AGO 1981 No. 7 - Jun 23 1981
COLLEGES AND UNIVERSITIES ‑- COMMUNITY COLLEGES ‑- PROPERTY ‑- APPROPRIATIONS ‑- USE AND DISPOSITION OF PROCEEDS FROM SALE OF COMMUNITY COLLEGE REAL PROPERTY
In the event of a sale of community college real property by the State Board for Community College Education pursuant to RCW 28B.50.090(12), the proceeds of that sale are not required, under existing law, to be received, kept and disbursed by the state treasurer but, instead, they may be retained by the college as local funds and expended without a specific legislative appropriation.
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June 23, 1981
Honorable John N. Terrey
State Board for Community
319 Seventh Avenue
Olympia, Washington 98504
Cite as: AGO 1981 No. 7
Dear Dr. Terrey:
By letter previously acknowledged, you requested the opinion of this office on a question which we paraphrase as follows:
In the event of a sale of community college real property by the State Board for Community College Education pursuant to RCW 28B.50.090(12), does RCW 43.88.160(2) require the proceeds thereof to be received, kept and disbursed by the state treasurer or, instead, may those proceeds be retained by the college as local funds and expended without a specific legislative appropriation?
We answer your question in the manner set forth in our analysis.
[[Orig. Op. Page 2]]
RCW 28B.50.090 provides, in pertinent part, as follows:
"The college board shall have general supervision and control over the state system of community colleges. In addition . . . the college board shall . . .:
". . .
"(12) Notwithstanding any other law or statute regarding the sale of state property, sell or exchange and convey any or all interest in any community college real and personal property, except such property as is received by a community college district in accordance with RCW 28B.50.140(8) [private gifts], when it determines that such property is surplus or that such a sale or exchange is in the best interests of the community college system;
". . ."
Based on this statute, the State Board for Community College Education, by a formal resolution adopted on April 9, 1981, authorized and provided for the sale of what is therein referred to as the "South Campus" of Big Bend Community College to a private purchaser for the sum of $1,000,000.1/ In addition, however, the State Board's resolution contains the following proviso:
[[Orig. Op. Page 3]]
"PROVIDED FURTHER that officers of the State Board for Community College Education and the District 18 Board of Trustees are authorized to execute such documents as are required to carry out the intent of this resolution, contingent upon an opinion from the Office of the Attorney General that the sale of the proceeds may be used as described herein."
The legal issue which you have presented to us in the light of the foregoing involves the interrelationship between RCW 28B.50.090(12),supra, and certain language in the state Budget and Accounting Act, chapter 43.88 RCW. Specifically, RCW 43.88.160(2) says that:
"(2) The [state] treasurer shall:
"(a) Receive, keep and disburse all public funds of the state not expressly required by law to be received, kept and disbursed by some other persons:PROVIDED, that this subsection shall not apply to those public funds of the institutions of higher learning which are not subject to appropriation;" (Emphasis supplied)
The question posed, in essence, is whether such proceeds as are derived from the sale of community college real property under RCW 28B.50.090(12) may, by virtue of the underscored proviso, be retained locally and expended without a specific legislative appropriation because (a) they are funds of an institution of higher learning and (b) they are not subject to appropriation.
We may quickly dispose of the first issue. We are advised that the south campus of Big Bend Community College was originally purchased in the early 1960's by the Moses Lake School District‑-which at that time operated a junior college under then existing law. The purchase was funded through the issuance of bonds which are still in the process of being retired through property taxes collected from residents of the school district. See,Moses Lake School Dist. v. Big Bend Community College, 81 Wn.2d 551, 503 P.2d 86 (1972). As is further explained in that case, however, with [[Orig. Op. Page 4]] the passage of the 1967 Community College Act2/ ownership of the property was transferred by operation of law to the State Board for Community College Education and the (newly created) local community college board of trustees. Those two boards are jointly responsible for the operation and management of the community college. Accordingly, it seems clear that whatever proceeds are derived from the sale of the south campus property should properly be characterized as "public funds of the institutions of higher learning" within the meaning of RCW 43.88.160(2), supra.
The remaining question to be resolved is whether or not those proceeds are (also in the words of the same statute) "subject to appropriation." We do not believe that they are.
The provisions of Article VIII, § 4 (Amendment 11) of the Washington Constitution which relate to legislative appropriations apply to two separate categories of funds‑-those which are constitutionally required to be placed in the state treasury and expended only pursuant to an appropriation and those which are only statutorily subject to the same process. Accord,Municipality of Metropolitan Seattle v. O'Brien, 86 Wn.2d 339, 544 P.2d 729 (1976) and cases cited therein. The only funds which are constitutionally subject to an appropriation requirement are those which are required, by Article VII, § 6 of the Constitution, to be paid into the state treasury in the first place; namely, state tax revenues. And, obviously, that is not what we here have before us.
The question, therefore, simply becomes one of legislative intent. As a matter of legislative intent, expressed in some appropriate form, are monies derived from the sale of community college district real property nevertheless also subject to an appropriation requirement so as to preclude their retention, and expenditure, at the local community college level and, instead, to require that they be paid into the state treasury?
[[Orig. Op. Page 5]]
In dealing with this question, we think it appropriate to begin with a brief historic overview of the development of statutory requirements relating to various kinds of state college or university income. For many years, virtually all monies received by those public institutions of higher education from such sources as tuition, other fees, dormitory revenues, admission fees to special lectures, theatrical or athletic events, or what have you, were retained by the institutions and expended, without appropriation, for their continuing operation. More recently, however, legislation has been enacted requiring particular revenue sources to be paid into the state treasury. For example, at the community college level, the Community College Act of 1967 (chapter 8, Laws of 1967) deviated from the norm to the extent of expressly requiring all tuition fees collected by those schools to be paid into the state treasury and credited to certain designated funds or accounts therein. See, RCW 28B.50.360. And then later, by § 3, chapter 333, Laws of 1977, 1st Ex. Sess., the legislature similarly amended the provisions of RCW 28B.15.031 to require all monies received as operating fees at any institution of higher education to ". . . be transmitted to the state treasurer within thirty-five days of receipt to be deposited in the state general fund: . . ." Conversely, because of the absence of any such requirement, the third major component of the charges imposed on students for attending the colleges and universities‑-the services and activities fee provided for by RCW 28B.15.041‑-continues to be retained, administered and expended locally. But similarly (or else, presumably, your question would not even have been asked) there is likewise no express statutory requirement that proceeds derived from the sale of community college real property be paid into the state treasury.
We also think it significant to note a provision in the recently-adopted 1981-83 capital budget (ESSB 3843) which relates, specifically, to the particular matter that gave rise to your inquiry. Section 24 of that appropriations act contains a number of appropriations to the State Board for Community College Education to fund various identified construction projects but, insofar as Big Bend Community College is concerned, it is prefaced with the following language:
"This act assumes that Big Bend community college will design, construct, and equip [[Orig. Op. Page 6]] a business education and vocational classroom building to replace World War II temporary barracks from local funds derived from the sale proceeds of $1,000,000 for the south campus."3/
This provision, of course, is not itself an appropriation. Instead, it represents an apparent legislative recognition of the very point with which we are here concerned; namely, that the sale proceeds referred to will not be paid into the treasury and then appropriated back out but, instead, will be retained, administered and expended locally. And, of course, such a procedure would be entirely consistent with the practices which generally have existed, over the years, in the absence of an express statutory provision to the contrary.
The ultimate inference to be drawn from these evidences of legislative intent seems to us inescapable. When and if the legislature desires to make particular revenues of the colleges and universities subject to the appropriation process, it knows well how to do so;i.e., it expressly requires those revenues to be paid into the state treasury so as to cause them to become subject to appropriation. On the other hand, when it desires to allow those revenues to be retained, administered and expended locally, it simply permits the status quo in the absence of a specific statutory requirement to the contrary to continue. And then, in recognition (at least in this case) of the availability of local funds to pay for a particular program or project, it adjusts the amounts which it appropriates for given programs or projects.
In conclusion, therefore, our direct answer to your question, as above paraphrased, is as follows: In the event of a sale of community college real property by the State Board for Community College Education pursuant to RCW 28B.50.090(12), the proceeds of that sale are not required, under existing law, to be received, kept and disbursed by the state treasurer but, instead, they may be retained by the college as local funds and expended without a specific legislative appropriation.
[[Orig. Op. Page 7]]
We trust that the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
RICHARD M. MONTECUCCO
Senior Assistant Attorney General
*** FOOTNOTES ***
1/See, Resolution No. 81-10.
2/Chapter 8, Laws of 1967, 1st Ex. Sess.
3/See also, § 195, chapter 270, Laws of 1979, 1st Ex. Sess.