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AN ACT relating to Kentucky State University, making an appropriation therefor, 1
and declaring an emergency. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
Section 1. (1) The General Assembly hereby finds a significant lack of 4
efficiency and effectiveness in the instructional and operational performance of Kentucky 5
State University and determines that immediate appropriate corrective action is warranted 6
as follows: 7
(a) Whereas Kentucky State University does not have sufficient resources or 8
reserves to continue operating as currently structured, the General Assembly declares that 9
a state of financial exigency exists at Kentucky State University from the effective date of 10
this Act until June 30, 2023. Notwithstanding any existing Kentucky State University 11
policies relating to financial exigency, the Kentucky State University board of regents 12
shall execute a new financial exigency policy by May 15, 2022, that will expedite the 13
restructuring of university operations. The board of regents shall provide a copy of the 14
new exigency policy to the Council on Postsecondary Education and the director of the 15
Legislative Research Commission by June 1, 2022; 16
(b) In accordance with KRS 164.350 and 164.365, the Kentucky State University 17
board of regents has the authority to terminate employment of any university employee, 18
including tenured employees, upon 30 days' notice in accordance with the university's 19
personnel policies and subject to the recommendation of the president or acting president, 20
or in the case of the termination of the president or acting president, the recommendation 21
of the Council on Postsecondary Education; 22
(c) The Council on Postsecondary Education shall approve any Kentucky State 23
University expenditure greater than $5,000, and the university shall provide a monthly 24
report of university finances to the council in the format requested by the council. The 25
council shall provide a monthly update on the financial status of the university to the 26
Governor and the Legislative Research Commission. The financial oversight granted to 27 UNOFFICIAL COPY 22 RS HB 250/EN
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the council under this paragraph shall continue until the council reports to the Governor 1
and the Legislative Research Commission that the university's finances are stable; 2
(d) The Kentucky State University board of regents shall cease its search to fill 3
the university's presidential vacancy until April 15, 2023. Upon the effective date of this 4
Act, the board shall conduct a search for an interim president who has experience in 5
university governance with specific emphasis placed on turnaround experience to replace 6
the current interim president, who may serve until replaced; 7
(e) Within one year of the effective date of this Act, the Kentucky State 8
University board of regents, in consultation with the Council on Postsecondary 9
Education, shall conduct a thorough review of all university departments and academic 10
programs for long-term viability, financial stability, alignment with the university's 11
mission, and other criteria determined by the board and the council. In accordance with 12
accreditation requirements, the board shall eliminate or make changes to any department 13
or program found to be ineffective, inconsistent with the university's mission, or 14
otherwise not meeting the review criteria; 15
(f) Kentucky State University faculty and staff employed in departments and 16
programs closed under paragraph (e) of this subsection shall be terminated in accordance 17
with the university's personnel policies but shall not be prohibited from applying for other 18
positions available at the university; 19
(g) 1. Within three months of the effective date of this Act, the Kentucky State 20
University board of regents, in consultation with the Council on Postsecondary 21
Education, shall develop a process to review all faculty and staff performance, including a 22
post-tenure review for tenured faculty as described in subparagraph 2. of this paragraph. 23
The process shall ensure a consistently high level of employee performance and shall 24
include but not be limited to assessments by peers, students, and administrators. In 25
addition to evaluating an employee's growth, accomplishments, and skills, the process 26
shall be used to identify deficiencies and ineffectiveness and redirect employee efforts to 27 UNOFFICIAL COPY 22 RS HB 250/EN
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improve or increase productivity. The process shall be used as a basis for decisions on 1
continued employment, promotion, salary increases, tenure, and maintenance of tenure; 2
2. In addition to the requirements described in subparagraph 1. of this paragraph, 3
the review process for tenured faculty shall include an evaluation of teaching 4
effectiveness, research body of work, overall commitment to the mission of the 5
university, and other criteria determined by the board and the council; 6
(h) 1. Within one year of the effective date of this Act, the Kentucky State 7
University board of regents, in consultation with the Council on Postsecondary 8
Education, shall conduct a performance review of all faculty and staff as described in 9
paragraph (g) of this section, except as provided in subparagraph 2. of this paragraph, and 10
as a result, determine any board action warranted regarding termination of employees, 11
abolishment of positions, and adjustment of salaries. Any employee who fails to meet the 12
criteria established by the board, including tenured faculty, shall be terminated in 13
accordance with the university's personnel policies; 14
2. If there is not a sufficient body of evidence for a tenured faculty member to 15
undergo the review required under subparagraph 1. of this paragraph, as determined by 16
criteria established by the board in consultation with the council, the review shall be 17
delayed and the faculty member shall be advised of the deficiencies in the body of 18
evidence causing the delay. The review shall take place by April 1, 2024; and 19
(i) All tenured faculty shall undergo an additional post-tenure review as 20
described in paragraph (g) of this section by June 30, 2027. 21
(2) Any reasonable costs incurred by Kentucky State University and approved by 22
the Council on Postsecondary Education related to, or resulting from, implementing 23
personnel actions, including but not limited to terminations, separation incentives, 24
settlements, and judgments shall be reported by the council to the General Assembly for 25
consideration in determining future budget appropriations to the university. 26
Section 2. (1) The Council on Postsecondary Education shall create and 27 UNOFFICIAL COPY 22 RS HB 250/EN
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oversee a management improvement plan for Kentucky State University designed to 1
assist with organizational and financial stability that includes but is not limited to the 2
following areas: 3
(a) A comprehensive cataloging and review of university policies and procedures 4
to ensure efficiency and compliance with state and federal law; 5
(b) Guidelines for salary ranges and benefits for all faculty, staff, and 6
administrators; 7
(c) Mandatory board member training and development, including but not limited 8
to financial oversight and effective committee structure; 9
(d) Academic program offerings, course offerings, and faculty productivity 10
guidelines; 11
(e) Accounting and fiscal reporting systems, collections, budget, and internal 12
controls over expenditures and financial reporting; 13
(f) Student success and enrollment management strategies; 14
(g) Student academic progress and results; and 15
(h) The development of an online curriculum with the intent of offering 16
Bachelor's and Master's degrees online. 17
(2) The plan shall include: 18
(a) Specific, measurable goals, objectives, and benchmarks for each of the 19
improvement areas; 20
(b) A process for monitoring and evaluating Kentucky State University's progress 21
toward meeting the goals, objectives, and benchmarks; and 22
(c) The terms and conditions for the termination of the plan. 23
(3) The plan shall include, as determined by the council, on-site council or third-24
party staff in a management, advisory, or administrative capacity to provide assistance to 25
Kentucky State University in implementing the plan. 26
(4) The Kentucky State University board of regents shall fully cooperate and 27 UNOFFICIAL COPY 22 RS HB 250/EN
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timely consult with the council in developing and implementing the plan and shall 1
provide all information and documentation requested by the council in overseeing the 2
plan. 3
(5) The council shall submit the plan to the Legislative Research Commission by 4
November 1, 2022. Any revisions to the plan shall be submitted to the Commission after 5
adoption. 6
(6) The council shall contract with an independent third party to make 7
recommendations on the university's governance and operational structure and evaluate 8
the university's performance throughout the period of the council's oversight. 9
(7) By June 1 and November 1, 2022, and by June 1 and November 1 of each year 10
thereafter the plan is in effect, the council shall provide reports to the Interim Joint 11
Committee on Education detailing the status of the development, implementation, and 12
results of the plan. 13
(8) During Fiscal Years 2022-2023, 2023-2024, and 2024-2025, the Kentucky 14
State University president and a member of the Kentucky State University board of 15
regents shall provide a combined total of at least four updates each year on the progress of 16
the management improvement plan and the investigation of the actions that led to the 17
financial shortfall described in Section 3 of this Act to one or more of the following 18
committees: the Budget Review Subcommittee on Postsecondary Education, the Interim 19
Joint Budget Review Subcommittee on Education, the Interim Joint Committee on 20
Appropriations and Revenue, or the Interim Joint Committee on Education. 21
(9) By November 1, 2025, the council shall provide a three-year performance 22
analysis of Kentucky State University based on the management improvement plan to the 23
Interim Joint Committee on Education, the Interim Joint Committee on Appropriations 24
and Revenue, and the State Auditor of Public Accounts. The council shall provide 25
recommendations for a transition plan to a new governance and operational structure for 26
the institution for consideration by the General Assembly if the analysis finds a 27 UNOFFICIAL COPY 22 RS HB 250/EN
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continuing significant lack of efficiency and effectiveness in the governance and 1
administration of Kentucky State University. Upon the recommendation of the council, 2
the General Assembly may extend the council's involvement with and oversight of the 3
university beyond 2025. 4
Section 3. (1) There is hereby appropriated to the Council on 5
Postsecondary Education General Fund moneys in the amount of $23,000,000 in fiscal 6
year 2021-2022 to address financial instability at Kentucky State University, including a 7
cash shortfall due to prior year deficits and a projected financial structural imbalance in 8
fiscal year 2021-2022. Prior to receiving any disbursement of the funds from the council, 9
the university shall submit a request with supporting documentation required by the 10
council for the council's review and approval and make recommendations for further 11
investigations necessary, if any conduct has risen to the level of a crime. The total 12
disbursed to Kentucky State University shall be a non-interest bearing loan to be repaid 13
by university. Funds not disbursed to the university shall be deposited to the loan 14
repayment trust fund created in Section 4 of this Act. 15
(2) By November 1, 2025, the Council on Postsecondary Education shall make 16
recommendations to the Interim Joint Committee on Appropriations and Revenue for 17
consideration by the General Assembly during the 2026 Regular Session for the terms 18
and schedule for repayment of the loan beginning in fiscal year 2026-2027 based on 19
ongoing monitoring of Kentucky State University's financial status. 20
(3) The council shall provide an annual report to the Interim Joint Committee on 21
Appropriations and Revenue detailing the status of the Kentucky State University loan by 22
November 1, 2026, and by November 1 each year thereafter for as long as the loan is in 23
effect. 24
Section 4. (1) The Kentucky State University loan repayment trust fund is 25
hereby created as a trust fund in the State Treasury to be administered by the Council on 26
Postsecondary Education for the purpose of receiving loan payments as described in 27 UNOFFICIAL COPY 22 RS HB 250/EN
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Section 3 of this Act. 1
(2) The trust fund shall consist of amounts repaid by Kentucky State University 2
and any amounts not disbursed to the university as described in Section 3 of this Act. 3
(3) The balance in the trust fund shall be invested as provided in KRS 42.500(9). 4
Income earned from the investments shall be credited to the trust fund. 5
(4) Notwithstanding KRS 45.229, any fund balance at the close of the fiscal year 6
shall not lapse but shall be carried forward to the next fiscal year. All receipts in the fund 7
shall remain in the fund until appropriated by the General Assembly. 8
Section 5. There is hereby appropriated to the Council on Postsecondary 9
Education General Fund moneys in the amount of $5,000,000 in fiscal year 2022-2023 10
and $10,000,000 in fiscal year 2023-2024 for the purposes of distributing funds to 11
Kentucky State University, as determined by the council, as goals and benchmarks are 12
met by the university in accordance with the management improvement plan established 13
in Section 2 of this Act. Nothing in this section shall be considered as a performance fund 14
distribution under KRS 164.092, and the university shall be included in the 15
comprehensive funding model as described in KRS 164.092. 16
Section 6. There is hereby appropriated to the Council on Postsecondary 17
Education General Fund moneys in the amount of $1,500,000 in fiscal year 2022-2023 18
for the costs incurred by the council in carrying out its duties described in Sections 1 to 3 19
of this Act. 20
Section 7. Whereas the financial health and success of Kentucky State 21
University, a comprehensive, historically Black land-grant university, is vital to the well-22
being of Kentucky's postsecondary education system and the students it serves, an 23
emergency is declared to exist, and this Act takes effect upon its passage and approval by 24
the Governor or upon its otherwise becoming a law. 25