BILL REQ. #:  S-5001.3 

READ FIRST TIME 03/11/14.   

     AN ACT Relating to financing facilities to support education reform with general obligation bonds; adding a new section to chapter 28A.188 RCW; adding new sections to chapter 28A.150 RCW; adding new sections to 2013 2nd sp.s. c 19 (uncodified); adding a new chapter to Title 43 RCW; creating a new section; making appropriations; and declaring an emergency.

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

NEW SECTION.  Sec. 101   (1) The legislature finds that local school districts design, build, own, and manage public school facilities. School districts are assisted in providing public school facilities primarily through the school construction assistance grant program specified in chapter 28A.525 RCW. This grant program provides financial assistance for new schools to accommodate enrollment growth and for the modernization and replacement of existing schools while respecting local decisions and control by locally elected school boards.
     (2) The legislature also finds that some school districts may need additional assistance to provide school facilities to meet education reforms as provided in chapter 548, Laws of 2009 (Engrossed Substitute House Bill No. 2261), chapter 236, Laws of 2010 (Substitute House Bill No. 2776), and chapter 25, Laws of 2013 2nd sp.s. (Engrossed Second Substitute House Bill No. 1872), related to all-day kindergarten, K-3 class size reduction, and science, technology, engineering, and math literacy.
     (3) The legislature intends to provide financial assistance to school districts that need additional help to provide school facilities that may facilitate the implementation of these educational reforms. The most cost-effective way to provide that assistance without impairing operating budget funds currently devoted to educational purposes is through high rated general obligation bonds. It is the intent of the legislature to authorize eight hundred twenty-five million dollars in general obligation bonds and appropriate those bond proceeds in this and the following three fiscal biennia to accomplish the purpose of this act.

NEW SECTION.  Sec. 201   For the purpose of providing state funds for public school facilities, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of eight hundred twenty-five million dollars, or as much thereof as may be required, to finance projects and grant programs specified in this act 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.

NEW SECTION.  Sec. 202   The proceeds from the sale of the bonds authorized in section 201 of this act shall be deposited in the state building construction account created by RCW 43.83.020. If the state finance committee deems it necessary to issue taxable bonds in order to comply with federal internal revenue service rules and regulations pertaining to the use of nontaxable bond proceeds, the proceeds of such taxable bonds shall be transferred to the state taxable building construction account in lieu of any deposits otherwise provided by this section. The state treasurer shall submit written notice to the director of financial management if it is determined that any such transfer to the state taxable building construction account is necessary. Moneys in the account may be spent only after appropriation. These proceeds shall be used exclusively for the purposes specified in section 101 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 office of financial management subject to legislative appropriation.

NEW SECTION.  Sec. 203   (1) The debt-limit general fund bond retirement account shall be used for the payment of the principal of and interest on the bonds authorized in section 201 of this act.
     (2) 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. On each 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 debt-limit general fund bond retirement account an amount equal to the amount certified by the state finance committee to be due on the payment date.

NEW SECTION.  Sec. 204   (1) Bonds issued under section 201 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.
     (2) 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. 205   The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 201 of this act, and section 203 of this act shall not be deemed to provide an exclusive method for the payment.

NEW SECTION.  Sec. 206   The bonds authorized in section 201 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. 301   A new section is added to chapter 28A.188 RCW to read as follows:
     (1) The legislature recognizes that to achieve improvements in science, technology, engineering, and mathematics literacy specialized school plant facilities are required. Adequate STEM facilities support interactive, project-based STEM curricula and support STEM teachers who are attempting to deliver interactive, project-based STEM curricula. The legislature also recognizes that to achieve expected improvements in STEM literacy the development and modernization of specialized STEM facilities must occur at a faster pace than the typical thirty to fifty-year cycle of modernizing or replacing school plant facilities. The legislature intends to speed up the development and modernization of specialized STEM facilities through the grant program described in this section.
     (2) The specialized STEM facility grant program must be administered by the superintendent of public instruction in consultation with the STEM education innovation alliance specified in RCW 28A.188.030 and the statewide STEM organization specified in RCW 28A.188.050. The superintendent of public instruction must develop grant application materials in consultation with the statewide STEM organization, must review applications for accuracy and financial reasonableness, and must administer awarded grants. With funds specifically appropriated for this purpose, the superintendent of public instruction must contract with the statewide STEM organization specified in RCW 28A.188.050 to evaluate applications against the criteria specified in subsection (4) of this section and recommend a single rank-ordered list of grant applications. The superintendent of public instruction may modify the rank-ordered list received by the statewide STEM organization for inclusion in the office's capital budget request, but must also submit to the governor and fiscal committees of the legislature the original ranking by the statewide STEM organization with explanations for any changes made to the ranking. The governor may use the original list prepared by the statewide STEM organization or may consider any changes recommended by the office of the superintendent of public instruction in preparing the governor's capital budget request.
     (3) One hundred percent of project costs are eligible for grants under this program for:
     (a) Facilities owned by public school districts or public charter schools used for grades nine through twelve;
     (b) Facilities built or modernized more than ten years prior to the grant application; and
     (c) Project costs for design, construction, project management, capitalized and noncapitalized equipment and fixtures, and necessary utility, educational technology infrastructure, and information technology systems upgrades to support the specialized STEM facilities.
     (4) The criteria listed in this subsection must be used to rank grant requests. In applying these criteria, the statewide STEM organization should seek to recommend funding for projects that modernize the most inadequate facilities, to be used by the most qualified STEM teachers, expected to result in the greatest gains in STEM literacy for the greatest number of students for the aggregate amount of proposed grant funding, while improving specialized STEM facilities in rural, suburban, and urban districts in all parts of the state. The criteria are:
     (a) The extent that existing STEM facilities are inadequate including the lack of adequate STEM facilities to meet graduation requirements in RCW 28A.150.220;
     (b) A demonstration that existing STEM faculty are in place and are qualified to deliver an interactive, project-based STEM curriculum in the proposed specialized STEM facilities, or a plan and budget are in place to recruit or train such STEM faculty;
     (c) The expected gains in STEM literacy that are expected from the proposed specialized STEM facilities in comparison to the proposed project costs;
     (d) The STEM facilities are needed in schools with the highest free and reduced-price school lunch enrollment percentages;
     (e) A broad distribution of grants across the state benefiting rural, suburban, and urban districts; and
     (f) Economic conditions within the district that limit the ability of the district to finance the necessary classroom space from local sources.
     (5) For the first round of grant applications to be considered for grants from the appropriation provided in section 302(2) of this act or for inclusion in the governor's capital budget request for the 2015-2017 biennium, an expedited grant application and review process must be conducted by the superintendent of public instruction and the statewide STEM organization. The first rank-ordered list must consider, in addition to the criteria in subsection (4) of this section, projects that demonstrate innovative approaches to the design and construction of specialized STEM facilities, including facilities for smaller schools that are flexible and convertible to support education in a variety of STEM disciplines. The first rank-ordered list of proposed grants must be submitted to the office of financial management and the appropriate committees of the legislature by October 30, 2014. Following that first submission, the superintendent of public instruction must prepare a biennial grant application cycle for subsequent biennia.
     (6) Modernized spaces funded with this grant program in the prior ten years are not eligible to receive state funding for modernization through this grant program or the school construction assistance program for the space that has been modernized with this grant program. The office of the superintendent of public instruction shall write rules to ensure new space added with funding provided by this grant is included in the eligible inventory for the school construction assistance program.
     (7) The office of the superintendent of public instruction, in consultation with the STEM education innovation alliance, must prepare a plan for evaluating the student performance outcomes resulting from the STEM facility grant program. The evaluation plan and estimated cost must be submitted to the appropriate committees of the legislature by January 1, 2015. The evaluation plan must provide an initial evaluation report on student outcomes by January 1, 2019. The report must also consider options for expanding the grant program to improve specialized STEM facilities for middle and elementary schools.

NEW SECTION.  Sec. 302   A new section is added to 2013 2nd sp.s. c 19 (uncodified) to read as follows:
FOR THE SUPERINTENDENT OF PUBLIC INSTRUCTION
     2013-2015 Specialized STEM Facility Grant Program (92000021)

     The appropriation in this section is subject to the following conditions and limitations:
     (1) $9,000,000 of the appropriation is for grants for the following list of STEM facility improvement projects:

     Franklin Pierce - Washington High School . . . . . . . . . . . . $7,500,000
     University Place - Curtis High School . . . . . . . . . . . . $850,000
     Zillah School District - Expand Engineering Facility . . . . . . . . . . . . $450,000
     Enumclaw - Stem Computer Lab . . . . . . . . . . . . $200,000

     (2) $40,750,000 of the appropriation is for the top ranked projects under the process specified in section 301 of this act.
     (3) $250,000 of the appropriation is provided solely for the contract with the statewide STEM organization specified in section 301 of this act.

Appropriation:
     State Building Construction Account--State . . . . . . . . . . . . $50,000,000

     Prior Biennia (Expenditures) . . . . . . . . . . . . $0
     Future Biennia (Projected Costs) . . . . . . . . . . . . $225,000,000
          TOTAL . . . . . . . . . . . . $275,000,000

NEW SECTION.  Sec. 401   A new section is added to chapter 28A.150 RCW to read as follows:
     (1) The legislature recognizes that some school districts may need additional financial assistance to provide classroom capacity to support the phase-in of state-funded all-day kindergarten specified in this chapter even though the school construction assistance program under chapter 28A.525 RCW has included all-day kindergarten in the calculation of necessary classroom space since 2001. The legislature intends to assist school districts in the phase-in of all-day kindergarten with the grant program described in this section.
     (2) The all-day kindergarten facility grant program must be administered by the superintendent of public instruction in consultation with an advisory committee. The advisory committee must include three school district facility managers, one each from an urban, suburban, and rural school district, selected by the superintendent of public instruction, and four community members selected by the governor representing parents and organizations concerned with early education and student academic performance. The superintendent of public instruction must develop grant application materials in consultation with the advisory committee, must review applications for accuracy and financial reasonableness, and must administer awarded grants. The advisory committee must review applications against the criteria specified in subsection (4) of this section and recommend a single rank-ordered list. The superintendent of public instruction may modify the rank-ordered list received by the advisory committee for inclusion in the agency's capital budget request, but must also submit to the governor and fiscal committees of the legislature the original ranking by the advisory committee with explanations for any changes made to the ranking. The governor may use the original list prepared by the advisory committee or may consider any changes recommended by the office of the superintendent of public instruction in preparing the governor's capital budget request.
     (3) One hundred percent of project costs necessary to provide additional classroom space at existing elementary schools are eligible for kindergarten classroom grants under this program for:
     (a) Facilities owned by public school districts or public charter schools;
     (b) Facilities built or modernized prior to 2003; and
     (c) Project costs for design, construction, purchase, and installation of modular buildings, project management, capitalized equipment, and fixtures. Costs for purchase or lease of portables or other facilities not installed on permanent foundations are not eligible.
     (4) The criteria listed in this subsection must be used to rank grant requests. In applying these criteria, the advisory committee should seek to recommend funding for projects that provide necessary classroom space in districts furthest behind in implementing state-funded all-day kindergarten, or for districts that have implemented state-funded all-day kindergarten in temporary spaces, with the highest enrollment percentages of students eligible for free and reduced-price school lunches, in districts least able to provide the necessary classroom space from local sources. The criteria are:
     (a) The extent that implementing state-funded all-day kindergarten may be assisted by additional classroom capacity as verified by site visits by the office of the superintendent of public instruction. School districts that have implemented state-funded all-day kindergarten in temporary spaces must be ranked as high as schools not having implemented state-funded all-day kindergarten due to a lack of space. For the purposes of this subsection, temporary spaces mean spaces that are not designed as a classroom nor typically used as a classroom, such as the library, auditorium, gymnasium, or in neighboring community facilities not owned by the district;
     (b) The kindergarten classroom space is needed in schools with the highest free and reduced-price school lunch enrollment percentages; and
     (c) Economic conditions within the district that limit the ability of the district to finance the necessary classroom space from local sources.
     (5) For the first round of grant applications to be considered for grants from the appropriation provided in section 402(1) of this act or for inclusion in the governor's capital budget request for the 2015-2017 biennium, an expedited grant application and review process must be conducted by the superintendent of public instruction and the advisory committee. The first rank-ordered list of proposed grants must be submitted to the office of financial management and the appropriate committees of the legislature by October 30, 2014. Following that first submission, the superintendent of public instruction must prepare a biennial grant application cycle for subsequent biennia.
     (6) The office of the superintendent of public instruction shall write rules to ensure new space added with funding provided by this grant is included in the eligible inventory for the school construction assistance program. Grant funds provided under this section must not be counted as local match for the school construction assistance program. The all-day kindergarten program is not intended to replace the school construction assistance program for providing state assistance for the construction of new schools.

NEW SECTION.  Sec. 402   A new section is added to 2013 2nd sp.s. c 19 (uncodified) to read as follows:
FOR THE SUPERINTENDENT OF PUBLIC INSTRUCTION
     2013-2015 State-Funded All-Day Kindergarten Grant Program (92000027)

     The appropriation in this section is subject to the following conditions and limitations:
     (1) $49,750,000 of the appropriation is provided solely for the top ranked projects under the process specified in section 401 of this act.
     (2) $250,000 of the appropriation is for administrative costs for implementing the grant program specified in section 401 of this act.

Appropriation:
     State Building Construction Account--State . . . . . . . . . . . . $50,000,000

     Prior Biennia (Expenditures) . . . . . . . . . . . . $0
     Future Biennia (Projected Costs) . . . . . . . . . . . . $225,000,000
          TOTAL . . . . . . . . . . . . $275,000,000

NEW SECTION.  Sec. 501   A new section is added to chapter 28A.150 RCW to read as follows:
     (1) The legislature recognizes that some school districts may need additional financial assistance to provide classroom capacity and facilities to support the phase-in of state-funded smaller class sizes in kindergarten through third grade. The legislature intends to determine the extent that class size reductions might be facilitated by providing financial assistance to school districts for increasing classroom capacity and facilities and whether the benefits of class size reductions are influenced by the number of students in a physical classroom, or by the student to teacher ratio. The legislature intends to assist school districts implementing state-funded class size reductions in kindergarten through third grade through the grant program required in this section.
     (2)(a) Prior to implementing the intended grant program described in this section the office of the superintendent of public instruction must determine what features of smaller class sizes, specified in (b) of this subsection, most reliably produce improvements in student outcomes, what is the current status of those class size features in the state's public schools, and how best to achieve class size reductions for kindergarten through third grade based on the class size features that produce the most reliable gains in student outcomes.
     (b) The office of the superintendent for public instruction must review research compiled and evaluated by the Washington institute for public policy on the benefits of reductions in kindergarten through third grade class size to determine which of the following class size features are most reliably associated with gains in student outcomes:
     (i) An actual smaller number of students in a physical classroom; or
     (ii) A smaller student to teacher ratio.
     (c) The office of the superintendent of public instruction must complete the currently funded inventory of public school classroom capacity in order to determine the current status of the actual number of students in physical classrooms in elementary schools. This determination must be specified by grade level, or by kindergarten, primary grades, and elementary grades for classrooms with multigrade enrollments. The office of the superintendent of public instruction must also determine the current status of student-teacher ratios in elementary schools. This determination must be specified by grade level, or by kindergarten, primary grades, and elementary grades for classrooms with multigrade enrollments.
     (d) The office of the superintendent of public instruction must consider the information and determinations resulting from (b) and (c) of this subsection in recommending to the appropriate committees of the legislature provisions and criteria for a grant program to assist school districts to implement state-funded class size reductions in kindergarten through third grade. At a minimum, the provisions must require the use of an advisory committee in evaluating grant requests, the provision of grants that fund one hundred percent of project costs necessary to provide additional classroom space or other modifications at existing elementary schools to achieve state-funded class size reductions in kindergarten through third grade for facilities owned by public school districts or public charter schools, including costs for design, construction, purchase, and installation of modular buildings, project management, capitalized equipment, and fixtures. At a minimum, the recommended criteria for prioritizing projects must include the school's free and reduced-price school lunch enrollment percentage. Costs for purchase or lease of portables or other facilities not installed on permanent foundations must not be eligible for grants.

NEW SECTION.  Sec. 502   A new section is added to 2013 2nd sp.s. c 19 (uncodified) to read as follows:
FOR THE SUPERINTENDENT OF PUBLIC INSTRUCTION
     2013-2015 Kindergarten/Third Grade Class Size Reduction Grant Program (92000028)

     The appropriation in this section is subject to the following conditions and limitations: $500,000 of the appropriation is provided solely to accomplish the tasks specified in section 501 of this act and prepare a report on the determinations and recommendations to be submitted to the appropriate committees of the legislature by December 1, 2014.

Appropriation:
     State Building Construction Account--State . . . . . . . . . . . . $500,000

     Prior Biennia (Expenditures) . . . . . . . . . . . . $0
     Future Biennia (Projected Costs) . . . . . . . . . . . . $274,500,000
          TOTAL . . . . . . . . . . . . $275,000,000

NEW SECTION.  Sec. 601   Sections 201 through 206 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 602   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.