SENATE BILL REPORT
SB 5326
As of January 27, 2021
Title: An act relating to health and pension benefits for school bus drivers employed by private nongovernmental entities.
Brief Description: Concerning health and pension benefits for school bus drivers employed by private nongovernmental entities.
Sponsors: Senators Robinson, Cleveland, Conway, Das, Hasegawa, Hunt, Liias, Nguyen, Nobles, Salda?a, Wellman and Wilson, C..
Brief History:
Committee Activity: Ways & Means: 1/28/21.
Brief Summary of Bill
  • Provides that school districts may only enter into pupil transportation service contracts with nongovernmental entities that provide health and retirement benefit contributions to their employees equivalent to those received by school employees.
SENATE COMMITTEE ON WAYS & MEANS
Staff: Amanda Cecil (786-7460)
Background:

Transportation Funding.  The state's program of basic education includes transportation for some students to and from school.  Funding allocations for pupil transportation are based on a combination of prior year allocations and district expenditures, and a regression analysis of student transport numbers and district characteristics used to estimate expected transport costs.  For purposes of establishing a school district's independent variable for the regression analysis, allowable employee compensation costs are limited to base salary and benefit rates as provided in the budget.


Private Contracts.  School districts may contract with private nongovernmental entities for pupil transportation services, provided the district engages in an open competitive process for the services at least once every five years.

 

School Employee Benefits.  Health care and related benefits for eligible school district employees are provided through the School Employees' Benefit Board (SEBB) program.  The state allocates funding to each school district for employee health care, and for the cost to districts of subsidized retiree health care for state-funded K-12 staff units.  Medical premiums are split 85 percent employer paid and 15 percent employee paid.  Other benefits such as dental, vision, and basic life are fully paid by the employer.  For the 2021 fiscal year the SEBB employer funding rate is $1,000 per employee per month, which includes the retiree remittance of $76.13.  Funding and retiree remittance rates for the 2021-23 fiscal biennium will be established by the Legislature.  

 

Classified school employees are provided pension benefits through the School Employees' Retirement System, administered by the Department of Retirement Systems.  Pension benefits are funded as a percentage rate applied to eligible salaries.  For the 2021-23 fiscal biennium, the Pension Funding Council adopted a normal employer contribution rate of 8.05 percent and an employee contribution rate of 7.76 percent.
Summary of Bill:

A school district may only enter into a pupil transportation services contract with a nongovernmental entity that provides the following to its employees:

  • an employer health benefits contribution equal to the rate established for the state health benefits program for school employees, less the retiree remittance; and
  • an amount equivalent to the plan 2 and 3 normal cost employer contribution rate of the School Employees' Retirement System multiplied by the estimated salaries of the employees of the contractor.

 

"Employee" is defined as an employee who works sufficient compensated hours for the nongovernmental entity performing services on the contract with the school district to meet the eligibility requirements for the state health benefits program for school employees if the employee was employed directly by the school district.

 

These provisions apply only to contracts entered into, renewed, or extended after the effective date of this act. 
Appropriation: None.
Fiscal Note: Requested on January 26, 2021.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.