BILL REQ. #:  H-1968.1 

Read first time 02/18/09.   Referred to Committee on Capital Budget.

     AN ACT Relating to leases of facilities by school districts; amending RCW 28A.335.170; reenacting and amending RCW 28A.320.330; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature intends to provide additional options and flexibility to school districts in the operation of their programs through the securing of necessary facilities by the use of leases and through additional funding options for school facility leases.

Sec. 2   RCW 28A.320.330 and 2007 c 503 s 2 and 2007 c 129 s 2 are each reenacted and amended to read as follows:
     School districts shall establish the following funds in addition to those provided elsewhere by law:
     (1) A general fund for maintenance and operation of the school district to account for all financial operations of the school district except those required to be accounted for in another fund.
     (2) A capital projects fund shall be established for major capital purposes. All statutory references to a "building fund" shall mean the capital projects fund so established. Money to be deposited into the capital projects fund shall include, but not be limited to, bond proceeds, proceeds from excess levies authorized by RCW 84.52.053, state apportionment proceeds as authorized by RCW 28A.150.270, earnings from capital projects fund investments as authorized by RCW 28A.320.310 and 28A.320.320, and state forest revenues transferred pursuant to subsection (3) of this section.
     Money derived from the sale of bonds, including interest earnings thereof, may only be used for those purposes described in RCW 28A.530.010, except that accrued interest paid for bonds shall be deposited in the debt service fund.
     Money to be deposited into the capital projects fund shall include but not be limited to rental and lease proceeds as authorized by RCW 28A.335.060, and proceeds from the sale of real property as authorized by RCW 28A.335.130.
     Money legally deposited into the capital projects fund from other sources may be used for the purposes described in RCW 28A.530.010, and for the purposes of:
     (a) Major renovation, including the replacement of facilities and systems where periodical repairs are no longer economical. Major renovation and replacement shall include, but shall not be limited to, roofing, heating and ventilating systems, floor covering, and electrical systems.
     (b) Renovation and rehabilitation of playfields, athletic fields, and other district real property.
     (c) The conduct of preliminary energy audits and energy audits of school district buildings. For the purpose of this section:
     (i) "Preliminary energy audits" means a determination of the energy consumption characteristics of a building, including the size, type, rate of energy consumption, and major energy using systems of the building.
     (ii) "Energy audit" means a survey of a building or complex which identifies the type, size, energy use level, and major energy using systems; which determines appropriate energy conservation maintenance or operating procedures and assesses any need for the acquisition and installation of energy conservation measures, including solar energy and renewable resource measures.
     (iii) "Energy capital improvement" means the installation, or modification of the installation, of energy conservation measures in a building which measures are primarily intended to reduce energy consumption or allow the use of an alternative energy source.
     (d) Those energy capital improvements which are identified as being cost-effective in the audits authorized by this section.
     (e) Purchase or installation of additional major items of equipment and furniture: PROVIDED, That vehicles shall not be purchased with capital projects fund money.
     (f)(i) Costs associated with implementing technology systems, facilities, and projects, including acquiring hardware, licensing software, and online applications and training related to the installation of the foregoing. However, the software or applications must be an integral part of the district's technology systems, facilities, or projects.
     (ii) Costs associated with the application and modernization of technology systems for operations and instruction including, but not limited to, the ongoing fees for online applications, subscriptions, or software licenses, including upgrades and incidental services, and ongoing training related to the installation and integration of these products and services. However, to the extent the funds are used for the purpose under this subsection (2)(f)(ii), the school district shall transfer to the district's general fund the portion of the capital projects fund used for this purpose. The office of the superintendent of public instruction shall develop accounting guidelines for these transfers in accordance with internal revenue service regulations.
     (g) Payment of facility leases, as provided in RCW 28A.335.170(1).
     (3) A debt service fund to provide for tax proceeds, other revenues, and disbursements as authorized in chapter 39.44 RCW. State forest land revenues that are deposited in a school district's debt service fund pursuant to RCW 79.64.110 and to the extent not necessary for payment of debt service on school district bonds may be transferred by the school district into the district's capital projects fund.
     (4) An associated student body fund as authorized by RCW 28A.325.030.
     (5) Advance refunding bond funds and refunded bond funds to provide for the proceeds and disbursements as authorized in chapter 39.53 RCW.

Sec. 3   RCW 28A.335.170 and 1999 c 386 s 1 are each amended to read as follows:
     The board of directors of any school district may enter into contracts for their respective districts with public and private persons, organizations, and entities for the following purposes:
     (1) To rent or lease building space for a period of up to twenty years with the option to extend or renew the lease or rental agreement for an additional ten years, if necessary and portable buildings for periods not exceeding ten years in duration;
     (2) To rent security systems, computers, and other equipment or to have maintained and repaired security systems, computers, and other equipment for periods not exceeding five years in duration; and
     (3) To provide pupil transportation services for periods not exceeding five years in duration.
     No school district may enter into a contract for pupil transportation unless it has notified the superintendent of public instruction that, in the best judgment of the district, the cost of contracting will not exceed the projected cost of operating its own pupil transportation.
     The budget of each school district shall identify that portion of each contractual liability incurred pursuant to this section extending beyond the fiscal year by amount, duration, and nature of the contracted service and/or item in accordance with rules and regulations of the superintendent of public instruction adopted pursuant to RCW 28A.505.140 and 28A.310.330.
     The provisions of this section shall not have any effect on the length of contracts for school district employees specified by RCW 28A.400.300 and 28A.405.210.