BILL REQ. #:  H-1292.1 

Read first time 01/28/09.   Referred to Committee on Education Appropriations.

     AN ACT Relating to establishing a small school district contingency fund; and adding new sections to chapter 28A.300 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 28A.300 RCW to read as follows:
     (1) The small school district contingency fund program is created to provide assistance in the form of a loan to small school districts facing a short-term and temporary shortfall in budgeted operating funds due to an unforeseen circumstance that is outside the control of the school district board of directors. An unforeseen circumstance does not include any labor dispute between a school district board of directors and any employee of the school district.
     (2) School districts with an annual average full-time equivalent student enrollment of one hundred or fewer students may submit an application to the contingency fund committee for a loan of moneys from the small school district contingency fund account. Applications must describe the unforeseen circumstance, the proposed use of moneys from the loan, and how the loan will be repaid.
     (3) A contingency fund committee composed of the superintendents of each of the educational service districts or their designees shall oversee the administration of the program. The committee shall develop criteria and an expedited process for reviewing and approving or denying applications and establish maximum loan amounts. The procedures developed by the committee shall be adopted as administrative rules by the office of the superintendent of public instruction.
     (4) The contingency fund committee shall select districts to receive a loan from the account under section 2 of this act based on review of the applications. The amount of the loan shall be determined by the committee, and the committee may make a loan from the small school district contingency fund account to a school district only to the extent that moneys are available in the account.
     (5) Each school district receiving a loan from the small school district contingency fund account shall negotiate a repayment plan with the contingency fund committee. Repayments shall begin within one year and all moneys shall be repaid in full no later than three years after the loan is approved by the committee. No standard or fixed repayment schedule is required, and the contingency fund committee and the superintendent of public instruction may not charge interest or fees.

NEW SECTION.  Sec. 2   A new section is added to chapter 28A.300 RCW to read as follows:
     The small school district contingency fund account is created in the custody of the state treasurer for the purposes of making short-term loans to small school districts under section 1 of this act. Appropriations made by the legislature for the purposes of section 1 of this act shall be deposited into the account, along with any repayments to the fund made by school districts as provided under section 1 of this act. Only the superintendent of public instruction or the superintendent's designee may authorize expenditures from the account and only at the direction of the contingency fund committee. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures. Moneys deposited into the fund shall not lapse at the end of the fiscal period for which they were appropriated. Funds appropriated for and deposited into the account shall not be considered as basic education funding.