FINAL BILL REPORT

SHB 1197

                                  C 413 L 87

BYHouse Committee on Ways & Means (originally sponsored by Representatives Grimm, Holland, Ebersole, Betrozoff, Taylor, Cole, Hine, Bristow, Brough, Dellwo, Brekke, Rayburn, Wang, Jacobsen, P. King, Nelson, Todd, Unsoeld and Locke)

Revising provisions governing school capital projects.

House Committe on Ways & Means

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The Common School Construction Fund provides state matching grants for eligible school district construction projects, as administered by the State Board of Education.  Currently, the revenue source for this fund is income from school trust lands managed by the Department of Natural Resources--primarily timber sales and leases of property.  Since the 1983-85 biennium, timber revenues for this fund have been at approximately half the level reached in 1979-81, first as a result of defaults on timber contracts and then as a result of lower bids on new timber sales.  At the same time, anticipated enrollment growth and aging facilities have increased local school district demand for state construction monies.

For both years of the 1985-87 biennium, eligible school construction projects have exceeded the funding capacity of the Common School Construction Fund.  A backlog has developed which, as of April 1987, totalled $314 million in unfunded projects which already have both State Board of Education approval and local matching funds.  New projects will be added to this backlog as school districts continue to pass bond levies to raise the local share of construction costs.  By comparison, the school trust land revenue is projected to provide only $95 million for school construction during the 1987-89 biennium.

State matching funds for school construction projects are distributed according to rules adopted by the State Board of Education.  These rules determine funding eligibility for projects and are based upon a maximum cost per square foot recognized for matching purposes.  As of July 1986, this cost per square foot was $75.10 for new construction.

SUMMARY:

This measure is contingent on voter approval of the constitutional amendment in House Joint Resolution 4220.

An additional state property tax for school construction would be collected for 15 years beginning with calendar year 1988, at a rate of 35 cents per $1,000 of true and fair value.

Portions of the proceeds of this additional state property tax are to be used to increase the principal of the Permanent School Fund, an endowment fund generating interest earnings for school construction projects, as follows:  10 percent of the proceeds in calendar years 1988 through 1992, 40 percent of the proceeds from 1993 through 1997, and 90 percent of the proceeds from 1998 through 2002.

Remaining proceeds of the additional state property tax would be deposited in the Common School Construction Fund to provide matching funds for school construction projects.

Any rule changes by the State Board of Education which could potentially increase state costs for school construction projects would have to be expressly ratified by the legislature in a capital appropriations bill.  By statute, the maximum recognized project cost per square foot is set at the same level currently established in State Board of Education rules ($75.10 per square foot, adjusted for inflation). Districts will not qualify for new buildings simply as a result of redesignating their current facilities' grade level spans within the past five years, unless the State Board of Education finds that the district's needs can not be met through modernization or replacement of facilities.

VOTES ON FINAL PASSAGE:

      House 90   7

      Senate    33    16(Senate amended)

      House 91   6(House concurred)

EFFECTIVE:July 26, 1987