AN ACT Relating to common school capital projects and authorizing the issuance of general obligation bonds; amending RCW 28A.47.802 and 28A.47.806; adding new sections to chapter 28A.47 RCW; creating new sections; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. It is the intent of the legislature to address school construction funding and allocation issues. To prevent foreclosure of options concerning future expenditure of state construction funds, the legislature intends to maintain flexibility in defining the context of state funding responsibilities.

NEW SECTION. Sec. 2. (1) A joint select committee on school construction is created to study financing of common school capital projects. The committee shall be composed of the following members:

(a) Three members from each caucus of the house of representatives appointed by the speaker of the house of representatives. At least one member shall be from the education committee, at least one member shall be from the natural resources committee and at least one member shall be from the ways and means committee.

(b) Three members from each caucus of the senate appointed by the president of the senate. At least one member shall be from the education committee, at least one member shall be from the natural resources committee and at least one member shall be from the ways and means committee.

(2) The joint select committee shall study and make recommendations to the legislature on the following topics:

(a) The long-term funding capacity of the common school construction fund;

(b) Alternative revenue or financing options for support of common school construction projects;

(c) State priorities for the equitable allocation of available construction funds, including methods for determining eligibility for state assistance and calculating state support; and

(d) Methods for encouraging efficient application of resources made available by the legislature for school construction.

(3) The joint select committee shall submit a report of its findings and final recommendations to the legislature no later than December, 15 1986.

(4) This section shall expire April 1, 1987.

Sec. 3. Section 3, chapter 244, Laws of 1969 ex. sess. as amended by section 2, chapter 56, Laws of 1974 ex. sess. and RCW 28A.47.802 are each amended to read as follows:

In allotting the state funds provided by RCW 28A.47.800 through 28A.47.811, and in accordance with student enrollment as computed for the purposes of RCW 28A.41.140, the state board of education shall:

(1) Prescribe rules and regulations not inconsistent with RCW 28A.47.800 through 28A.47.811 governing the administration, control, terms, conditions, and disbursement of allotments to school districts to assist them in providing school plant facilities;

(2) Approve, whenever the board deems such action advisable, allotments to districts that apply for state assistance;

(3) Authorize the payment of approved allotments by warrant of the state treasurer; and

(4) In the event that the amount of state assistance applied for pursuant to the provisions hereof exceeds the funds available for such assistance during any biennium, make allotments on the basis of the urgency of need for school facilities in the districts that apply for assistance or prorate allotments among such districts in conformity with procedures and regulations applicable thereto which shall be established by the board. State board rules affecting prioritization of projects shall minimize delays in allotting funds provided pursuant to sections 4 through 8 of this 1986 act. Commitments concerning project eligibility or the amount or timing of state assistance shall not be binding until the district is authorized by the state board to open bids for the project.

NEW SECTION. Sec. 4. For the purpose of furnishing funds for state assistance to school districts in providing common school plant facilities and modernization of existing common school plant facilities and to provide for the state administrative costs of such projects, including costs of bond issuance and retirement, salaries, and related costs of officials and employees of the state, costs of credit enhancement agreements, and other expenses incidental to the administration of capital projects, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of thirty million dollars, or so much thereof as may be required to finance these projects and all costs incidental thereto. Bonds authorized in this section may be sold at such price as the state finance committee shall determine. No bonds authorized in this section may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds. The state finance committee may obtain insurance or letters of credit and may authorize the execution and delivery of agreements, promissory notes, and other obligations for the purpose of insuring the payment or enhancing the marketability of bonds authorized in this section.

NEW SECTION. Sec. 5. The proceeds from the sale of the bonds authorized in section 4 of this act shall be deposited in the common school construction fund and shall be used exclusively for the purposes specified in this section and section 4 of this act and for the payment of expenses incurred in the issuance and sale of the bonds. These proceeds shall be administered by the state board of education in any fiscal year to provide state assistance for primary and secondary school construction and modernization projects: (1) Which would not receive state assistance under state board allocation rules in effect January 1, 1986, from funds other than the proceeds of these bonds, and (2) for which state assistance is limited to the state matching percentage calculated pursuant to RCW 28A.47.803(2).

NEW SECTION. Sec. 6. The state general obligation bond retirement fund shall be used for the payment of the principal of and interest on the bonds authorized in section 4 of this act. The state finance committee may provide that a special account be created in such fund to facilitate payment of principal and interest.

The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing twelve months to meet the bond retirement and interest requirements. Not less than thirty days before the date on which any interest or principal and interest payment is due, the state treasurer shall withdraw from any general state revenues received in the state treasury and deposit in the general obligation bond retirement fund, or a special account in that fund, an amount equal to the amount certified by the state finance committee to be due on the payment date.

Bonds issued under section 4 of this act shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.

The owner and holder of each of the bonds or the trustee for the owner and holder of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of funds as directed in this section.

NEW SECTION. Sec. 7. The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 4 of this act, and section 6 of this act shall not be deemed to provide an exclusive method for the payment.

NEW SECTION. Sec. 8. The bonds authorized in section 4 of this act shall be a legal investment for all state funds or funds under state control and for all funds of any other public body.

NEW SECTION. Sec. 9. Sections 4 through 8 of this act are each added to chapter 28A.47 RCW.

Sec. 10. Section 7, chapter 244, Laws of 1969 ex. sess. and RCW 28A.47.806 are each amended to read as follows:

All applications by school districts for state assistance in providing school plant facilities shall be made to the superintendent of public instruction in conformity with rules and regulations which shall be prescribed by the state board of education. Studies and surveys shall be conducted by the state board for the purpose of securing information relating to (a) the kind and extent of the school plant facilities required and the urgency of need for such facilities in districts that seek state assistance, (b) the ability of such districts to provide capital funds by local effort, (c) the need for improvement of school administrative units and school attendance areas among or within such districts, and (d) any other pertinent matters. Districts which had, prior to September 30, 1985, received preliminary state board approval for state assistance for a project involving new construction in lieu of modernization shall not suffer any change in the priority status of the project nor the amount of assistance for which the district is eligible, in the case that the district modernizes rather than replaces the facility and the following conditions are met:

(a) The school district has calculated the life-cycle cost of modernization; and

(b) The life-cycle cost of modernization is less than or equal to the cost of meeting the same need through new construction.

NEW SECTION. Sec. 11. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 12. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.