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House
File
2568
-
Introduced
HOUSE
FILE
2568
BY
THOMSON
A
BILL
FOR
An
Act
establishing
a
temporary
independent
fiscal
1
restructuring
authority
to
provide
oversight
of
institutions
2
of
higher
education
governed
by
the
state
board
of
regents,
3
providing
penalties,
and
making
appropriations.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
LEGISLATIVE
FINDINGS
AND
INTENT.
The
general
1
assembly
finds
and
declares
all
of
the
following:
2
1.
Public
purpose
and
long-term
state
interest.
The
3
institutions
governed
by
the
state
board
of
regents
exist
to
4
advance
the
long-term
educational,
economic,
cultural,
and
5
civic
vitality
of
the
people
of
Iowa,
including
the
preparation
6
of
Iowa’s
future
leaders
across
every
profession,
industry,
and
7
community.
The
fiscal
stability,
operational
integrity,
and
8
faithful
alignment
of
those
institutions
with
their
founding
9
purposes
is
therefore
a
matter
of
vital
statewide
concern
and
a
10
proper
subject
of
legislative
action
under
the
police
power
of
11
this
state.
The
general
assembly
has
both
the
constitutional
12
authority
and
the
solemn
duty
to
ensure
that
public
resources
13
entrusted
to
these
institutions
are
deployed
efficiently,
14
transparently,
and
in
furtherance
of
the
purposes
for
which
the
15
people
of
Iowa
created
them.
16
2.
Regents
as
creatures
of
statute
——
no
tolerance
for
17
insubordination.
The
state
board
of
regents
is
a
creature
of
18
statute,
established
by
legislative
enactment
and
exercising
19
only
such
authority
as
has
been
delegated
to
it
by
the
20
general
assembly.
The
board
is
subordinate
to
statutes
21
duly
enacted,
and
must
implement
legislative
mandates
fully,
22
faithfully,
and
promptly.
Any
willful
refusal,
delay,
23
obstruction,
circumvention,
or
noncompliance
with
statutory
24
directives,
whether
by
the
board
itself
or
by
university
25
administrators,
employees,
or
agents,
constitutes
ultra
vires
26
conduct
incompatible
with
the
delegated
status
of
the
board’s
27
enterprise
and
will
not
be
tolerated
by
the
general
assembly.
28
Recent
events
have
demonstrated
that
elements
within
the
29
regents
institutions
have
engaged
in
deliberate
efforts
to
30
evade
or
undermine
legislative
mandates,
including
documented
31
instances
in
which
university
personnel
have
openly
discussed
32
strategies
to
circumvent
duly
enacted
laws
while
maintaining
33
superficial
compliance.
Such
conduct
betrays
the
public
trust
34
and
necessitates
enhanced
legislative
oversight
mechanisms.
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3.
Tuition
and
revenue
growth
outpacing
1
inflation.
Tuition,
mandatory
fees,
and
related
charges
at
2
regents
institutions
have
increased
at
rates
substantially
3
exceeding
general
inflation
over
extended
periods,
imposing
4
mounting
and
often
crushing
burdens
on
Iowa
families
5
and
taxpayers.
The
cost
of
attendance
at
Iowa’s
public
6
universities
has
increased
by
more
than
two
hundred
percent
7
over
the
past
two
decades,
far
outstripping
the
growth
in
8
median
family
income
and
the
general
consumer
price
index.
9
Where
in
1981
state
appropriations
accounted
for
seventy-seven
10
percent
of
the
universities’
general
education
budgets
and
11
tuition
accounted
for
twenty-one
percent,
those
proportions
12
have
effectively
reversed.
Today,
tuition
accounts
for
13
approximately
sixty-four
percent
of
general
education
funding
14
while
state
appropriations
account
for
approximately
thirty-one
15
percent.
This
structural
inversion
signals
cost
drivers
16
that
have
not
been
sufficiently
constrained
by
ordinary
17
budget
processes
and
demonstrates
the
failure
of
the
current
18
governance
framework
to
protect
Iowa
families
from
relentless
19
cost
escalation.
20
4.
Federal
credit
expansion
has
weakened
market
21
discipline.
The
general
assembly
finds
that
the
widespread
22
availability
of
federal
student
loans
and
related
financing
23
mechanisms
has
substantially
weakened
ordinary
consumer
price
24
discipline
in
higher
education,
contributing
to
tuition
and
25
cost
escalation
and
reducing
institutional
incentives
to
26
constrain
cost
growth.
This
dynamic
is
especially
acute
where
27
the
borrowers
are
young
adults
and
first-time
financial
actors
28
who
often
lack
the
mature
price
sensitivity
that
normally
29
constrains
consumer
markets.
The
availability
of
easily
30
accessible
credit
has
insulated
regents
institutions
from
the
31
market
discipline
that
would
ordinarily
punish
inefficiency,
32
bloat,
and
mission
drift.
Research
from
the
federal
reserve
33
bank
of
Richmond
and
the
federal
reserve
bank
of
New
York
34
confirms
the
relationship
between
expanded
federal
student
aid
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and
rising
tuition.
This
validates
what
has
become
known
as
1
the
Bennett
hypothesis,
which
states
that
federal
financial
aid
2
policies,
while
well-intentioned,
have
enabled
institutions
to
3
raise
tuition
with
confidence
that
loan
subsidies
would
absorb
4
the
increases.
The
general
assembly
concludes
that
absent
5
external
discipline
imposed
by
legislative
action,
regents
6
institutions
have
insufficient
internal
incentive
to
constrain
7
costs.
8
5.
Absence
of
true
audit
discipline
and
intrusive
9
performance
scrutiny.
Regents
institutions
have
not
been
10
compelled
to
submit,
on
a
routine
and
system-wide
basis,
to
11
the
type
of
intrusive,
independent,
performance-oriented,
12
forensic
audit
discipline
commonly
imposed
in
private-sector
13
restructuring
or
receivership
contexts.
While
compliance
14
and
financial
audits
have
been
conducted,
these
have
15
proven
insufficient
to
identify
structural
inefficiencies,
16
administrative
bloat,
or
misalignment
with
legislative
intent.
17
Internal
audit
functions
have
experienced
chronic
workforce
18
challenges,
with
audit
plans
regularly
falling
short
of
19
completion
due
to
staffing
vacancies
and
resource
constraints.
20
Recent
audit
findings
have
revealed
unacceptable
weaknesses
21
in
operational
controls,
including
weaknesses
at
units
that
22
had
been
the
subject
of
prior
investigations
and
should
have
23
implemented
comprehensive
reforms.
The
general
assembly
finds
24
that
the
existing
audit
framework
lacks
the
forensic
intensity
25
and
independence
necessary
to
impose
genuine
fiscal
discipline
26
on
institutions
that
control
billions
of
dollars
of
public
27
resources.
28
6.
Cost
growth
contrary
to
legislative
intent
——
human
29
burden.
The
general
assembly
finds
that
major
cost
increases
30
in
tuition,
fees,
and
institution-provided
services
have
31
proceeded
in
ways
fundamentally
inconsistent
with
legislative
32
intent
in
creating
and
funding
regents
institutions,
which
is
33
to
provide
accessible,
high-value
public
education
for
Iowans
34
at
a
reasonable
cost.
The
financial
burden
imposed
on
Iowa
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families
has
become
unreasonable
and,
in
effect,
inhumane.
1
Students
report
needing
to
work
multiple
jobs
to
afford
2
attendance.
Graduate
students
describe
tuition
increases
as
3
dollars
diverted
from
rent,
utilities,
child
care,
and
basic
4
necessities.
The
general
assembly
created
these
institutions
5
to
serve
Iowans,
not
to
extract
from
them
ever-increasing
6
resources
while
delivering
services
of
uncertain
value.
The
7
disconnect
between
institutional
cost
growth
and
the
financial
8
capacity
of
ordinary
Iowa
families
represents
a
betrayal
of
9
the
foundational
compact
between
the
people
and
their
public
10
universities.
11
7.
Programmatic
drift
from
measurable
Iowa
benefit.
The
12
general
assembly
finds
that,
over
time,
substantial
portions
13
of
instruction,
research,
and
administrative
activity
at
14
regents
institutions
have
drifted
away
from
measurable
benefit
15
to
Iowa’s
public
interests,
workforce
needs,
civic
health,
16
and
economic
priorities.
Programs
have
proliferated
without
17
rigorous
assessment
of
their
contribution
to
the
state’s
needs.
18
Administrative
positions
have
multiplied
while
faculty
numbers
19
have
declined
relative
to
enrollment.
Academic
offerings
have
20
expanded
into
areas
of
questionable
relevance
to
Iowa’s
economy
21
and
workforce
requirements.
The
general
assembly
concludes
22
that
comprehensive
rejustification
of
all
expenditures
is
23
necessary
to
restore
alignment
with
the
public
purpose
for
24
which
these
institutions
were
created
and
for
which
they
25
continue
to
receive
public
appropriations.
26
8.
Fiscal
opacity
encourages
institutional
monoculture
27
and
diminishes
excellence.
The
general
assembly
finds
28
that
prolonged
insulation
from
rigorous
fiscal
scrutiny
can
29
contribute
to
institutional
monoculture,
reduced
intellectual
30
competitiveness,
and
diminished
robustness
and
value.
A
31
durable
and
excellent
public
university
system
requires
32
diversity
of
thought,
viewpoint
pluralism,
and
competitive
33
excellence
rather
than
unchallenged
uniformity
enforced
through
34
administrative
orthodoxy.
The
general
assembly
is
concerned
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that
fiscal
opacity
and
lack
of
accountability
have
enabled
1
ideological
conformity
to
take
root
in
ways
that
undermine
the
2
intellectual
vitality,
competitive
position,
and
long-term
3
institutional
health
of
Iowa’s
universities.
Fiscal
discipline
4
is
a
legitimate
and
necessary
tool
to
restore
institutional
5
health,
encourage
intellectual
diversity,
and
ensure
that
6
Iowa’s
universities
remain
competitive
with
peer
institutions
7
rather
than
declining
into
comfortable
mediocrity.
8
9.
Recent
capital
projects
demonstrate
scrutiny
9
failures.
The
general
assembly
finds
that
recent
major
10
proposals
affecting
regents-related
facilities
and
long-term
11
financial
obligations
have
been
advanced
without
adequate,
12
independently
validated
justification.
Proposals
involving
13
expenditures
exceeding
two
billion
dollars
were
at
risk
of
14
proceeding
without
sufficient
scrutiny
until
individual
board
15
members
raised
objections
questioning
the
adequacy
of
the
16
underlying
analysis
and
the
reliability
of
key
assumptions.
17
That
such
objections
had
to
come
from
a
single
board
member,
18
rather
than
emerging
naturally
from
robust
institutional
19
processes,
reveals
the
failure
of
existing
oversight
20
mechanisms.
Prior
major
construction
projects
have
experienced
21
significant
cost
overruns,
design
disputes,
and
budget
22
escalations
that
might
have
been
avoided
with
more
rigorous
23
initial
scrutiny.
The
general
assembly
concludes
that
current
24
capital
planning
and
approval
processes
provide
insufficient
25
protection
for
the
state’s
fiscal
interests.
26
10.
Regents
budget
process
lacks
adequate
transparency
and
27
detail.
The
general
assembly
finds
that
the
budget
formation
28
and
approval
process
employed
by
the
state
board
of
regents
29
has
proven
inadequate
to
ensure
meaningful
oversight
by
board
30
members
themselves,
let
alone
by
the
general
assembly
or
the
31
public.
Members
of
the
board
have
expressed
concern
that
they
32
receive
proposed
budgets
with
insufficient
time
for
review,
33
without
access
to
actual
expenditure
data
from
prior
years,
34
without
adequate
information
about
contingency
planning,
and
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without
opportunity
for
substantive
committee
discussion
before
1
approval
votes.
When
board
members
charged
with
fiduciary
2
responsibility
for
billions
of
dollars
of
public
resources
vote
3
against
budget
approval
as
a
protest
against
the
inadequacy
4
of
the
process
itself,
the
general
assembly
concludes
that
5
the
process
has
fundamentally
failed
and
requires
legislative
6
intervention
to
establish
minimum
standards
for
transparency,
7
detail,
and
deliberation.
8
11.
Need
for
extraordinary
oversight
tools.
The
general
9
assembly
finds
that
ordinary
oversight
methods
have
proven
10
inadequate
to
impose
timely,
system-wide
fiscal
discipline
11
on
regents
institutions.
Incremental
reforms,
voluntary
12
compliance
initiatives,
and
traditional
appropriations
13
processes
have
failed
to
arrest
cost
growth,
restore
14
alignment
with
legislative
intent,
or
ensure
accountability.
15
Extraordinary
temporary
restructuring
authority
is
therefore
16
necessary
to
restore
lawful,
transparent,
accountable,
and
17
efficient
operations
and
to
protect
legislative
appropriations
18
and
the
interests
of
Iowa
taxpayers.
The
general
assembly
19
intends
by
this
Act
to
establish
mechanisms
capable
of
20
compelling
the
systemic
reform
that
normal
processes
have
21
failed
to
achieve.
22
12.
Zero-based
budgeting
is
independently
beneficial
23
regardless
of
disputed
facts.
The
general
assembly
finds
24
that
even
if
any
specific
contested
factual
premise
regarding
25
particular
programs,
costs,
or
administrative
decisions
26
were
later
disputed
or
shown
to
be
incomplete,
periodic
27
system-wide,
zero-based
budgeting
and
external
restructuring
28
review
are
independently
beneficial
governance
tools
for
29
large
institutions
that
have
not
previously
been
subjected
30
to
such
intrusive
scrutiny.
Zero-based
budgeting
requires
31
each
expenditure
to
be
justified
anew
rather
than
carried
32
forward
automatically,
thereby
forcing
institutions
to
33
articulate
the
continuing
necessity
and
value
of
each
program
34
and
function.
Such
processes
have
proven
valuable
in
both
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public
and
private
sector
contexts,
enabling
organizations
to
1
identify
inefficiencies,
eliminate
redundancies,
and
reallocate
2
resources
to
higher-value
functions.
The
general
assembly
3
concludes
that
zero-based
budgeting
is
a
sound
governance
4
practice
that
should
be
applied
to
regents
institutions
5
regardless
of
any
particular
factual
controversies,
and
that
6
such
application
is
reasonably
expected
to
reveal
substantial
7
savings
and
efficiency
opportunities.
8
13.
Anticipated
savings
magnitude
and
reinvestment
9
potential.
The
general
assembly
finds,
based
on
restructuring
10
experience
in
other
large
organizations
and
budget-reset
11
methodologies,
that
substantial
savings,
potentially
in
the
12
range
of
fifteen
percent
or
more
of
current
expenditures,
13
are
often
identified
when
zero-based
budgeting
and
intrusive
14
restructuring
tools
are
imposed
on
systems
previously
insulated
15
from
such
scrutiny.
In
2003,
the
state
of
Texas
faced
a
16
projected
ten
billion
dollar
budget
shortfall.
By
requiring
17
state
agencies
to
justify
every
expenditure
from
a
zero
18
base,
the
legislature
identified
opportunities
to
consolidate
19
agencies
and
reduce
costs,
achieving
approximately
one
billion
20
dollars
in
annual
savings
without
tax
increases.
Private
21
sector
applications
of
zero-based
budgeting
have
identified
22
comparable
efficiencies.
The
general
assembly
concludes
that
23
achieving
such
efficiencies
within
the
regents
system
will
24
enable
these
institutions
to
redirect
substantial
resources
25
toward
their
highest-value
educational
and
research
functions,
26
which
are
the
truly
excellent
programs
and
faculty
that
likely
27
have
been
suffering
from
inadequate
funding
due
to
bloat,
28
administrative
overhead,
and
mission
drift
in
other
areas
of
29
the
enterprise.
30
14.
Federal
funds
preservation
——
no
immunity
from
state
31
oversight.
The
general
assembly
finds
that
preservation
of
32
federal
funds
and
compliance
with
mandatory
federal
grant
33
conditions
are
important
public
interests
that
this
Act
is
34
designed
to
protect.
However,
receipt
of
federal
funds
does
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not
immunize
regents
institutions
from
state
fiscal
oversight,
1
audit,
and
restructuring.
The
state
of
Iowa
retains
full
2
authority
to
condition,
structure,
and
oversee
institutional
3
fiscal
operations
while
directing
compliance
with
mandatory
4
federal
requirements.
Nothing
in
this
Act
shall
be
construed
5
to
require
any
action
that
would
violate
binding
federal
law
6
or
result
in
forfeiture
of
federal
funds
to
which
regents
7
institutions
would
otherwise
be
entitled.
However,
neither
8
shall
federal
funding
relationships
serve
as
a
shield
against
9
legitimate
state
oversight
or
as
an
excuse
for
failing
to
10
implement
lawful
state
directives
in
areas
where
federal
11
requirements
do
not
apply.
12
15.
Construction
of
Act.
This
Act
shall
be
construed
13
broadly
to
effectuate
its
purposes,
including
the
restoration
14
of
fiscal
integrity,
transparency,
accountability,
and
15
alignment
with
the
public
purpose
of
regents
institutions.
Any
16
ambiguity
in
the
provisions
of
this
Act
shall
be
resolved
in
17
favor
of
the
authority
granted
herein
to
obtain
data,
impose
18
restructuring
requirements,
mandate
zero-based
budgeting,
19
and
protect
state
fiscal
stability.
The
general
assembly
20
declares
that
the
findings
set
forth
in
this
section
reflect
21
its
considered
legislative
judgment
based
on
extensive
review
22
of
institutional
operations,
public
testimony,
media
reports,
23
academic
research,
and
the
experience
of
other
jurisdictions,
24
and
that
these
findings
shall
inform
the
interpretation
and
25
application
of
all
provisions
of
this
Act.
26
Sec.
2.
NEW
SECTION
.
262C.1
Short
title.
27
This
chapter
shall
be
known
and
may
be
cited
as
the
28
“Independent
Fiscal
Restructuring
Authority
Act”
.
29
Sec.
3.
NEW
SECTION
.
262C.2
Purpose,
findings,
and
30
declarations.
31
1.
Public
purpose,
police
power,
and
constitutional
32
authority.
The
general
assembly
finds
and
declares
all
of
the
33
following:
34
a.
Regents
institutions
exist
to
educate
Iowa’s
future
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leaders
and
sustain
state
economic
and
civic
health.
1
b.
Fiscal
integrity,
affordability,
and
durability
of
these
2
institutions
are
matters
of
compelling
statewide
concern.
3
c.
This
chapter
constitutes
a
valid
exercise
of
the
state’s
4
police
power
to
preserve
fiscal
stability,
protect
taxpayers,
5
and
ensure
efficient
operation
of
public
institutions.
6
d.
The
fiscal
condition
of
regents
institutions
requires
7
extraordinary
legislative
intervention.
8
e.
This
chapter
exercises
the
general
assembly’s
9
appropriations
power
under
Article
III,
section
24,
of
the
10
Constitution
of
the
State
of
Iowa.
11
f.
Contract
modifications
authorized
herein
are
necessary
12
and
reasonable
means
to
serve
a
significant
public
purpose,
13
representing
the
least
impairing
means
available
to
achieve
14
fiscal
stability
while
respecting
contract
rights
to
the
15
maximum
extent
feasible.
16
2.
Ministerial
execution
framework.
The
general
assembly
17
finds
and
declares
all
of
the
following:
18
a.
This
chapter
establishes
fixed
statutory
policy
regarding
19
fiscal
objectives,
performance
metrics,
metric
weights,
20
reduction
targets,
and
procedural
requirements.
21
b.
The
independent
fiscal
restructuring
authority
exercises
22
ministerial
authority
to
apply
criteria
and
execute
policies
23
established
by
statute.
24
c.
The
independent
fiscal
restructuring
authority
does
25
not
formulate
new
fiscal,
academic,
or
institutional
policy;
26
the
authority
implements
policy
choices
made
by
the
general
27
assembly.
28
d.
The
metrics,
weights,
targets,
timelines,
and
procedures
29
in
this
chapter
constitute
an
intelligible
principle
sufficient
30
to
guide
action
by
the
independent
fiscal
restructuring
31
authority
and
permit
judicial
review.
32
e.
Powers
exercised
by
the
independent
fiscal
restructuring
33
authority
are
bounded
by
statutory
criteria
and
subject
34
to
legislative
override,
ensuring
accountability
to
the
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legislative
branch.
1
3.
Legislative
supremacy.
The
general
assembly
finds
and
2
declares
all
of
the
following:
3
a.
The
state
board
of
regents
is
a
statutory
body
with
no
4
inherent
constitutional
authority.
5
b.
All
the
board’s
authority
is
delegated
by
the
general
6
assembly
and
subject
to
legislative
revision
or
revocation.
7
c.
Conduct
inconsistent
with
legislative
directives
8
constitutes
ultra
vires
action.
9
4.
State
subsidy
neutrality.
The
general
assembly
finds
and
10
declares
all
of
the
following:
11
a.
The
state
does
not
penalize
receipt
of
federal
funds.
12
b.
The
state
declines
to
provide
duplicative
state
subsidies
13
for
administrative
functions
that
are
shielded
from
state
14
oversight
by
federal
requirements.
15
c.
Regents
institutions
remain
free
to
accept
federal
16
funds
on
federal
terms.
The
state
may
adjust
only
its
own
17
independent
financial
contributions.
18
d.
Such
action
by
the
state
represents
a
neutral
exercise
of
19
appropriation
authority,
not
retaliation
or
coercion.
20
5.
Meaningful
judicial
review.
The
general
assembly
finds
21
and
declares
all
of
the
following:
22
a.
The
procedural
provisions
of
this
chapter
regulate
the
23
process
of
judicial
review
to
ensure
efficiency,
finality,
and
24
protection
of
state
fiscal
interests.
25
b.
Such
provisions
preserve
meaningful
access
to
courts
26
consistent
with
due
process.
27
c.
Nothing
in
this
chapter
eliminates
judicial
review.
This
28
chapter
channels
and
expedites
such
review.
29
d.
Bond
and
standing
requirements
serve
legitimate
state
30
interests
and
are
proportionally
calibrated
in
this
chapter.
31
6.
Additional
findings.
The
detailed
findings
regarding
32
absence
of
fiscal
discipline,
tuition
growth,
federal
loan
33
market
distortion,
institutional
drift,
capital
planning
34
deficiencies,
internal
audit
capacity,
and
zero-based
budgeting
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benefits
set
forth
in
section
1
of
this
Act
are
incorporated
1
by
reference.
2
7.
Construction.
This
chapter
shall
be
construed
3
broadly
to
effectuate
its
purposes.
Ambiguity
shall
be
4
resolved
in
favor
of
the
functions
of
the
independent
fiscal
5
restructuring
authority
provided
in
this
chapter
consistent
6
with
constitutional
limitations.
7
Sec.
4.
NEW
SECTION
.
262.3
Definitions.
8
As
used
in
this
chapter,
unless
the
context
otherwise
9
requires:
10
1.
“Authority”
means
the
independent
fiscal
restructuring
11
authority.
12
2.
“Board”
means
the
state
board
of
regents.
13
3.
“Contract”
does
not
include
a
collective
bargaining
14
agreement
entered
into
pursuant
to
chapter
20.
15
4.
“Department”
means
the
department
of
management.
16
5.
“Institution”
means
an
institution
specified
in
section
17
262.7,
subsections
1
through
3.
18
6.
“Major
directive”
means
a
directive
of
the
authority
19
that
requires
the
board,
an
institution,
or
an
individual
not
20
employed
by
the
authority
to
carry
out
or
not
carry
out
an
21
action.
22
Sec.
5.
NEW
SECTION
.
262C.4
Independent
fiscal
23
restructuring
authority
——
functions
and
limitations
——
reports.
24
1.
The
independent
fiscal
restructuring
authority
is
25
created
as
a
temporary
instrumentality
of
the
general
assembly
26
exercising
ministerial
authority
to
apply
statutory
criteria
27
to
the
board
and
institutions.
28
2.
The
authority
shall
commence
operations
on
July
1,
2027,
29
and
shall
cease
operations
on
July
1,
2032.
The
authority
is
30
dissolved
on
the
date
it
ceases
operations
and
shall
exercise
31
no
further
authority
unless
otherwise
provided
by
law.
32
3.
A
directive
of
the
authority,
issued
as
provided
in
this
33
chapter,
is
controlling,
notwithstanding
any
provision
of
law,
34
including
but
not
limited
to
chapter
17A,
21,
22,
70A,
or
262,
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or
of
a
board
or
institution
policy,
or
of
a
contract
entered
1
into
by
the
board
or
an
institution
to
the
contrary.
2
4.
The
board
shall
serve
as
the
implementing
body
for
3
directives
of
the
authority.
The
board
shall
not
countermand,
4
delay,
or
interfere
with
the
implementation
or
enforcement
of
5
such
directives.
6
5.
The
authority
shall
submit
quarterly
reports
on
its
7
activities
to
the
general
assembly.
8
6.
The
general
assembly,
by
joint
resolution
subject
to
9
approval
by
the
governor,
may
override
any
directive
of
the
10
authority
by
a
vote
of
at
least
two-thirds
of
the
members
of
11
both
chambers
of
the
general
assembly.
12
7.
Each
major
directive
of
the
authority
shall
expressly
13
state
all
of
the
following
in
writing,
and
a
major
directive
14
that
fails
to
state
all
of
the
following
is
voidable
upon
a
15
timely
challenge
in
district
court:
16
a.
The
specific
statutory
objective
being
served,
which
17
shall
be
one
or
more
of
affordability,
fiscal
integrity,
18
workforce
alignment,
operational
efficiency,
or
taxpayer
19
protection.
20
b.
The
exact
metric
or
metrics
from
section
262C.7
that
21
triggered
the
action,
including
weights
applied
and
final
22
score.
23
c.
The
specific
statutory
authority
under
which
the
24
authority
acts.
25
Sec.
6.
NEW
SECTION
.
262C.5
Composition.
26
1.
The
authority
shall
consist
of
the
following
three
27
members:
28
a.
One
member
be
appointed
by
the
speaker
of
the
house
of
29
representatives.
30
b.
One
member
appointed
by
the
majority
leader
of
the
31
senate.
32
c.
One
member
jointly
selected
by
the
other
two
members,
who
33
shall
serve
as
chairperson.
If
the
other
two
members
cannot
34
agree
on
the
selection
of
the
third
member
within
thirty
days
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of
the
later
of
their
appointments,
the
speaker
of
the
house
1
of
representatives
and
the
majority
leader
of
the
senate
shall
2
jointly
select
the
third
member.
3
2.
A
member
shall
have
demonstrated
experience
in
one
4
or
more
of
public
finance,
higher
education
administration,
5
organizational
restructuring,
public
sector
management,
or
law.
6
A
member
need
not
be
a
member
of
the
general
assembly.
7
3.
A
member
shall
not
have
been
employed
by
an
institution
8
or
the
board
within
the
five
years
preceding
appointment
or
9
have
a
spouse,
parent,
or
child
currently
employed
by
an
10
institution
or
the
board.
11
4.
The
members
specified
in
subsection
1,
paragraphs
“a”
and
12
“b”
,
serve
at
the
pleasure
of
the
appointing
authority.
The
13
chairperson
may
be
removed
by
agreement
of
the
speaker
of
the
14
house
and
the
majority
leader
of
the
senate
or
by
agreement
15
of
the
other
two
members
with
the
concurrence
of
either
the
16
speaker
of
the
house
or
the
majority
leader
of
the
senate.
17
5.
A
vacancy
of
the
members
specified
in
subsection
1,
18
paragraphs
“a”
and
“b”
,
shall
be
filled
in
the
same
manner
as
19
the
original
appointment.
A
vacancy
of
the
member
specified
in
20
subsection
1,
paragraph
“c”
,
shall
be
filled
by
agreement
of
the
21
remaining
two
members,
or
if
they
cannot
agree
within
fifteen
22
days,
by
agreement
of
the
speaker
of
the
house
and
the
majority
23
leader
of
the
senate.
24
6.
Two
members
constitute
a
quorum.
Action
by
the
authority
25
requires
the
affirmative
vote
of
at
least
two
members.
26
7.
Members
shall
be
compensated
at
a
salary
determined
by
27
the
legislative
council
to
be
commensurate
with
the
expertise
28
and
acumen
required
for
the
position,
taking
into
account
the
29
compensation
of
comparable
positions
in
state
government
and
30
the
private
sector.
Members
shall
be
reimbursed
for
actual
and
31
necessary
expenses
incurred
in
the
performance
of
their
duties.
32
8.
Members
and
staff
of
the
authority
are
not
state
33
employees
for
purposes
of
chapter
8A,
subchapter
IV,
or
public
34
employees
for
purposes
of
chapter
20,
but
are
considered
public
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officers
for
purposes
of
chapter
68B.
1
9.
The
authority
may
employ
staff,
retain
consultants,
and
2
contract
for
services
necessary
to
carry
out
its
duties.
Staff
3
of
the
authority
serve
at
the
pleasure
of
the
authority.
4
Sec.
7.
NEW
SECTION
.
262C.6
Zero-based
budgeting.
5
For
the
fiscal
year
beginning
July
1,
2027,
and
the
four
6
subsequent
fiscal
years,
an
institution
shall
establish
7
its
budget
from
a
zero
baseline
annually.
The
institution
8
shall
not
presume
in
favor
of
continuation
of
any
program,
9
position,
or
expenditure.
The
requirement
applies
to
all
10
expenditures
regardless
of
funding
source,
including
general
11
fund
appropriations,
tuition,
federal
funds,
gifts,
and
12
auxiliary
enterprises.
13
Sec.
8.
NEW
SECTION
.
262C.7
Reduction
of
positions
——
14
limitation
on
reclassification.
15
1.
Each
institution
shall
achieve
a
fifteen
percent
16
reduction
in
administrative
full-time
equivalent
positions,
17
relative
to
the
number
of
such
positions
on
July
1,
2027,
no
18
later
than
January
1,
2029.
Each
institution
shall
achieve
19
a
twenty-five
percent
reduction
in
managerial
and
executive
20
full-time
equivalent
positions,
relative
to
the
number
of
such
21
positions
on
July
1,
2027,
no
later
than
July
1,
2030.
22
2.
Following
achievement
of
reductions
required
by
23
subsection
1,
any
increase
in
the
number
of
such
positions
in
24
an
academic
year
shall
be
capped
annually
at
the
lesser
of
the
25
annual
increase
in
the
consumer
price
index
announced
by
the
26
federal
bureau
of
labor
statistics
in
the
previous
academic
27
year
or
enrollment
growth
in
the
previous
academic
year.
This
28
subsection
applies
for
five
years
after
the
authority
ceases
29
operations.
30
3.
An
institution
shall
not
reclassify
a
position
as
31
administrative,
managerial,
or
executive,
or
remove
such
32
a
classification,
without
prior
written
approval
from
the
33
authority.
This
subsection
applies
until
the
authority
ceases
34
operations.
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4.
For
purposes
of
this
section,
each
position
at
an
1
institution
shall
be
classified
according
to
the
integrated
2
postsecondary
education
data
system
human
resources
survey
3
functional
categories.
Administrative
positions
are
those
4
classified
under
institutional
support
and
the
nondirect
5
portions
of
academic
support
and
student
services.
The
6
baseline
shall
be
the
institution’s
most
recent
integrated
7
postsecondary
education
data
system
submission
prior
to
July
8
1,
2027.
9
5.
Attempts
to
evade
the
requirements
of
this
section
10
through
reclassification
of
a
position
constitutes
obstruction
11
under
section
262C.15.
12
Sec.
9.
NEW
SECTION
.
262C.8
Evaluation
of
academic
programs
13
——
metrics
and
weights.
14
1.
The
authority
shall
evaluate
each
academic
program
by
15
audit
at
each
institution
with
a
score
using
the
following
16
metrics
and
weights:
17
a.
Economic
and
workforce
metrics,
constituting
a
minimum
of
18
fifty
percent
of
the
total
score,
including
the
following:
19
(1)
Iowa
workforce
placement
rate,
calculated
as
the
20
percentage
of
graduates
employed
in
Iowa
within
two
years
of
21
graduation,
with
a
weight
of
twenty
percent.
22
(2)
Workforce
alignment
score,
calculated
by
correlation
23
with
the
list
of
high-wage
and
high-demand
jobs
and
24
corresponding
academic
majors
created
pursuant
to
section
25
84A.1B,
subsection
5,
with
a
weight
of
fifteen
percent.
26
(3)
Cost
per
degree,
calculated
as
the
total
program
27
cost
divided
by
the
number
of
degrees
conferred,
compared
to
28
similar
programs
at
peer
institutions,
with
a
weight
of
fifteen
29
percent.
30
b.
Academic
performance
metrics,
constituting
twenty-five
31
to
thirty-five
percent
of
the
total
score,
including
the
32
following:
33
(1)
Graduation
and
completion
rate,
calculated
as
a
34
comparison
to
institutional
and
national
benchmarks,
with
a
35
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weight
of
fifteen
percent.
1
(2)
Enrollment
trends,
calculated
based
on
the
trajectory
2
of
enrollment
over
the
previous
five
years,
or
the
period
of
3
existence
of
the
program
if
less
than
five
years,
with
a
weight
4
of
ten
to
twenty
percent
as
determined
by
the
authority.
5
c.
External
validation
metrics,
constituting
fifteen
6
to
twenty-five
percent
of
the
total
score,
including
the
7
following:
8
(1)
External
funding
ratio,
calculated
by
the
net
dollar
9
amount
of
grants,
contracts,
and
gifts
per
program
dollar,
10
with
a
weight
of
ten
to
fifteen
percent
as
determined
by
the
11
authority.
12
(2)
Accreditation
status,
determined
based
on
whether
13
accreditation
is
required
for
professional
licensure,
14
accreditation
is
voluntary,
or
accreditation
is
not
involved,
15
with
a
weight
of
five
percent
to
ten
percent
as
determined
by
16
the
authority.
17
2.
The
general
assembly
declares
that
Iowa
taxpayers
fund
18
higher
education
primarily
for
workforce
development
and
19
economic
benefit
to
the
state.
The
fifty
percent
weight
of
20
metrics
provided
in
subsection
1,
paragraph
“a”
,
reflects
this
21
policy
determination.
22
3.
The
authority
shall
publish
its
scoring
methodology
23
on
the
general
assembly’s
internet
site
within
sixty
days
of
24
commencing
operations,
including
specification
of
exact
weights
25
within
ranges
established
in
subsection
2.
Using
the
scoring
26
methodology,
the
authority
shall
assign
each
academic
program
a
27
composite
score
from
zero
to
one
hundred.
28
4.
Standards
for
scoring
of
academic
programs
shall
be
as
29
follows:
30
a.
Programs
scoring
below
fifty
shall
be
presumptively
31
subject
to
elimination.
32
b.
Programs
scoring
from
fifty
to
sixty-five
shall
be
33
subject
to
restructuring
review.
34
c.
Programs
scoring
above
sixty-five
shall
be
presumptively
35
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retained
absent
extraordinary
circumstances.
1
Sec.
10.
NEW
SECTION
.
262C.9
Standards
for
audit
of
2
academic
programs.
3
1.
The
authority
shall
not
audit
individual
academic
4
programs
in
isolation.
The
authority
shall
conduct
audits
5
by
academic
college
or
equivalent
administrative
unit.
The
6
authority
shall
audit
all
programs
within
a
college
or
unit
7
simultaneously
before
issuing
any
elimination
orders
for
that
8
college
or
unit.
The
authority
shall
not
issue
elimination
9
orders
for
any
academic
program
until
the
complete
audit
of
the
10
corresponding
college
or
unit
is
complete
and
the
authority
has
11
documented
a
comparative
analysis
of
all
academic
programs
in
12
the
college
or
unit,
to
ensure
elimination
orders
result
from
13
comparative
analysis
across
peer
programs
within
each
college
14
or
unit.
15
2.
A
decision
by
the
authority
to
eliminate,
reduce,
or
16
restructure
an
academic
program
that
scores
below
fifty
in
the
17
scoring
methodology
is
presumptively
based
on
legitimate
fiscal
18
and
educational
grounds.
This
presumption
may
be
rebutted
only
19
by
clear
and
convincing
evidence
that
the
score
was
pretextual
20
and
that
the
actual
motivation
was
based
on
the
viewpoint
or
21
ideological
content
of
the
program.
Any
statistical
disparity
22
in
outcomes
across
academic
disciplines
shall
not
rebut
the
23
presumption
absent
direct
evidence
of
discriminatory
intent.
A
24
challenging
party
shall
have
the
burden
of
proving
pretextual
25
scoring.
If
the
authority
complies
with
the
requirements
of
26
section
262C.8
and
subsection
1
of
this
section,
a
decision
27
by
the
authority
shall
be
presumed
to
have
been
made
in
good
28
faith.
29
3.
a.
The
authority
shall
publish
quarterly
summaries
on
30
the
general
assembly’s
internet
site
showing
the
distribution
31
of
program
elimination,
reduction,
and
restructuring
across
the
32
following
categories:
33
(1)
Science,
technology,
engineering,
and
mathematics.
34
(2)
Humanities
and
social
sciences.
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(3)
Professional
programs
including
business,
law,
and
1
education.
2
(4)
Health
sciences.
3
(5)
Arts
and
communications.
4
b.
A
summary
shall
include
the
number
of
programs
reviewed;
5
the
number
eliminated,
reduced,
or
restructured;
and
the
6
aggregate
savings
by
category.
If
the
authority
materially
7
deviates
from
the
requirements
of
section
262C.8
or
subsection
8
1
of
this
section
in
any
respect,
the
authority
shall
include
9
justification
of
the
deviation
in
the
summary.
10
4.
The
authority
shall
apply
only
the
metrics
and
weights
11
provided
in
section
262C.8
when
conducting
audits
of
academic
12
programs.
The
authority
shall
not
consider
the
ideological
or
13
political
content
of
a
program.
14
5.
All
audit
materials
of
the
authority,
including
but
not
15
limited
to
scoring
materials
for
each
academic
program,
are
16
public
records
under
chapter
22.
17
Sec.
11.
NEW
SECTION
.
262C.10
Programs
and
positions
——
18
authority
orders
and
procedures.
19
1.
After
providing
notice
and
an
opportunity
to
respond
20
pursuant
to
subsection
2,
the
authority
may
order
an
21
institution
to
do
any
of
the
following:
22
a.
Eliminate,
consolidate,
or
restructure
an
academic
23
program.
24
b.
Eliminate
a
specific
employment
position
or
a
specified
25
number
of
positions.
26
c.
Merge
administrative
functions.
27
d.
Establish
or
modify
an
operational
standard.
28
e.
Establish
or
modify
a
procurement
standard,
including
29
but
not
limited
to
consolidating
purchasing
across
institutions
30
or,
where
efficiency
requires,
waiving
competitive
bidding
31
requirements.
32
2.
Before
issuing
an
order
pursuant
to
subsection
1,
33
the
authority
must
provide
written
notice
to
the
affected
34
institution
any
affected
individual
specifying
the
proposed
35
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order,
the
information
required
by
section
262C.4,
subsection
1
7,
and
the
deadline
for
response.
An
affected
institution
or
2
individual
shall
have
thirty
days
to
respond.
3
3.
a.
Before
ordering
the
elimination,
consolidation,
or
4
restructuring
of
any
academic
program,
the
authority
shall
5
certify
in
writing
that
compliance
with
the
order
does
not
6
result
in
any
of
the
following
outcomes:
7
(1)
Breach
any
interstate
compact
to
which
Iowa
is
a
party,
8
including
the
midwest
higher
education
compact.
9
(2)
Violate
the
terms
of
any
multi-state
research
10
consortium
agreement.
11
(3)
Trigger
liability
under
any
multi-jurisdictional
12
contract
or
memorandum
of
understanding.
13
b.
If
compliance
with
the
order
would
result
in
any
of
the
14
outcomes
provided
in
paragraph
“a”
,
the
authority
shall
obtain
15
release
from
the
relevant
obligation,
negotiate
an
amendment
16
thereto,
or
defer
elimination
until
the
obligation
expires.
17
This
paragraph
shall
not
be
construed
to
prohibit
compliance
18
with
the
other,
but
rather
to
require
that
the
relevant
19
obligation
be
appropriately
managed
before
compliance
occurs.
20
4.
If
compliance
with
an
order
under
this
section
would
21
jeopardize
receipt
of
federal
funds,
the
authority
shall
pursue
22
equivalent
savings
from
sources
not
impacted
by
the
federal
23
requirement
or
direct
an
offset
pursuant
to
section
262C.14.
24
Sec.
12.
NEW
SECTION
.
262C.11
Contracts
——
authority
orders
25
and
procedures.
26
1.
a.
The
general
assembly
finds
and
declares
the
27
following:
28
(1)
A
significant
public
problem
exists
regarding
the
29
contracting
practices
of
the
board
and
institutions
that
30
requires
a
legislative
response.
31
(2)
Modification,
suspension,
or
termination
of
such
32
contracts
is
necessary
to
address
this
problem.
33
(3)
Such
actions
are
reasonable
and
appropriate
due
to
34
inclusion
of
mandatory
compensation.
35
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(4)
This
chapter
represents
the
least
impairing
means
to
1
achieve
fiscal
stability.
2
(5)
The
state
may
exercise
its
police
power
to
protect
the
3
public
fisc.
4
b.
With
respect
to
tenure,
the
general
assembly
further
5
finds
and
declares
the
following:
6
(1)
Tenure
constitutes
contractual
protection
against
7
termination
without
cause
but
does
not
guarantee
the
continued
8
existence
of
any
position
or
program.
9
(2)
Bona
fide
program
discontinuation
based
on
fiscal
or
10
educational
grounds
is
a
permissible
basis
for
elimination
of
11
a
position.
12
(3)
This
chapter
codifies
principles
recognized
in
13
guidelines
of
the
American
association
of
university
professors
14
and
judicial
precedent
regarding
financial
exigency
and
program
15
discontinuation.
16
2.
The
authority
may
order
the
modification,
suspension,
17
or
termination
of
any
contract
entered
into
by
the
board
or
an
18
institution
where
necessary
to
achieve
the
statutory
objectives
19
of
this
chapter.
20
3.
Before
ordering
the
modification,
suspension,
or
21
termination
of
a
contract,
the
authority
shall
do
all
of
the
22
following:
23
a.
Issue
a
notice
of
intent
specifying
the
contract
at
24
issue,
the
proposed
modification,
suspension,
or
termination,
25
the
fiscal
savings
required,
and
the
information
required
by
26
section
262C.4,
subsection
7.
27
b.
Provide
a
counterparty
fifteen
calendar
days
to
propose
28
an
alternative
means
of
achieving
equivalent
fiscal
savings.
29
c.
Respond
in
writing
within
ten
days
to
any
counterparty
30
proposal
by
accepting,
rejecting
with
specific
reasons,
or
31
offering
a
counterproposal.
32
d.
Document
the
complete
negotiation
exchange
in
the
33
authority’s
administrative
record.
34
4.
The
authority
may
proceed
to
the
order
only
after
the
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fifteen-day
period
expires
without
a
counterparty
proposal
1
or
good-faith
negotiation
fails
to
produce
an
acceptable
2
alternative.
Subsection
3,
paragraphs
“b”
,
“c”
,
and
“d”
,
do
3
not
apply
if
a
counterparty
cannot
be
located
after
reasonable
4
effort,
delay
would
cause
imminent
harm
to
students
or
5
patients,
or
the
counterparty
has
materially
breached
the
6
contract.
7
Sec.
13.
NEW
SECTION
.
262C.12
Contracts
——
compensation.
8
1.
Upon
issuing
an
order
pursuant
to
section
262C.11,
9
the
authority
shall
authorize
reasonable
compensation
for
10
counterparties
whose
contracts
are
modified,
suspended,
or
11
terminated.
Compensation
shall
be
mandatory.
12
2.
Standards
for
compensation
shall
be
as
follows:
13
a.
For
service
contracts,
compensation
shall
be
the
14
documented
costs
incurred
plus
a
reasonable
margin,
or
the
15
remaining
contract
value,
whichever
is
less.
16
b.
(1)
For
employment
contracts,
compensation
shall
be
a
17
maximum
of
six
months’
salary.
18
(2)
If
the
employment
contract
covers
a
tenured
position,
19
compensation
shall
also
include
a
good-faith
effort
to
reassign
20
the
employee
for
twelve
months.
21
c.
For
construction
contracts,
compensation
shall
be
the
22
documented
costs
plus
demobilization
expenses.
23
3.
Compensation
authorized
under
this
section
constitutes
a
24
vested
statutory
entitlement.
The
state’s
obligation
to
pay
25
is
not
discretionary
and
constitutes
a
binding
obligation.
A
26
claim
for
compensation
may
be
brought
in
district
court.
27
4.
If
payment
of
compensation
authorized
by
this
section
is
28
delayed
beyond
ninety
days
from
issuance
of
an
order
pursuant
29
to
section
262C.11,
interest
shall
accrue
at
the
prime
rate
30
plus
two
percent
per
year.
Interest
shall
accrue
without
the
31
need
for
a
separate
claim.
32
5.
A
counterparty
must
file
a
claim
for
compensation
no
33
later
than
ninety
days
from
issuance
of
an
order
pursuant
to
34
section
262C.11.
The
authority
shall
issue
a
written
decision
35
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on
a
claim
no
later
than
sixty
days
after
it
is
filed.
1
6.
A
counterparty
may
seek
judicial
review
of
the
2
authority’s
decision
in
Polk
county
district
court.
A
petition
3
must
be
filed
within
thirty
days.
The
standard
of
review
4
shall
be
whether
the
authority’s
decision
was
arbitrary
and
5
capricious.
The
court
may
award
additional
compensation
6
but
may
not
enjoin
contract
modification,
suspension,
or
7
termination.
8
Sec.
14.
NEW
SECTION
.
262C.13
Withholding
of
appropriations
9
and
tuition
——
moneys.
10
1.
Each
fiscal
quarter
beginning
on
or
after
July
1,
2027,
11
until
the
quarter
in
which
the
authority
ceases
operations,
12
the
department
shall
withhold
twenty
percent
of
the
moneys
13
appropriated
to
an
institution
from
the
general
fund
of
the
14
state
that
would
otherwise
be
released
to
the
institution
in
15
that
quarter.
16
2.
a.
A
tuition
withholding
fund
is
established
in
the
17
state
treasury
under
the
control
of
the
department
for
each
18
institution.
19
b.
Each
fiscal
quarter
beginning
on
or
after
July
1,
2027,
20
until
the
quarter
in
which
the
authority
ceases
operations,
21
an
institution
shall
remit
twenty
percent
of
tuition
moneys
22
received
each
fiscal
quarter
to
the
department
for
deposit
in
23
its
tuition
withholding
fund.
24
3.
The
department
shall
release
moneys
withheld
pursuant
to
25
subsection
1
or
deposited
pursuant
to
subsection
2
for
a
fiscal
26
quarter
upon
receiving
written
certification
from
the
authority
27
that
the
institution
has
done
of
all
of
the
following
during
28
the
quarter:
29
a.
Complied
with
all
authority
directives.
30
b.
Made
adequate
progress
toward
reduction
of
positions
31
required
by
section
262C.7.
32
c.
Provided
complete
and
accurate
documentation
required
33
pursuant
to
this
chapter.
34
4.
a.
An
institution
may
petition
for
early
release
of
35
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moneys
based
on
hardship.
1
b.
Only
the
following
shall
be
considered
grounds
for
2
hardship.
Impairment
of
any
other
function
does
not
constitute
3
hardship.
4
(1)
Documented
inability
to
meet
payroll
for
direct
5
instructional
faculty
within
thirty
days.
6
(2)
Documented
inability
to
maintain
essential
patient
care
7
functions
at
a
health
system
facility
within
thirty
days.
8
(3)
Documented
inability
to
perform
federally
mandated
9
safety
functions
within
thirty
days.
10
5.
A
petition
for
hardship
shall
include
all
relevant
11
certified
financial
statements,
a
ninety-day
cash
flow
12
projection,
a
list
of
all
nonessential
expenditures
that
have
13
been
suspended,
and
a
certification
that
all
discretionary
14
spending
has
been
suspended.
15
Sec.
15.
NEW
SECTION
.
262C.14
Oversight
of
federal
funds.
16
1.
The
authority
shall
not
order
any
action
that
would
17
constitute
a
mandatory
violation
of
binding
requirements
of
18
federal
law.
However,
federal
pass-through
moneys,
indirect
19
cost
recovery,
and
quasi-endowment
moneys
derived
from
federal
20
sources
shall
be
subject
to
oversight
by
the
authority
the
21
maximum
extent
permitted
by
federal
law.
22
2.
a.
If
an
institution
claims
that
federal
grant
23
conditions
prohibit
oversight
by
the
authority
of
specific
24
moneys
or
programs,
the
institution
shall
provide
the
authority
25
with
a
written
determination
of
federal
agency
supporting
the
26
claim.
27
b.
If
the
authority
determines
the
claim
is
valid
in
a
28
fiscal
year,
the
authority
shall
direct
the
department
to
29
offset
moneys
appropriated
to
the
institution
from
the
general
30
fund
of
the
state
for
the
fiscal
year
that
would
otherwise
31
be
released
by
an
amount
equal
to
the
amount
of
moneys
the
32
institution
has
received
or
will
receive
in
the
fiscal
year
33
from
the
federal
grant.
The
institution
shall
cooperate
fully
34
with
the
authority
and
department
in
the
determination
of
the
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amount
of
moneys
to
be
offset.
The
department
shall
terminate
1
the
offset
for
a
fiscal
year,
and
release
any
moneys
offset
in
2
the
fiscal
year,
if
the
institution
facilitates
oversight
by
3
the
authority
of
the
moneys
or
programs
subject
to
the
claim
4
to
the
satisfaction
of
the
authority
and
the
authority
so
5
certifies
in
writing
to
the
department.
6
c.
If
the
authority
determines
the
claim
is
invalid,
the
7
moneys
or
programs
subject
to
the
claim
shall
be
subject
to
8
oversight
by
the
authority
as
provided
in
this
chapter.
9
3.
Before
directing
an
offset
pursuant
to
subsection
2,
10
paragraph
“b”
,
the
authority
shall
certify
all
of
the
following
11
in
writing
to
the
department:
12
a.
The
offset
is
the
least
restrictive
means
to
achieve
13
fiscal
equivalence.
14
b.
The
offset
does
not
impair
federally
required
program
15
outputs.
16
c.
Alternative
approaches
were
considered
and
found
17
insufficient.
18
Sec.
16.
NEW
SECTION
.
262C.15
Obstruction
——
penalties.
19
1.
An
institution
employee
or
official
found
to
have
20
obstructed
any
function
of
the
authority
shall
be
subject
21
to
state
employment
disqualification
scaled
to
the
severity
22
of
misconduct
as
follows,
and
such
disqualification
extends
23
to
all
positions
funded
by
state
appropriations,
including
24
institutions,
community
colleges,
state
agencies,
and
25
contractors
deriving
more
than
twenty-five
percent
of
their
26
revenue
from
sources
funded
by
state
appropriations:
27
a.
Negligent
noncompliance,
which
is
defined
as
failure
to
28
exercise
reasonable
care,
a
one-year
disqualification.
29
b.
Knowing
obstruction,
which
is
defined
as
intentional
30
delay,
interference,
or
evasion,
a
three-year
disqualification.
31
c.
For
intentional
falsification,
or
destruction,
including
32
false
certification,
fraud,
or
record
destruction,
a
five-year
33
disqualification.
34
2.
Before
imposing
an
employment
disqualification,
the
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authority
shall
do
all
of
the
following:
1
a.
Provide
written
notice
to
the
employee
or
official
2
specifying
the
alleged
conduct,
the
severity
classification,
3
and
the
applicable
disqualification
period.
4
b.
Allow
the
employee
or
official
at
least
fourteen
days
to
5
respond.
6
c.
(1)
Provide
a
thirty-day
cure
period
during
which
the
7
individual
may
remedy
the
deficiency,
provide
evidence
of
8
compliance,
or
demonstrate
the
conduct
was
not
as
alleged.
The
9
authority
shall
issue
a
final
written
determination
only
after
10
the
cure
period
expires
or
is
waived
in
writing.
11
(2)
If
the
alleged
conduct
is
fraud,
intentional
12
destruction
of
records,
or
ongoing
harm
requiring
immediate
13
action,
no
cure
period
is
required.
The
authority
may
issue
a
14
final
written
determination
in
a
time
period
determined
by
the
15
authority
and
shall
schedule
a
hearing
at
which
the
employee
16
or
official
may
be
heard
within
fourteen
days
of
imposition
of
17
disqualification.
18
d.
Good-faith
disputes
regarding
interpretation
or
19
compliance
shall
not
constitute
obstruction.
20
Sec.
17.
NEW
SECTION
.
262C.16
Annual
certification
of
21
compliance
——
penalty.
22
1.
The
president
and
chief
financial
officer
of
each
23
institution
shall
certify
annually
under
oath
that
the
24
institution
is
in
compliance
with
all
directives
of
the
25
authority
and
that
all
information
provided
to
the
authority
in
26
the
previous
year
is
accurate,
truthful,
and
complete.
27
2.
If
the
authority
determines
a
president
or
chief
28
financial
officer
made
a
false
certification
under
this
29
section,
the
authority
may
prohibit
any
increase
in
the
30
individual’s
salary,
impose
forfeiture
of
any
performance
31
bonus,
or
refer
the
individual
for
discipline
under
chapter
70A
32
or
to
the
attorney
general
for
investigation.
The
authority
33
shall
give
due
consideration
to
the
severity
of
the
falsehood
34
and
impose
a
proportional
penalty.
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3.
Good-faith
reliance
on
information
provided
by
1
subordinates
combined
with
reasonable
diligence,
and
prompt
2
correction
upon
discovery
of
any
error,
constitutes
a
defense
3
under
this
section.
4
Sec.
18.
NEW
SECTION
.
262C.17
Whistleblower
protection.
5
1.
For
purposes
of
this
section,
“employee”
means
6
an
employee
of
an
institution,
of
a
contractor
with
the
7
institution,
or
of
an
entity
affiliated
with
the
institution.
8
2.
An
employee
who
reports
conduct
to
the
authority
9
reasonably
believed
to
constitute
obstruction,
evasion,
10
or
noncompliance
with
this
chapter
shall
not
be
subject
to
11
retaliation.
Retaliation
against
such
an
employee
constitutes
12
obstruction
under
section
262C.15.
13
3.
The
authority
shall
establish
a
confidential
means
for
14
employees
to
report
to
the
authority
under
subsection
1.
The
15
identity
of
an
employee
who
makes
a
confidential
report
shall
16
remain
confidential
unless
the
authority
determines
that
due
17
process
requires
disclosure.
18
4.
An
employee
whose
report
leads
to
identification
of
19
savings
exceeding
one
hundred
thousand
dollars
may
be
eligible
20
for
a
recognition
payment
not
to
exceed
five
percent
of
savings
21
achieved
in
the
first
year
of
implementation,
but
not
more
than
22
fifty
thousand
dollars,
as
determined
by
the
authority.
23
Sec.
19.
NEW
SECTION
.
262C.18
Subpoena
power
and
24
information
access
——
penalty.
25
1.
The
authority
may
subpoena
documents,
data,
and
26
testimony
as
it
determines
necessary
to
carry
out
its
27
functions.
A
document
shall
not
be
withheld
based
on
28
proprietary
interest,
as
a
trade
secret,
or
based
on
a
29
nondisclosure
agreement.
Proprietary
information
shall
be
30
protected
through
confidentiality
protocols
established
by
the
31
authority
rather
than
denial
of
access.
32
2.
The
following
university-affiliated
entities
are
subject
33
to
access
of
information
and
subpoena
by
the
authority:
34
a.
Any
tax-exempt
organization
under
section
501(c)(3)
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of
the
Internal
Revenue
Code
using
the
name,
branding,
or
1
trademarks
of
an
institution.
2
b.
Any
entity
employing
personnel
whose
compensation
is
3
funded
in
whole
or
in
part
by
state
appropriations.
4
c.
Any
entity
managing,
holding,
or
administering
assets
5
related
to
state-funded
facilities,
programs,
or
operations.
6
d.
Any
entity
receiving
pass-through
funding
from
an
7
institution.
8
e.
Any
institution
foundation,
research
park,
alumni
9
association,
athletics
fundraising
entity,
and
faculty
practice
10
plan.
11
3.
A
response
to
a
subpoena
of
the
authority
shall
include
12
a
sworn
certification
of
the
search
methodology
employed.
The
13
authority
may
subpoena
the
chief
information
officer
or
records
14
officer
of
the
subject
of
a
subpoena
for
testimony
regarding
15
the
search
methodology.
16
4.
A
subpoenaed
document
shall
be
produced
within
sixty
17
days
unless
the
authority
grants
a
written
extension.
If
18
the
subject
of
the
subpoena
does
not
produce
the
document
19
within
the
deadline,
such
action
creates
a
presumption
of
20
noncompliance.
21
5.
Any
claim
of
privilege
shall
be
accompanied
by
a
22
privilege
log
submitted
simultaneously
with
the
first
23
production
to
the
authority.
Failure
to
provide
a
timely
24
privilege
log
constitutes
waiver
of
privilege.
25
6.
Knowing
and
willful
provision
of
materially
false
26
information
to
the
authority,
or
knowing
and
willful
27
destruction
of
records
responsive
to
an
authority
subpoena,
28
constitutes
an
aggravated
misdemeanor.
The
authority
shall
29
refer
the
matter
to
the
attorney
general
for
investigation.
30
Sec.
20.
NEW
SECTION
.
262C.19
Litigation
management.
31
1.
Standing
to
challenge
action
of
the
authority
shall
be
32
limited
to
persons
with
direct,
personal,
and
particularized
33
harm.
Generalized
grievances
do
not
confer
standing.
34
Institutions
have
standing
only
for
direct
institutional
35
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2568
interests.
1
2.
Polk
county
district
court
shall
be
the
primary
venue
2
for
challenges
to
action
of
the
authority.
Alternative
venue
3
is
available
for
parties
with
no
connection
to
Polk
county
as
4
determined
by
the
district
court.
5
3.
Dispositive
motions
shall
be
decided
by
the
court
within
6
thirty
days.
Trial
shall
occur
within
one
hundred
twenty
days
7
of
filing
of
the
answer.
8
4.
Granting
of
preliminary
relief
shall
require
clear
9
and
convincing
evidence
of
likelihood
of
success
on
the
10
merits,
irreparable
harm,
and
a
balance
of
equities
favoring
11
the
movant.
The
public
interest
is
presumptively
served
by
12
implementation
of
the
duties
of
the
authority
provided
in
this
13
chapter.
14
5.
a.
For
an
as-applied
challenge
to
a
specific
action
of
15
the
authority,
the
court
shall
set
a
bond
to
equal
the
greater
16
of
twenty-five
thousand
dollars
or
one
percent
of
the
annual
17
savings
projected
from
the
challenged
action,
not
to
exceed
18
five
hundred
thousand
dollars.
The
court
shall
determine
19
projected
savings
based
on
the
authority’s
administrative
20
record.
21
b.
For
a
facial
constitutional
challenge
to
the
validity
of
22
this
Act
or
a
portion
thereof,
the
court
may
in
its
discretion
23
reduce
or
waive
the
bond
requirement
provided
in
paragraph
“a”
.
24
6.
Authority
members
and
staff
shall
have
qualified
25
official
immunity
for
actions
within
the
scope
of
their
26
authority
under
section
669.14A.
Sovereign
immunity
is
27
preserved
except
as
expressly
waived
for
compensation
claims
28
under
section
262C.12.
29
Sec.
21.
NEW
SECTION
.
262C.20
Reinstatement
of
academic
30
programs.
31
1.
An
academic
program
eliminated
by
the
authority
shall
not
32
be
reinstated
for
whichever
period
is
shorter
absent
express
33
legislative
authorization
by
statute:
34
a.
Five
years
from
the
date
of
elimination.
35
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b.
Two
years
from
the
date
the
authority
ceases
operations.
1
2.
a.
An
academic
program
eliminated
by
the
authority
2
shall
be
associated
by
the
board
with
its
code
in
the
federal
3
classification
of
instructional
programs
at
the
time
of
4
elimination.
5
b.
A
proposed
new
academic
program
with
the
same
six-digit
6
classification
of
instructional
programs
code
as
an
eliminated
7
program
is
conclusively
substantially
similar
to
the
eliminated
8
program
and
shall
be
subject
to
subsection
1.
9
c.
(1)
A
proposed
new
academic
program
with
the
same
10
four-digit
classification
of
instructional
programs
code
prefix
11
as
an
eliminated
program
is
presumptively
substantially
similar
12
to
the
eliminated
program.
Eliminated
academic
programs
13
proposed
under
different
names,
proposed
to
be
implemented
by
a
14
different
part
of
the
institution,
or
proposed
with
reorganized
15
structure
or
content
presumptively
substantially
similar
to
16
the
eliminated
program
regardless
of
the
classification
of
17
instructional
programs
code.
18
(2)
The
presumption
of
substantial
similarity
may
be
19
rebutted
by
clear
and
convincing
evidence
that
the
proposed
new
20
program
serves
fundamentally
different
educational
objectives.
21
If
the
presumption
is
not
successfully
rebutted,
the
new
22
program
shall
be
subject
to
subsection
1.
23
3.
A
proposed
new
program
is
also
substantially
similar
to
24
an
eliminated
program
and
subject
to
subsection
1
if
any
two
25
of
the
following
apply:
26
a.
The
two
programs
overlap
more
than
fifty
percent
in
27
course
content,
research
focus,
or
programmatic
activities.
28
b.
More
than
fifty
percent
of
personnel
for
the
proposed
new
29
academic
program
are
drawn
from
the
eliminated
program.
30
c.
More
than
fifty
percent
of
the
budget
for
the
proposed
31
new
academic
program
is
derived
from
reallocated
funds
from
the
32
eliminated
program.
33
d.
The
proposed
new
academic
program
primarily
serves
34
students
who
would
have
enrolled
in
the
eliminated
program.
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e.
The
new
program
was
proposed
by
personnel
from
the
1
eliminated
program,
or
personnel
in
the
new
program
report
to
2
personnel
from
the
eliminated
program.
3
4.
An
institution
may
petition
for
a
determination
that
4
a
proposed
new
academic
program
is
not
substantially
similar
5
to
an
eliminated
program.
The
determination
shall
be
made
in
6
writing
within
sixty
days.
A
petition
shall
be
made
to
the
7
authority
unless
it
has
ceased
operations,
in
which
case
it
8
shall
be
made
to
the
auditor
of
state.
Judicial
review
of
the
9
determination
may
be
sought
in
district
court.
10
5.
Subsection
1
does
not
apply
to
academic
programs
required
11
by
federal
law,
required
for
accreditation
necessary
for
12
federal
financial
aid
eligibility,
or
required
by
court
order.
13
The
institution
shall
document
the
applicable
requirement
as
14
required
by
the
authority,
or
by
the
auditor
of
state
if
the
15
authority
has
ceased
operations.
16
Sec.
22.
NEW
SECTION
.
262C.21
Compliance
audits.
17
The
auditor
of
state
shall
conduct
annual
compliance
audits
18
to
determine
if
the
board
and
institutions
are
in
compliance
19
with
this
chapter.
An
audit
shall
be
conducted
in
each
fiscal
20
year
the
authority
is
in
operation
and
the
two
fiscal
years
21
after
it
ceases
operations.
The
auditor
shall
report
the
22
results
of
each
audit
to
the
general
assembly.
23
Sec.
23.
NEW
SECTION
.
262C.22
Certification
of
savings.
24
1.
As
part
of
the
annual
audit
conducted
pursuant
to
25
section
262C.21,
the
auditor
of
state
shall
certify
the
dollar
26
amount
of
total
savings
across
all
institutions
each
fiscal
27
year
achieved
as
a
result
of
implementation
of
this
chapter.
28
Savings
shall
be
determined
by
comparison
to
spending
in
the
29
fiscal
year
beginning
July
1,
2026.
30
2.
If
the
amount
of
savings
certified
in
any
fiscal
year
is
31
less
than
fifteen
percent,
the
auditor
of
state
shall
include
32
this
in
the
report
required
by
section
262C.21.
The
board
33
shall
establish
a
remediation
plan
to
increase
the
amount
of
34
savings
for
the
next
fiscal
year
to
at
least
fifteen
percent
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and
submit
the
plan
to
the
general
assembly
and
the
auditor.
1
Sec.
24.
NEW
SECTION
.
262C.23
Use
of
savings
——
2
appropriations.
3
1.
Moneys
saved
by
an
institution
as
a
result
of
4
implementation
of
this
chapter,
as
certified
pursuant
to
5
section
262C.22,
subsection
1,
in
the
fiscal
year
beginning
6
July
1,
2027,
and
the
four
subsequent
fiscal
years,
are
7
appropriated
to
the
authority
to
cover
the
costs
associated
8
with
the
implementation
of
this
chapter.
9
2.
Upon
certification
by
the
authority
to
the
department
10
each
fiscal
year,
in
a
manner
provided
by
the
department,
that
11
no
further
funding
is
required
by
the
authority
for
the
fiscal
12
year,
the
remainder
of
such
moneys
are
appropriated
to
the
13
respective
institutions
at
which
the
savings
accrued
to
be
used
14
for
the
purposes
of
tuition
reduction,
need-based
financial
15
aid,
high-priority
academic
programs
meeting
demonstrated
16
workforce
needs,
and
deferred
maintenance.
In
no
case
shall
17
such
moneys
be
used
to
restore
an
academic
program
or
position
18
eliminated
by
the
authority.
19
3.
If
the
moneys
appropriated
to
the
authority
in
subsection
20
1
are
insufficient
to
fully
cover
the
costs
of
the
authority
21
associated
with
the
implementation
of
this
chapter
in
a
fiscal
22
year,
an
amount
of
moneys
appropriated
to
the
institutions
23
from
the
general
fund
of
the
state
in
the
fiscal
year
is
24
appropriated
to
the
authority
for
that
purpose
in
the
fiscal
25
year.
The
authority
shall
certify
the
amount
of
moneys
needed
26
for
the
fiscal
year
to
the
department
in
a
manner
provided
27
by
the
department.
The
amount
appropriated
shall
be
divided
28
evenly
across
the
institutions.
29
Sec.
25.
NEW
SECTION
.
262C.24
Limitation
on
auditor
30
authority.
31
The
auditor
of
state
shall
have
no
authority
under
this
32
chapter
that
is
not
expressly
provided
for
in
this
chapter.
33
Sec.
26.
NEW
SECTION
.
262C.25
Accreditation
——
construction
34
of
chapter.
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1.
This
chapter
shall
not
be
construed
to
require
any
action
1
that
would
cause
loss
of
regional
or
specialized
accreditation
2
required
for
federal
financial
aid
eligibility.
3
2.
The
authority
shall
consult
with
relevant
accrediting
4
bodies
before
taking
any
action
that
may
implicate
5
accreditation
standards.
6
3.
If
an
accrediting
body
provides
written
notice
7
that
a
proposed
action
by
the
authority
would
jeopardize
8
accreditation,
the
authority
shall
modify
the
action
to
9
preserve
accreditation
or
submit
to
the
accrediting
body
10
a
written
explanation
of
why
the
action
is
necessary
and
11
certification
that
alternative
means
were
unavailable.
12
Sec.
27.
NEW
SECTION
.
262C.26
Severability.
13
1.
Pursuant
to
section
4.12,
if
any
provision
of
this
14
chapter
is
held
invalid,
the
invalidity
shall
not
affect
other
15
provisions
that
can
operate
independently.
16
2.
Severability
extends
to
individual
enforcement
17
mechanisms
provided
in
this
chapter;
to
individual
metrics;
18
to
individual
reduction
targets;
to
procedural
mechanisms
19
including
notice
periods,
cure
periods,
and
negotiation
20
periods;
and
to
individual
definitions.
A
court
shall
21
sever
provisions
of
this
chapter
at
the
most
granular
level
22
consistent
with
the
legislative
intent
expressed
in
this
Act.
23
3.
The
general
assembly
declares
that
it
would
have
enacted
24
this
Act
and
each
provision
thereof
independently.
25
EXPLANATION
26
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
27
the
explanation’s
substance
by
the
members
of
the
general
assembly.
28
This
bill
establishes
a
temporary
independent
fiscal
29
restructuring
authority
(authority)
to
provide
oversight
of
30
institutions
of
higher
education
(institutions)
governed
by
the
31
state
board
of
regents
(board).
32
The
authority
is
created
as
a
temporary
instrumentality
33
of
the
general
assembly
exercising
ministerial
authority
to
34
apply
statutory
criteria
to
the
board
and
institutions.
The
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authority
shall
commence
operations
on
July
1,
2027,
and
shall
1
cease
operations
on
July
1,
2032.
2
A
directive
of
the
authority,
issued
as
provided
in
the
3
bill,
is
controlling,
notwithstanding
any
provision
of
law,
4
or
of
a
board
or
institution
policy,
or
of
a
contract
entered
5
into
by
the
board
or
an
institution
to
the
contrary.
The
6
bill
provides
that
the
board
shall
serve
as
the
implementing
7
body
for
directives
of
the
authority
and
prohibits
the
board
8
from
countermanding,
delaying,
or
interfering
with
the
9
implementation
or
enforcement
of
such
directives.
The
bill
10
requires
the
authority
to
submit
quarterly
reports
on
its
11
activities
to
the
general
assembly.
12
The
bill
authorizes
the
general
assembly,
by
joint
13
resolution
subject
to
approval
by
the
governor,
to
override
any
14
directive
of
the
authority
by
a
vote
of
at
least
two-thirds
15
of
the
members
of
both
chambers
of
the
general
assembly.
The
16
bill
specifies
required
content
of
major
directives
of
the
17
authority
and
provides
that
such
directives
are
voidable
upon
a
18
timely
challenge
in
district
court
if
the
required
content
is
19
not
included.
The
bill
provides
for
judicial
review
of
board
20
activities.
21
The
authority
shall
consist
of
a
member
appointed
by
the
22
speaker
of
the
house
of
representatives,
a
member
appointed
23
by
the
majority
leader
of
the
senate,
and
a
member
jointly
24
selected
by
the
other
two
members,
who
shall
serve
as
25
chairperson.
The
bill
provides
additional
requirements
and
26
procedures
for
the
membership
of
the
authority.
27
The
bill
requires
an
institution,
for
the
fiscal
year
28
beginning
July
1,
2027,
and
the
four
subsequent
fiscal
years,
29
to
establish
its
budget
from
a
zero
baseline
annually.
The
30
institution
shall
not
presume
in
favor
of
continuation
of
any
31
program,
position,
or
expenditure.
The
requirement
applies
to
32
all
expenditures.
33
The
bill
requires
each
institution
to
achieve
a
15
percent
34
reduction
in
administrative
full-time
equivalent
positions,
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relative
to
the
number
of
such
positions
on
July
1,
2027,
no
1
later
than
January
1,
2029.
The
bill
requires
each
institution
2
to
achieve
a
25
percent
reduction
in
managerial
and
executive
3
full-time
equivalent
positions,
relative
to
the
number
of
4
such
positions
on
July
1,
2027,
no
later
than
July
1,
2030.
5
The
bill
provides
for
capped
increases
in
the
number
of
such
6
positions
for
a
period
thereafter.
The
bill
prohibits
changes
7
in
classification
relating
to
such
positions
without
prior
8
written
approval
from
the
authority.
9
The
bill
requires
the
authority
to
evaluate
each
academic
10
program
by
audit
at
each
institution
with
a
score
using
metrics
11
and
weights
specified
in
the
bill
and
a
scoring
methodology
12
specified
and
published
by
the
board.
The
bill
provides
13
procedures
and
standards
for
the
authority
to
audit
academic
14
programs
based
on
the
scoring
methodology,
with
a
higher
15
scoring
indicating
a
program
shall
be
presumptively
retained
16
and
a
lower
score
indicating
the
program
shall
be
presumptively
17
subject
to
elimination.
18
The
bill
provides
procedures
for
the
authority
to
order
19
an
institution
to
eliminate,
consolidate,
or
restructure
an
20
academic
program;
eliminate
a
specific
employment
position
or
a
21
specified
number
of
positions;
merge
administrative
functions;
22
establish
or
modify
an
operational
standard;
and
establish
or
23
modify
a
procurement
standard.
The
bill
provides
for
notice
24
and
an
opportunity
to
respond
and
other
procedures
for
such
25
orders.
The
bill
requires
the
authority
to
publish
quarterly
26
summaries
showing
the
distribution
of
program
elimination,
27
reduction,
and
restructuring.
28
The
bill
authorizes
the
authority
to
order
the
modification,
29
suspension,
or
termination
of
any
contract,
other
than
a
30
collective
bargaining
agreement,
entered
into
by
the
board
31
or
an
institution
where
necessary
to
achieve
the
statutory
32
objectives
of
the
bill.
The
bill
provides
procedures
for
such
33
orders.
The
bill
requires
that
counterparties
be
provided
34
reasonable
compensation
when
a
contract
is
modified,
suspended,
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or
terminated.
The
bill
provides
standards
and
procedures
for
1
such
compensation.
The
bill
specifies
that
such
compensation
2
is
not
discretionary
and
constitutes
a
binding
obligation.
3
The
bill
requires
the
department
of
management
(department)
4
to
withhold
20
percent
of
the
moneys
appropriated
to
an
5
institution
from
the
general
fund
that
would
otherwise
be
6
released
to
the
institution
in
that
quarter,
in
each
fiscal
7
quarter
beginning
on
or
after
July
1,
2027,
until
the
quarter
8
in
which
the
authority
ceases
operations.
In
each
fiscal
9
quarter,
an
institution
is
required
to
remit
20
percent
of
10
tuition
moneys
received
to
the
department.
The
bill
provides
11
for
the
release
of
general
fund
and
tuition
moneys
when
the
12
authority
certifies
to
the
department
that
an
institution
has
13
carried
out
specified
actions
to
comply
with
the
bill.
An
14
institution
may
petition
for
early
release
of
moneys
based
on
15
hardship
as
specified
in
the
bill.
16
The
bill
prohibits
the
authority
from
ordering
any
action
17
that
would
constitute
a
mandatory
violation
of
binding
18
requirements
of
federal
law.
The
bill
provides
that
federal
19
pass-through
funds,
indirect
cost
recovery,
and
quasi-endowment
20
funds
derived
from
federal
sources
shall
be
subject
to
21
oversight
by
the
authority
the
maximum
extent
permitted
22
by
federal
law.
The
bill
establishes
a
process
whereby
an
23
institution’s
general
fund
appropriations
are
offset
by
the
24
department
in
an
amount
equal
to
federal
funds
not
subject
to
25
oversight
by
the
authority.
26
The
bill
provides
that
an
institution
employee
or
official
27
found
to
have
obstructed
any
function
of
the
authority
shall
28
be
subject
to
state
employment
disqualification.
The
period
29
of
disqualification
increases
based
on
the
severity
of
30
the
obstruction.
Disqualification
includes
employment
by
31
institutions,
community
colleges,
state
agencies,
and
certain
32
contractors.
The
bill
provides
for
notice,
an
opportunity
33
to
respond,
and
other
procedures
for
such
disqualification.
34
The
bill
specifies
other
activities
that
also
constitute
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obstruction.
1
The
bill
requires
the
president
and
chief
financial
officer
2
of
each
institution
to
certify
annually
under
oath
that
3
the
institution
is
in
compliance
with
all
directives
of
the
4
authority
and
that
all
information
provided
to
the
authority
5
in
the
previous
year
is
accurate,
truthful,
and
complete.
6
The
bill
provides
penalties
including
prohibition
of
salary
7
increases,
forfeiture
of
performance
bonuses,
and
referral
for
8
discipline
under
Code
chapter
70A
or
to
the
attorney
general
9
for
investigation.
10
The
bill
prohibits
retaliation
against
an
employee
who
11
reports
conduct
to
the
authority
reasonably
believed
to
12
constitute
obstruction,
evasion,
or
noncompliance
with
the
13
bill.
The
bill
provides
for
confidential
reporting
to
the
14
authority.
The
bill
provides
for
a
recognition
payment
to
15
such
an
employee
whose
report
results
in
a
specified
amount
of
16
savings.
17
The
bill
authorizes
the
authority
to
subpoena
documents,
18
data,
and
testimony
as
it
determines
necessary
to
carry
out
19
its
functions.
The
bill
provides
procedures
for
subpoenas.
20
University-affiliated
entities
subject
to
subpoena
include
21
any
tax-exempt
organization
using
the
name,
branding,
or
22
trademarks
of
an
institution;
any
entity
employing
personnel
23
whose
compensation
is
funded
in
whole
or
in
part
by
state
24
appropriations;
any
entity
managing,
holding,
or
administering
25
assets
related
to
state-funded
facilities,
programs,
or
26
operations;
any
entity
receiving
pass-through
funding
from
27
an
institution;
and
any
institution
foundation,
research
28
park,
alumni
association,
athletics
fundraising
entity,
and
29
faculty
practice
plan.
Knowing
and
willful
provision
of
30
materially
false
information
to
the
authority,
or
knowing
and
31
willful
destruction
of
records
responsive
to
an
authority
32
subpoena,
constitutes
an
aggravated
misdemeanor.
An
aggravated
33
misdemeanor
is
punishable
by
confinement
for
no
more
than
two
34
years
and
a
fine
of
at
least
$855
but
not
more
than
$8,540.
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The
bill
provides
procedures
for
judicial
review
of
action
1
by
the
authority,
including
standing,
venue,
timelines,
2
the
standard
of
review,
bonding
requirements,
and
qualified
3
immunity
for
authority
members
and
staff.
4
The
bill
prohibits
reinstatement
of
an
academic
program
5
eliminated
by
the
authority
for
five
years
from
the
date
6
of
elimination
or
two
years
from
the
date
the
authority
7
ceases
operations,
whichever
is
shorter.
The
bill
provides
8
procedures
and
standards
for
an
institution
to
petition
for
9
a
determination
that
a
proposed
new
academic
program
is
not
10
substantially
similar
to
an
eliminated
program.
A
proposed
11
new
academic
program
found
to
be
substantially
similar
12
to
an
eliminated
program
is
subject
to
the
prohibition
on
13
reinstatement.
A
petition
shall
be
made
to
the
authority
14
unless
it
has
ceased
operations,
in
which
case
it
shall
be
15
made
to
the
auditor
of
state
(auditor).
The
prohibition
16
does
not
apply
to
academic
programs
required
by
federal
law,
17
required
for
accreditation
necessary
for
federal
financial
aid
18
eligibility,
or
required
by
court
order.
19
The
bill
requires
the
auditor
to
conduct
annual
compliance
20
audits
to
determine
if
the
board
and
institutions
are
in
21
compliance
with
the
bill.
An
audit
shall
be
conducted
in
each
22
fiscal
year
the
authority
is
in
operation
and
the
two
fiscal
23
years
after
it
ceases
operations.
The
auditor
shall
report
the
24
results
of
each
audit
to
the
general
assembly.
25
As
part
of
the
annual
audit,
the
auditor
is
also
required
26
to
certify
the
dollar
amount
of
total
savings
across
all
27
institutions
each
fiscal
year
achieved
as
a
result
of
28
implementation
of
the
bill.
If
the
amount
of
savings
certified
29
in
any
fiscal
year
is
less
than
15
percent,
the
board
shall
30
establish
a
remediation
plan
to
increase
the
amount
of
savings
31
for
the
next
fiscal
year
to
at
least
15
percent.
32
The
bill
appropriates
moneys
saved
by
an
institution
as
33
a
result
of
implementation
of
the
bill,
in
the
fiscal
year
34
beginning
July
1,
2027,
and
the
four
subsequent
fiscal
years,
35
-37-
LSB
6150HH
(2)
91
je/ns
37/
38
H.F.
2568
to
the
authority
to
cover
the
costs
associated
with
the
1
implementation
of
the
bill.
2
Upon
certification
by
the
authority
to
the
department
3
each
fiscal
year
that
no
further
funding
is
required
by
the
4
authority
for
the
fiscal
year,
the
bill
appropriates
the
5
remainder
of
such
funds
to
the
respective
institutions
at
which
6
the
savings
accrued
to
be
used
for
the
purposes
of
tuition
7
reduction,
need-based
financial
aid,
high-priority
academic
8
programs
meeting
demonstrated
workforce
needs,
and
deferred
9
maintenance.
10
If
the
funds
appropriated
to
the
authority
are
insufficient
11
to
fully
cover
the
costs
of
the
authority
in
a
fiscal
year,
12
the
bill
appropriates
an
amount
of
moneys
appropriated
to
the
13
institutions
from
the
general
fund
in
the
fiscal
year
to
the
14
authority
for
that
purpose.
The
amount
appropriated
shall
be
15
divided
evenly
across
the
institutions.
16
The
bill
shall
not
be
construed
to
require
any
action
that
17
would
cause
loss
of
regional
or
specialized
accreditation
18
required
for
federal
financial
aid
eligibility.
The
bill
19
requires
the
authority
to
consult
with
relevant
accrediting
20
bodies
before
taking
any
action
that
may
implicate
21
accreditation
standards.
If
an
accrediting
body
provides
22
written
notice
that
a
proposed
action
by
the
authority
would
23
jeopardize
accreditation,
the
authority
is
required
to
24
modify
the
action
to
preserve
accreditation
or
submit
to
the
25
accrediting
body
an
explanation
of
why
the
action
is
necessary
26
and
certification
that
alternative
means
were
unavailable.
27
The
bill
includes
legislative
findings
and
rules
of
28
construction.
29
The
bill
provides
for
severability.
30
-38-
LSB
6150HH
(2)
91
je/ns
38/
38