SENATE BILL REPORT

SB 5621

BYSenators Gaspard, Saling, Bauer, Bender, Smitherman and Johnson; by request of Superintendent of Public Instruction and State Board of Education

Authorizing the issuance of general obligation bonds for common school capital projects.

Senate Committee on Education

Senate Hearing Date(s):February 26, 1987

Majority Report:  Do pass and refer to Committee on Ways & Means.

      Signed by Senators Gaspard, Chairman; Bauer, Vice Chairman; Rinehart, Vice Chairman; Bailey, Patterson, Saling, Smitherman, Warnke.

Senate Staff:Marcia Costello (786-7419)

                  February 26, 1987

AS REPORTED BY COMMITTEE ON EDUCATION, FEBRUARY 26, 1987

BACKGROUND:

The State Board of Education is responsible for disbursing state matching funds for common school new construction and modernization projects.  The source of the state matching funds is the sale of timber on state lands.  Revenues from the sale of timber have decreased, resulting in a lack of adequate funds to provide the state match for school construction projects. Consequently, a backlog of school construction projects has developed.  Districts on the waiting list for state matching funds have already obtained local bond authorization and State Board approval for their projects.

As of February 1, 1987, the state matching share for projects which already have local matching funds and State Board approval was approximately $325 million.  This obligation is likely to increase as additional local bond elections are held.

The total amount of revenue projected from state trust lands for the next biennium is approximately $86 million.  Projections indicate that in the near future approximately $50 million will be available on a yearly basis from timber sales, while the projected need for state matching dollars will be $75 million per year.

SUMMARY:

The State Finance Committee is authorized to issue general obligation bonds of the state of Washington in the sum of $478 million, or so much as is needed, to provide for the construction or modernization of common school plant facilities.

No bonds will be sold without prior legislative appropriation of the proceeds.  Proceeds of the sale shall be deposited in the common school construction fund and shall be used exclusively for the construction and modernization of common school plant facilities and their related costs.

The bonds are a general obligation of the state of Washington and shall contain an unconditional promise to pay the principal and interest thereon when due.  The state general obligation bond retirement fund is used for the payment of the principal and interest on these bonds.

The Legislature provides additional moneys for the payment of the principal and interest on these bonds.  The bonds shall be a legal investment for all state funds or funds under state control and for all funds of any other public body.

Fiscal Note:      requested

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: Harry Petersen, State Board of Education; Mike Roberts, Office of the Superintendent of Public Instruction; Roy Duncan, Washington Association of School Administrators, Shoreline School District; Diane Campbell, Chairperson, Office of Superintendent of Public Instruction School Facilities Cost Advisory Board; Brian Cullerton, Bethel School District; Jim Hanson, Evergreen School District