financial inability, either through his parents, family and/or personally, to meet the total cost of board, room, books, and tuition and incidental fees for any semester or quarter."
[[Orig. Op. Page 9]]
Summarizing, then, it will be seen that from a constitutional standpoint, a scholarship, grant or loan program, and likewise, any program of awards to be made to community college students, must be predicated upon either (a) a concept of an award presented in return for, and preconditioned upon, the certain performance which it is within the authority of the college to solicit, or (b) financial need on the part of the recipient. This leaves us, then, with the "authority" side of the coin with respect to the matters which are involved in this question.
First, in the area of scholarships, loans or grants, we have already, of course, noted the recent 1971 enactment with respect to athletic scholarships ‑ as well as chapter 222, Laws of 1969, supra, with regard to the state administered student financial aid program for "needy students." In addition to these two acts, several other statutory authorizations for the awarding of scholarships to community college students were listed and discussed in our letter dated November 16, 1970, to the president of Fort Steilacoom Community College, copy enclosed, as follows:
"RCW 28B.10.280 specifically authorizes community college districts to create student loan funds and qualify and participate in the National Defense Education Act of 1958 and other such similar federal student aid programs as may be enacted. It is my understanding that recipients under the National Defense Education Act must make a showing of financial need, and, based upon that showing, the federal government will provide $9 to every $1 of state money to provide financial assistance to students in institutions of higher education.
". . .
"RCW 28B.10.210 allows community colleges to provide certain financial assistance to blind students who are able to show that they do not have the resources with which to finance their education.
"RCW 28B.10.250 also allows community colleges to provide financial assistance to children of deceased or totally incapacitated veterans whose children are attending an institution of higher education.
"RCW 28B.15.520 allows community colleges with approval of the college board to waive tuition fees, incidental fees and other fees for students who are enrolled in a course of study which will enable them to finish their high school education."
[[Orig. Op. Page 10]]
In addition to the foregoing, the recently enacted provisions of chapter 279, Laws of 1971, 1st Ex. Sess. contain certain further statutory authorizations for the expenditure of public funds by a community college for scholarships or other forms of financial assistance. Section 4 of this 1971 act allows one dollar per quarter to be deducted from the "service and activities fees" paid by each student for the purpose of establishing a "student loan fund for needy students." Section 11 allows for a waiver of 3% of tuition and fees for resident students who are "needy or disadvantaged students." Section 22 exempts veterans of the southeast Asia theater of operations from any increase in tuition and fees established by enactment of House Bill No. 740, chapter 279, Laws of 1971, 1st Ex. Sess. Cf., § 77, chapter 275, Laws of 1971, 1st Ex. Sess. at page 49 (appropriations act).
Thus, to the extent that a particular financial aid program is to be funded with "public monies" as we have used this term in this opinion, as distinguished from earmarked federal or private grants or donations, the necessary legislative grant of authority can only be said to exist, at this time, to the extent that it is spelled out in one of these statutes.
The matter of providing awards must be approached somewhat differently than that of scholarships, for here we find no pattern of legislation comparable to that relating to scholarships; i.e., a pattern of express legislative authority in those areas wherein the legislature has intended to authorize such financial assistance ‑ thereby negating any rational basis for finding any such authority by implication. By way of contrast, in the area of such awards as you have referred to, there is no express authorization and thus the requisite authority must be found, if it exists, on the basis of the doctrine of implied powers. Accord, State ex rel. Holcomb v. Armstrong, supra.
Under this case, the approach to be applied in searching for an implied power (having failed, first, to find an express grant to perform the activity in question) as expressed by the court at page 865, is as follows:
" . . . Failing an express grant, the regents may only exercise those powers necessary or fairly implied in or incident to the powers expressly granted or those essential to the declared objects and purposes of the university ‑ not simply convenient but indispensable. . . ."
The "declared objects and purposes" of the various community colleges within the state system which was established through the enactment of chapter 8, Laws of 1967, Ex. Sess. are spelled out in § 2 thereof (RCW 28B.50.020) as follows:
[[Orig. Op. Page 11]]
"The purpose of this chapter is to provide for the dramatically increasing number of students requiring high standards of education either as a part of the continuing higher education program or for occupational training, by creating a new, independent system of community colleges which will:
"(1) Offer an open door to every citizen, regardless of his academic background or experience, at a cost normally within his economic means;
"(2) Ensure that each community college district shall offer thoroughly comprehensive educational, training and service programs to meet the needs of both the communities and students served by combining, with equal emphasis, high standards of excellence in academic transfer courses; realistic and practical courses in occupational education, both graded and ungraded; community services of an educational, cultural, and recreational nature; and adult education;
"(3) Provide administration by state and local boards which will avoid unnecessary duplication of facilities or programs; and which will encourage efficiency in operation and creativity and imagination in education, training and service to meet the needs of the community and students;
"(4) Allow for the growth, improvement, flexibility and modification of the community colleges and their education, training and service programs as future needs occur; and
"(5) Establish firmly that community colleges are, for purposes of academic training, two year institutions, and are an independent, unique, and vital section of our state's higher education system, separate from both the common school system and other institutions of higher learning, and never to be considered for conversion into four-year liberal arts colleges."
Based upon the foregoing express authority, and the rationale in Holcomb, supra, we believe there is implied authority for a community college to provide awards such as those to which you referred.
The basis for this conclusion is threefold: First, such awards are of an entirely different category from those of scholarships or tuition and fee waivers which are monetary in nature; secondly, the granting of awards by higher education institutions has been a long established practice and a matter of common knowledge [[Orig. Op. Page 12]] of which official notice may be taken; and thirdly, the legislature has never seen fit to further delineate or speak to this specific category of awards traditionally made by institutions of higher education.
The cardinal rule of statutory construction applicable here has been clearly enunciated by our court in In re Lloyd's Estate, 53 Wn.2d 196, 332 P.2d 44 (1958). Therein the court stated:
"The tax commission has interpreted the pertinent statutes in a consistent manner for twenty-three years. We believe it is significant that during that time the legislature has not amended the statute, but, in effect, has acquiesced in the administration of it by the tax commission.
" In Morin v. Johnson (1956), 49 Wn.2d 275, 300 P.2d 569, we pointed out:
"'It is a familiar rule of statutory construction that, in any doubtful case, the court should give great weight to the contemporaneous construction of an ordinance by the officials charged with its enforcement. This is especially true where the administrative construction has been accompanied over a period of years by the silent acquiescence of the legislative body. . . .'"
Thus, it is our opinion that the granting of such awards as are delineated in question (4) is within the implied authority of institutions of higher education based upon the administrative construction of its statutes by the governing body of the institution to include the granting of awards, accompanied by the silent acquiescence of the legislature.
We believe such awards to be an intrinsic part of not only athletics but scholastics, drama, debate, student government and the like. As long as such awards are personal to the recipient and reasonable under the circumstances8/ and are not monetary awards, [[Orig. Op. Page 13]] we believe the authority to grant them is within the implied authority of the governing body of the institution of higher education based upon the reasoning of our supreme court in the Holcomb and Lloyd cases, supra.
Thus, the requisite authorization to make such awards may be said to exist, but can only be presented on the basis of "return for participation."
It also follows that, if the individual does not meet the criteria established by the institution for the provided awards, then the performance or effort expended by the individual is insufficient to entitle him to such award.
By your final question you have inquired as to the legal ability of a community college to defer the collection of fees from students at the time of registration in those instances where the college is to bill and receive payment from some other source ‑ such as state vocational rehabilitation or employment security, the veterans' administration, or the like.
The statutory authority of the various boards of trustees of the several community colleges to charge tuition and other fees is spelled out in RCW 28B.15.500 (as amended by House Bill No. 740, chapter 279, Laws of 1971, 1st Ex. Sess.), as follows:
"General tuition fees ((and incidental)), 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 ((fees)) fee, ((fifty)) forty-one dollars and fifty cents per quarter; ((and))
"(b) ((Incidental)) Operating fees ((not more than twenty)), 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 ((fees)) fee, one hundred ((fifty)) thirty-one dollars and fifty cents per quarter; ((and))
[[Orig. Op. Page 14]]
"(b) ((Incidental)) Operating fees, ((not more than twenty)) eighty-one dollars per quarter; and
"(c) Services and activities fees, not more than fourteen dollars and fifty cents per quarter.
"Tuition ((and incidental)) , 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."
However, we find no legislative mandate that these fees be collected from students at the time of enrollment ‑ or at any other specific time, for that matter, except to the extent necessary to comply with RCW 28B.50.360 (as amended by House Bill No. 740, § 20, chapter 279, Laws of 1971, 1st Ex. Sess.). This statute, relating to the community college bond retirement fund, requires that:
"Within thirty-five days from the date of start of each quarter ((sixty percent of)) all general tuition fees of each such community college shall be paid into the state treasury, . . ."
Moreover, we would not regard a delay in the collection of fees ‑ to an extent not inconsistent with this statute ‑ as posing any constitutional problem, for the constitution does not forbid the state, pursuant to a valid contract, from rendering some part of its performance first, before payment or other reciprocal performance is obtained from the other party. See, Washington Nat. Gas Co. v. P.U.D. No. 1 of Snohomish County, 77 Wn.2d 94, 459 P.2d 633 (1969). Accordingly, we answer this concluding question in the affirmative.
This, we believe, completes the presentation necessary to answer your questions, as we have paraphrased them. We trust that the foregoing will be of some assistance to you. If we can be of any further help in regard to any of the matters discussed herein, please advise.
Very truly yours,
FOR THE ATTORNEY GENERAL
Richard M. Montecucco
Assistant Attorney General
*** FOOTNOTES ***
1/See, AGO 1967 No. 17 [[to Doris J. Johnson, State Representative on May 8, 1967]], copy enclosed.
2/Article VIII, § 7, provides as follows:
"No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."
3/However, it should be noted that RCW 28B.10.280, supra, in so far as it allows "participation" in the National Defense Education Act of 1958, contemplates that a portion of federal funds be matched with state funds and to this extent Article VIII, § 5, is applicable. Since the National Defense Education Act is for the benefit of needy students, this creates no problem in view of what our office has previously advised in a letter to Edmonds Community College dated August 18, 1970. (Copy attached.)
4/Most institutions, if not all, have existing foundations or trusts which have been established by private individuals to receive specific or general gifts and donations for the general benefit of the institution involved. The foundation or trust thus administers the gift or donation consistent with the overall programs and needs of the institution. Such a private foundation or trust, not being public, is thus exempt from any of the limitations which would be placed upon the authority of the institution itself.
5/See Article VIII, § 4 (Amendment 11) of the state constitution.
6/Additionally, in the specific case of student body fees, we would refer you to AGO 55-57 No. 267 [[to William A. Gissberg, State Senator on May 10, 1956]], copy enclosed. In that opinion, we concluded that the associated student body at a state college or university is to be considered an arm and agency of the governing board of such institution. Therefore, any of the operating revenues of any such associations, whether derived from required membership fees or otherwise, must be said clearly to fall within the ambit of Article VIII, § 5, supra, for the reasons above explained.
7/Ballentine's Law Dictionary (3rd Ed.) defines a gift as:
"A voluntary transfer of property by one to another without any consideration or compensation therefor; anything given or bestowed, or any piece of property voluntarily transferred by one person to another. 24 Am.Jur. 1st Gifts § 2 . . ."
This same law dictionary further defines a gift of public money as:
"Any appropriation of public money for the benefit of one who has no claim to be compensated which is enforceable at law or in equity, . . ."
8/We believe those awards delineated in question (4) such as engraved plaques, sweaters, warm-up jackets, chenille letters, rain clothes, monogrammed dress jackets and awards of a similar type to be personal to the recipient and reasonable under the circumstances. However, the granting of awards within this general class or category would be prohibited as beyond the implied authority of the institution if the award is not personal to the recipient (has no intrinsic sentimental or personal value) or is not reasonable under the circumstances (has far more than nominal monetary value).