HOUSE BILL REPORT

HB 1101

BYRepresentatives H. Sommers, Ferguson, Ebersole, Chandler, Sayan, Belcher, R. Fisher, R. King, Brough, Prince, Anderson, O'Brien, Hankins, Rector, Holland, Baugher, Schoon and McLean; by request of Washington State Library

Authorizing the state library commission to move the western library network to private nonprofit status.

House Committe on State Government

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass. (8)

      Signed by Representatives R. Fisher, Chair; Anderson, Vice Chair; McLean, Ranking Republican Member; Hankins, R. King, Morris, Rector and Sayan.

Minority Report:  Do not pass. (1)

      Signed by Representative Silver.

House Staff:Barbara McLain (786-7135)

AS REPORTED BY COMMITTEE ON STATE GOVERNMENT JANUARY 31, 1989

BACKGROUND:

In 1976, the legislature authorized implementation of the Western Library Network (WLN).  WLN has two major components:  a resource sharing network for libraries, and a multi-state computer service.  WLN has also developed and markets a number of "off-line" services, including licensing of a computer software package libraries can use to establish their own networks.

The original WLN consisted of 10 participating libraries in Washington State.  Currently over 300 libraries in six Western states and British Columbia use WLN online services, and software licensing has been marketed internationally.  WLN is financed through a revolving fund supported by fees from member libraries. It employs 75 people and has an annual budget of about $7 million.

As a division of the Washington State Library, the WLN falls under the jurisdiction of the Washington State Library Commission.  The Commission consists of the Superintendent of Public Instruction as ex-officio chair and four members appointed by the Governor for four-year terms.  An advisory council called the Network Services Council (NSC) assists the Commission in overseeing the WLN.  NSC members represent participating libraries from Washington, Alaska, Oregon, Montana, Idaho, and Arizona.

For several years, discussion has continued over whether WLN should remain as a division of a state agency or whether it should take the status of a nonprofit corporation.  Sunset review reports by the Legislative Budget Committee in 1984 and 1987 have recommended that the WLN change its governance structure.  A study completed by the Network Services Council in May, 1988 recommends formation of a private non-profit corporation to assume the functions of the WLN.

SUMMARY:

SUBSTITUTE BILL:  The State Library Commission is authorized to cooperate with other agencies in establishing a private non-profit corporation to provide services currently offered by the Western Library Network.  The Commission may terminate services of the Western Library Network before June 30, 1997 if a successor organization agrees to assume full responsibility for providing those services.

To establish the non-profit corporation, the Commission may transfer equipment, contracts for services, and other assets for reasonable compensation determined by the Commission.  However, for up to five years the Commission has the right to repossess transferred property should the successor organization become bankrupt, insolvent, or fail to provide services satisfactory to a majority of users.  Repossessed property remains the property of the state, to be administered by the Library Commission.

The Commission is authorized to provide personnel and other support services to the successor organization under contract for up to two years and is to be reimbursed for all costs of contracted services.  Library personnel are not precluded by conflict of interest provisions from employment with the new organization.

When the Commission terminates Western Library Network services, any funds remaining in the Western Library Network Computer System Revolving Fund are to be used by the Commission to meet outstanding obligations of the network, with the remainder going to the general fund.  Untransferred property belongs to the state and untransferred contracts become the obligation of the State Library.

The Commission may designate one or more members of the board of directors for the successor organization, but the state is not to be held liable for those members or for the actions of the organization.  A status report is to be submitted annually by January 1 to appropriate Senate and House committees, with a final report in January, 1998.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Various technical and clarifying changes are made to carry out the intent of the drafters.  Western Library Network employees seeking employment with the successor organization are exempt only from conflict of interest provisions of the law, not code of ethics or public misconduct provisions.

Fiscal Note:      Available.

Effective Date:The bill contains an emergency clause and sections 1 through 6 and 9 through 13 take effect on June 1, 1989.

House Committee ‑ Testified For:    Nancy Zussy, State Librarian; Mark Allen, Washington Library Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The Network needs to be able to compete more effectively in the marketplace of library service vendors and to do that it should be an entity independent of state government.  The goals of such a transfer are to preserve the Network's unique technology, effect a smooth transition from public to non-profit, and protect Washington's interests.

House Committee - Testimony Against:      None Presented.