S4597

An Act concerning mergers of institutions of higher education and certain proprietary institutions and supplementing Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. As used in this section, “participating institution” means an institution of higher education or degree-granting proprietary institution that is party to a merger or consolidation.

b. Notwithstanding any other provision of law to the contrary, and subject to the approval process established pursuant to subsections c. and d. of this section, the governing board of a public institution of higher education shall have the power to merge or consolidate with one or more institutions of higher education or degree-granting proprietary institutions and shall assume any vested rights, grants, charter rights, other than those retained pursuant to N.J.S.18A:68-6, privileges, exemptions, immunities, powers, prerogatives, franchises or advantages, debts, or liabilities of the institutions with which it merges or consolidates.

c. Prior to commencing the institutional merger or consolidation:

(1) the governing board of each participating institution shall adopt a resolution to enter into the institutional merger or consolidation; and

(2) within 30 days of the adoption of the last resolution pursuant to paragraph (1) of this subsection, the participating institutions shall submit a joint application to the Secretary of Higher Education for preliminary approval.

The secretary shall notify each participating institution of the preliminary approval or disapproval within 30 days of receipt of the application.

d. Upon receipt of the secretary’s preliminary approval to participate in the institutional merger or consolidation, the governing boards of the participating institutions shall jointly develop and submit a comprehensive plan for the institutional merger or consolidation to the secretary for final review and approval. The plan shall be developed and reviewed according to standards set forth by the secretary.

e. Prior to determining a final executive approval or disapproval of the proposed merger or consolidation, the secretary shall review the comprehensive plan and assess:

(1) the need for the institutional merger or consolidation;

(2) whether the institutional merger or consolidation is in the best interest of the State and the affected parties, including prospective and current students, institutional faculty and staff, and the institutions’ host communities; and

(3) any other relevant factors and criteria determined by the secretary.

f. The secretary may utilize the assistance of an external consultant team, solicit comments from interested parties, hold public hearings at the campuses of the participating institutions, and consult with the Higher Education Student Assistance Authority and the New Jersey Presidents’ Council, as appropriate, in reviewing the comprehensive plan. Costs incurred by the secretary in reviewing the comprehensive plan shall be borne by the participating institutions.

g. The secretary shall issue a final approval or disapproval of the merger or consolidation and issue a written certification to the governing boards of all participating institutions.

2. The Secretary of Higher Education shall submit to the Legislature a copy of the written certification of the approval of a merger or consolidation issued pursuant to section 1 of this act. If the Legislature does not disapprove the merger or consolidation by the adoption of a concurrent resolution within 90 days, the merger or consolidation shall be deemed to be authorized. The secretary and the participating institutions shall provide to the Legislature such information concerning the merger or consolidation as the Legislature may require for its consideration.

3. a. Upon completion of an institutional merger or consolidation, the secretary shall determine whether the institutional merger or consolidation has been successfully executed and, upon finding that the institutional merger or consolidation has been successfully executed, the secretary shall authorize, as needed, any necessary changes to the licensure of the single remaining public institution.

b. Upon completion of an institutional merger or consolidation, and in accordance with the powers and duties of its governing board, the single remaining public institution of higher education shall, except as otherwise provided by law, be considered a single entity for purposes of State appropriations, grants, capital and construction funding, and other funding.

4. The provisions of this act shall not apply to Rutgers, the State University; however, any other institution that seeks to participate in a merger or consolidation with Rutgers, the State University shall be subject to the provisions of this act.

5. The provisions of this act shall not apply to any merger or consolidation of participating institutions for which a letter of intent, or similar agreement indicating a commitment to a merger or consolidation, has been executed prior to the effective date of this act.

6. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Secretary of Higher Education is authorized to adopt immediately upon filing with the Office of Administrative Law rules and regulations necessary to implement this act. The rules and regulations shall include, but not be limited to, standards for the development of a merger or consolidation plan for participating institutions and for the review and approval of the plan by the secretary. The rules and regulations adopted pursuant to this section shall be effective for a period not to exceed 180 days following the date of filing and shall thereafter be amended, adopted, or readopted by the secretary in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

7. This act shall take effect immediately.

STATEMENT

This bill establishes a process for the merger or consolidation of a public institution of higher education with other institutions of higher education or certain proprietary institutions and requires executive and legislative approval of the merger or consolidation.

The bill provides that, subject to an approval process established within the bill’s provisions, the governing board of a public institution of higher education has the power to merge or consolidate with one or more institutions of higher education or degree-granting proprietary institutions. Under such a merger or consolidation, the public institution of higher education is to assume any vested rights, grants, certain charter rights, privileges, exemptions, immunities, powers, prerogatives, franchises or advantages, debts, or liabilities of the institutions with which it merges or consolidates.

The bill requires that, prior to commencing the institutional merger or consolidation:

(1) the governing board of each participating institution is to adopt a resolution to enter into the proposed institutional merger or consolidation; and

(2) the participating institutions are to submit a joint application to the Secretary of Higher Education to commence the proposed institutional merger or consolidation.

The bill directs the secretary to notify each participating institution of the preliminary approval or disapproval within 30 days of receipt of the application.

The bill further requires that, upon receipt of the secretary’s preliminary approval to participate in the institutional merger or consolidation, the governing boards of the participating institutions are to jointly develop and submit a comprehensive plan for the institutional merger or consolidation to the secretary for final review and approval. The plan is to be developed and reviewed according to standards set forth by the secretary in regulation. The secretary may utilize the assistance of an external consultant team, solicit comments from interested parties, hold public hearings at the campuses of the institutions, and consult with the Higher Education Student Assistance Authority and the New Jersey Presidents’ Council, as appropriate, to review the comprehensive plan. Costs incurred by the secretary in reviewing the comprehensive plan for a proposed merger or consolidation are to be borne by the participating institutions.

Under the bill, the secretary is to issue a final approval or disapproval of the merger or consolidation and issue a written certification to the governing boards of all participating institutions.

The bill further directs the secretary to submit to the Legislature a copy of the written certification of the approval of a merger or consolidation. If the Legislature does not disapprove the merger or consolidation by the adoption of a concurrent resolution within 90 days, the merger or consolidation is deemed to be authorized.

The bill directs the secretary to authorize, as needed, any necessary changes to the licensure of the remaining public institution.

The bill provides that the single remaining public institution of higher education is to, except as otherwise provided by law, be considered a single entity for purposes of State appropriations, grants, capital and construction funding, and other funding

The provisions of the bill do not apply to Rutgers, the State University; however, any other institution that seeks to participate in a merger or consolidation with Rutgers, the State University is subject to the bill’s provisions.

The provisions of the bill do not apply to any merger or consolidation of participating institutions for which a letter of intent, or similar agreement indicating a commitment to a merger or consolidation, has been executed prior to the bill’s effective date.

Finally, the bill provides for the authorization of emergency regulations, which are to be readopted with or without amendment, pursuant to the requirements of the “Administrative Procedure Act” within 180 days.