Today contract education is generally thought of as a program or course for which an employer is paying the full cost of instruction for customized training. Contract education can help faculty remain current, encourage industry to make equipment available to the college that might otherwise be too expensive, and provide employment opportunities for students enrolled in contract courses. However, the recent growth of contract education in the California Community Colleges (CCC) has raised concerns about the academic quality of such programs, and about the match between contract education, the college mission, and the legislative intent regarding contract programs. In response to these concerns, a task force was appointed by the state legislature to report on contract education practices in the CCC. The study identified three fundamental types of contractual programs: (1) contracts with private industry, accounting for 43% of all contracts during a 3-year period, and 8.2% of the $41 million of total revenues generated during this time; (2) contracts with public entities, accounting for 24% of all contracts and 6.6% of total revenues; and (3) contracts sponsored by public training funds, representing 33% of all contracts, yet generating 85.1% of total contract education revenues. Suggestions for the development of contract education programs include greater faculty involvement in curriculum development and approval; faculty involvement in instructor hiring; establishment of a faculty contract education liaison; and assurance of adequate faculty qualifications. A copy of CCC Academic Senate resolutions about contract education and Contra Costa Community College District's agreement with the faculty union regarding contract course payment are included. (PAA)