715-013-0075 Public University Capital Construction Projects (1) Purpose: The Oregon Higher Education Coordinating Commission (HECC) is charged with determining the strategic investments in the state’s public universities necessary to achieve state post-secondary goals. This includes appropriations for capital construction, improvements, and deferred maintenance. This rule is intended to specify the process by which capital project requests are evaluated and prioritized based on a set of principles. Projects will be prioritized based on specific evaluation criteria. The prioritization process is not a distribution model, and it is anticipated that all capital project proposals will follow the agency request budget process. The principles are that all state-paid debt will support education and general space, and prioritized projects will focus on renewal, will extend the capacity of existing facilities to support student success, will align with state workforce and economic needs, will include operational cost savings to the extent possible, will address safety and security issues, will include public-private and multi-party collaborations to the extent possible, and will leverage private and institutional resources. (2) For the purposes of this rule, the following definitions apply: (a) “Capital Project” is a defined proposal for capital construction or capital improvements. (b) “Capital Construction” is a planned expenditure of $1,000,000 or more for the construction of new buildings or additions to existing buildings. (c) “Capital Improvements” are planned expenditures to improve existing buildings which increase the value, extend the useful life of property, or make it adaptable to a different use. (d) “Emergency” is defined as a set of conditions creating an imminent threat to the safety of the campus community or capital construction needs arising from a catastrophic incident. (e) “HECC” is the Oregon Higher Education Coordinating Commission. (f) “HECC Agency Request Budget” is the biennial budget request submitted by the Oregon Higher Education Commission to the Governor and the Oregon Department of Administrative Services pursuant to ORS 291.208. (g) “Public university” or “University” is any institution as defined in ORS 352.002. (3) Capital Project Submissions. (a) Not later than April 10 of each even year, public universities shall submit capital plan information and related governing board approved project proposals to the HECC, in the manner specified by the HECC as published in the HECC Capital Guide, for consideration for inclusion in the HECC agency request budget. (b) Governing board approved capital project proposals submitted for consideration shall include all details, plans, forms, and other information as required by the HECC. Previously submitted, but unfunded, projects may be resubmitted in order to receive new consideration. (c) A revenue sufficiency analysis will be performed by HECC staff as necessary to comply with ORS 350.095. The public universities will provide all required information requested by HECC staff or the Oregon Department of Administrative Services staff for this purpose. HECC shall not consider any project for which a revenue sufficiency analysis is required but for which sufficient information to complete the analysis has not been provided by the public university. (d) HECC requests for capital construction or capital improvements to be funded with debt incurred pursuant to Article XI-G of the Oregon Constitution shall comply with ORS 286A.860. The matching of state bond funds under ORS 286A.830(11) may come from sources including institutional resources, gifts, grants, or other sources. The matching amount may not consist of proceeds of debt incurred by the State under any other article of the Oregon Constitution, nor from state General Funds unless specifically designated therefor by the Legislative Assembly. (e) New capital construction or capital improvements shall be subject to the following considerations: (A) The cost of necessary initial furniture, fixtures, or equipment necessary to place the asset in service for a new facility shall be an allowable expense. Furniture, fixtures, or equipment purchased for an improved facility shall be an allowable expense if it is capitalized in compliance with GASB accounting and financial reporting standards. (B) The acquisition of an existing facility shall be deemed a capital construction project within the meaning of this rule. (C) The costs of acquiring land shall be an allowable expense within a capital construction request in those cases where the capital construction project involves the acquisition of an existing facility. In those cases, the attendant land shall be limited to the parcel of land that currently serves the acquired facility. (D) Property subject to a leasehold interest by the university shall be eligible for remodeling funds provided the leasehold extends for as long as the state backed bonds are outstanding. (E) The public university must create a plan for funding future maintenance needs of the facility with institutional resources in alignment with ORS 352.113. (4) Capital Project Evaluation. (a) All submitted capital projects will be prioritized. The HECC shall rely upon the submitted capital plan information and capital project proposals, as well as any other data routinely collected by the HECC as needed, for the development of a prioritized list of capital projects to be included in the HECC agency request budget. (b) Capital projects will be prioritized based on the evaluation criteria displayed in Table 1, “Public University Capital Project Review Criteria,” which is an evaluation rubric based on a maximum of one hundred points allowed for each project. More detailed information on criteria components is available from the HECC. (c) The evaluation of capital projects is conducted by HECC staff. Capital Projects will be prioritized according to the score for each project. (d) Within the HECC agency request budget, the HECC shall list the projects in prioritized order. The prioritized list of projects is then presented to the HECC during a scheduled public meeting for its consideration as part of the HECC agency request budget process. (5) Emergency Requests. (a) The HECC shall consider for approval any public university capital project requests submitted as an emergency to the Interim Joint Committee on Ways and Means or the Emergency Board. Emergency requests shall comply with all instructions and deadlines required by the HECC. (b) HECC staff will evaluate emergency capital project requests for potential consideration by the HECC. Only those requests deemed to have met the criteria in subsection (c) of this section will be forwarded for HECC consideration. (c) When evaluating an emergency request, HECC staff will use the following criteria: (A) Unforeseen circumstances. Whether the capital project request represents a need that could not have been anticipated or is outside the control of a university. (B) Imminent life or safety need. Assessing the likelihood and severity for a negative outcome given an accepted risk management approach. (C) Irreparable harm to student success. Determining the potential for heightened risk to credential completion or student success. Assessing whether a group or cohort of students could experience irreparable harm to their ability to complete their education. (D) Systematic risk to higher education. Assessing if an imminent, previously unforeseen, systematic risk exists to Oregon institutions of higher education and their students necessitating a partnership with the State to effectively mitigate. (6) Out of Cycle Requests. In accordance with ORS 352.089, a public university that wishes to request the issuance of state bonds for capital construction or improvements shall make a request to the HECC. Any requests submitted outside of the biennial HECC agency request budget process shall be submitted at least 60 days prior to the start date of the legislative session and shall include all details, plans, forms, and other information as required by the HECC. The HECC shall provide a summary to the Governor and Legislature as appropriate by no later than 30 days prior to the start date of the legislative session. (7) Other Provisions. In accordance with ORS 350.379, public universities will report to the Joint Committee on Ways and Means prior to February 1 of each year on the amount of work performed by apprentices, women, and minority individuals under qualified contracts. Consistent with ORS 352.113, title to any real and/or personal property items acquired under this rule must be taken and held in the name of the State of Oregon, acting by and through the governing board of the public university. [ED. NOTE: To view attachments referenced in rule text, click here to view rule.] Statutory/Other Authority: ORS 350.075, ORS 350.095 & ORS 352.089 Statutes/Other Implemented: ORS 350.075, ORS 350.095 & ORS 352.089 History: HECC 4-2024, adopt filed 12/13/2024, effective 12/13/2024