Brief Description: Changing provisions for financing contracts for state university research facilities or equipment.

Sponsors: Representatives Murray, Alexander and Dunshee; by request of University of Washington.

Hearing Date: 1/29/03

Staff: Charlie Gavigan (786-7340).

Background:

Generally, new capital facilities for state agencies and higher education institutions must be specifically approved by the Legislature. The Legislature has authorized the regents and trustees of the four-year public institutions of higher education to issue revenue bonds and other debt to finance certain types of capital facilities without specific legislative approval. This includes financing student housing, dining halls, parking, and facilities for student activities. Typically the bond-holders are secured only by the university's revenues from its facilities; the debt is not a general obligation of the state.

In 2002, the Legislature authorized the University of Washington (UW) and Washington State University (WSU) to acquire and finance research facilities and related equipment supported by the fees and revenues each university receives from its facilities or research activities. This financing includes issuing local bonds or entering into lease purchase agreements. The regents must consider the maintenance and operating costs of the research facility and related equipment. State-appropriated funds cannot be used for maintenance and operating expenses or to support grant or contract-supported research in these facilities. The universities must report annually to the Legislature on the financing of research facilities under the authority.

The UW and WSU had prior statutory authorization to enter into financing contracts supported by non-state funds without State Finance Committee approval. A statutory reference in the 2002 legislation to make the institutions' new financing authority for research facilities consistent with this existing statute excluded the new authority rather than including it.

Summary of Bill:

The University of Washington and Washington State University are authorized to enter into financing contracts supported by non-state research-related funds to finance research facilities and related equipment without prior notice and approval of the State Finance Committee. Clarification is also made that the two universities may acquire real property for these research facilities using financing contracts supported by non-state research-related funds without prior legislative approval.

Appropriation: None.

Fiscal Note: Not Requested.

Effective Date: The bill takes effect ninety days after adjournment of session in which bill is passed.