SENATE BILL REPORT

SB 5155

BYSenators Bluechel and Gaspard

Compensating school districts for financial losses due to the transfer or annexation of territory.

Senate Committee on Education

Senate Hearing Date(s):February 4, 1987; March 2, 1987

Majority Report:  That Substitute Senate Bill No. 5155 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Gaspard, Chairman; Bauer, Vice Chairman; Rinehart, Vice Chairman; Bailey, Craswell, Warnke.

Senate Staff:Larry Davis (786-7422)

                  March 3, 1987

AS REPORTED BY COMMITTEE ON EDUCATION, MARCH 2, 1987

BACKGROUND:

Current State Board of Education rules do not establish a uniform date for approval or disapproval of transfers or annexations of school district territory.  State Board rules also provide no uniform effective date for transfers or annexations of school district territory.

State law does not permit a school district to receive state basic education and categorical funds the district would have been eligible to receive had it not lost territory due to an approved transfer or annexation of property.

SUMMARY:

The State Board of Education is required to approve the transfer or annexation of school district territory not later than March 1 of any given year.  Implementation of the transfer or annexation begins at the start of the following school year.

Districts may implement an earlier date by a written agreement between the respective boards of directors.

The state provides compensation for three years for the net loss of basic education, categorical and other funds to any district which loses territory due to the transfer or annexation of such territory.

Property owners within the territory approved for a transfer or annexation remain obligated to pay their proportionate share of levy or bond obligations approved by the district losing the territory prior to the transfer or annexation order.

Property owners within the territory approved for a transfer or annexation are exempt from paying their proportionate share of any levy or bond obligations approved by the district gaining the territory prior to the transfer or annexation order.

Fiscal Note:      requested

EFFECT OF PROPOSED SUBSTITUTE:

The scope of the bill is limited only to transfers of territory between school districts.

The State Board of Education is to consider excess tax levies when adjusting the assets and liabilities of school districts affected by a proposed transfer of territory between school districts.

A school district affected by a transfer of territory shall retain its preexisting boundaries for the purpose of the collection of excess tax levies authorized before the effective date of the transfer.  For all excess tax levies authorized subsequent to the effective date of the transfer the boundaries of the affected districts shall be modified to recognize the transfer of the territory.

Deleted are requirements that:  property owners in the territory transferred or annexed remain obligated to pay prior approved levies or bonds in the district losing the territory; property owners in the territory transferred or annexed are exempt from paying on prior levies or bonds in the district gaining the territory;  the state compensate districts for three years for state funds "lost" due to the transfer or annexation.

Senate Committee - Testified: Senator Alan Bluechel, sponsor; Dr. Karen Forys, Superintendent, Riverview School District; Dr. Arnold Ness, Superintendent, Snoqualmie Valley School District; Harry Peterson, member, State Board of Education; Mike Roberts, Office of the Superintendent of Public Instruction; Ben Edlund, Washington State School Directors' Association