AN ACT Relating to common school capital projects; authorizing the issuance of general obligation bonds; amending RCW 28A.47.060, 28A.47.801, 28A.47.803, and 28A.47.805; adding new sections to chapter 28A.47 RCW; adding a new section to chapter 84.52 RCW; adding a new section to chapter 84.55 RCW; creating new sections; and providing an effective date.

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

NEW SECTION. Sec. 1. (1) For the purpose of furnishing funds for state assistance to school districts in providing common school plant facilities and modernization of existing common school plant facilities and to provide for the state administrative costs of such projects, including costs of bond issuance and retirement, salaries, and related costs of officials and employees of the state, costs of credit enhancement agreements, and other expenses incidental to the administration of capital projects, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of one hundred fifty-five million dollars, or so much thereof as may be required to finance these projects and all costs incidental thereto.

(2) 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. The state finance committee may obtain insurance or letters of credit and may authorize the execution and delivery of agreements, promissory notes, and other obligations for the purpose of insuring the payment or enhancing the marketability of bonds authorized in this section.

NEW SECTION. Sec. 2. The proceeds from the sale of the bonds authorized in section 1 of this act shall be deposited in the common school construction fund and shall be used exclusively for the purposes specified in section 1 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 state board of education.

NEW SECTION. Sec. 3. The state general obligation bond retirement fund shall be used for the payment of the principal of and interest on the bonds authorized in section 1 of this act. The state finance committee may provide that a special account be created in such fund to facilitate payment of principal and interest.

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. Not less than thirty days before the 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 general obligation bond retirement fund, or a special account in that fund, an amount equal to the amount certified by the state finance committee to be due on the payment date. On each date on which any interest or principal and interest is due, the state treasurer shall cause an identical amount to be transferred to the general fund of the state treasury from that portion of the common school construction fund derived from the revenues from the additional state property tax under section 12 of this act. Any deficiency in such transfer shall be made up as soon as moneys are available for transfer and shall constitute a continuing obligation of that portion of the common school construction fund derived from the revenues from the additional state property tax under section 12 of this act until all deficiencies are fully paid.

Bonds issued under section 1 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.

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. 4. The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 1 of this act, and section 3 of this act shall not be deemed to provide an exclusive method for the payment.

NEW SECTION. Sec. 5. The bonds authorized in section 1 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. 6. Sections 1 through 5 of this act are each added to chapter 28A.47 RCW.

Sec. 7. Section 28A.47.060, chapter 223, Laws of 1969 ex. sess. and RCW 28A.47.060 are each amended to read as follows:

The state board of education shall have the power and it shall be its duty (1) to prescribe rules and regulations governing the administration, control, terms, conditions, and disbursements of allotments to school districts to assist them in providing school plant facilities but such rules shall be consistent with and may be subject to ratification under section 11 of this 1987 act; (2) to approve allotments to districts that apply for state assistance in conformance with this chapter whenever the board deems such action advisable and in so doing to give due consideration to the findings, reports, and recommendations of the superintendent of public instruction pertaining thereto; (3) to approve allotments to districts for construction or modernization of vocational technical institute facilities, but, for projects which had not received preliminary state board approval prior to January 1, 1987, only when the legislature has provided funds adequate for this purpose in an appropriation designated specifically for vocational technical institute facilities and the board deems such action advisable; (4) to authorize the payment of approved allotments by warrant of the state treasurer; and ((~~(4)~~)) (5) in the event that the amount of state assistance applied for exceeds the funds available for such assistance during any biennium, to make allotments on the basis of the urgency of need for school facilities in the districts that apply for assistance and/or to prorate allotments among such districts in conformity with procedures and regulations applicable thereto which shall be established by the state board.

Sec. 8. Section 2, chapter 244, Laws of 1969 ex. sess. as last amended by section 18, chapter 154, Laws of 1980 and RCW 28A.47.801 are each amended to read as follows:

(1) Funds appropriated to the state board of education from the common school construction fund shall be allotted by the state board of education in accordance with student enrollment as computed for the purposes of RCW 28A.41.140 and the provisions of RCW 28A.47.800 through 28A.47.811((~~: PROVIDED, That~~)). In calculating allotments other than for modernization or replacement of facilities, the state board shall not recognize facility needs created solely by the redesignation of facilities' grade level spans during the five years before the proposed allotment, unless the state board finds that these needs cannot feasibly be met through modernization or replacement.

(2) No allotment shall be made to a school district ((~~for the purpose aforesaid~~)) until such district has provided matching funds equal to or greater than the difference between the total approved project cost and the amount of state assistance to the district for financing the project computed pursuant to RCW 28A.47.803, with the following exceptions:

(a) The state board may waive the matching requirement for districts which have provided funds for school building construction purposes through the authorization of bonds or through the authorization of excess tax levies or both in an amount equivalent to two and one-half percent of the value of its taxable property, as defined in RCW 39.36.015((~~, or such lesser amount as may be required by the state board of education: PROVIDED FURTHER, That~~)).

(b) No such matching funds shall be required as a condition to the allotment of funds for the purpose of making major or minor structural changes to existing school facilities in order to bring such facilities into compliance with the handicapped access requirements of section 504 of the federal rehabilitation act of 1973 (29 U.S.C. Sec. 706) and rules implementing the act.

(c) No such matching funds shall be required for allotment of funds for construction or modernization of vocational technical institute facilities.

(3) The state board of education shall prescribe and make effective such rules and regulations as are necessary to equate insofar as possible the efforts made by school districts to provide capital funds by the means aforesaid.

Sec. 9. Section 4, chapter 244, Laws of 1969 ex. sess. as last amended by section 1, chapter 98, Laws of 1975 1st ex. sess. and RCW 28A.47.803 are each amended to read as follows:

Allocations to school districts of state funds provided by RCW 28A.47.800 through 28A.47.811 shall be made by the state board of education and the amount of state assistance to a school district in financing a school plant project shall be determined in the following manner:

(1) ((The boards of directors of the districts shall determine the total cost of the proposed project, which cost may include the cost of acquiring and preparing the site, the cost of constructing the building or of acquiring a building and preparing the same for school use, the cost of necessary equipment, taxes chargeable to the project, necessary architects' fees, and a reasonable amount for contingencies and for other necessary incidental expenses: PROVIDED, That the total cost of the project shall be subject to review and approval by the state board of education.)) The state board of education shall annually adopt a construction cost index which is based upon recent regional trends in these costs. Construction expenditures included in the approved cost of a project shall be limited to seventy-five dollars and ten cents per square foot, adjusted by the percentage change in this construction cost index since July 1, 1986. In addition, as determined by the state board, the approved cost of the project may also include: (a) Costs of necessary equipment; (b) architectural and engineering services; and (c) mandatory tests, inspections, and other reports or studies. Nothing in this section shall be construed as limiting additional expenditures from other sources by school districts for capital projects.

(2) The state matching percentage for a school district shall be computed by the following formula:

The ratio of the school district's adjusted valuation per full time equivalent pupil divided by the ratio of the total state adjusted valuation per full time pupil shall be subtracted from three, and then the result of the foregoing shall be divided by three plus (the ratio of the school district's adjusted valuation per full time equivalent pupil divided by the ratio of the total state adjusted valuation per full time pupil).

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@p0!tb !ixPROVIDED, That in the event the percentage of state assistance to any school district based on the above formula is less than twenty percent and such school district is otherwise eligible for state assistance under RCW 28A.47.800 through 28A.47.811, the state board of education may establish for such district a percentage of state assistance not in excess of twenty percent of the approved cost of the project, if the state board finds that such additional assistance is necessary to provide minimum facilities for housing the pupils of the district.

(3) In addition to the computed percent of state assistance developed in (2) above, a school district shall be entitled to additional percentage points determined by the average percentage of growth for the past three years. One percent shall be added to the computed percent of state assistance for each percent of growth, with a maximum of twenty percent.

(4) The approved cost of the project determined in the manner herein prescribed times the percentage of state assistance derived as provided for herein shall be the amount of state assistance to the district for the financing of the project: PROVIDED, That need therefor has been established to the satisfaction of the state board of education: PROVIDED, FURTHER, That additional state assistance may be allowed if it is found by the state board of education that such assistance is necessary in order to meet (a) a school housing emergency resulting from the destruction of a school building by fire, the condemnation of a school building by properly constituted authorities, a sudden excessive and clearly foreseeable future increase in school population, or other conditions similarly emergent in nature; or (b) a special school housing burden imposed by virtue of the admission of nonresident students into educational programs established, maintained and operated in conformity with the requirements of law; or (c) ((a deficiency in the capital funds of the district resulting from financing, subsequent to April 1, 1969, and without benefit of the state assistance provided by prior state assistance programs, the construction of a needed school building project or projects approved in conformity with the requirements of such programs, after having first applied for and been denied state assistance because of the inadequacy of state funds available for the purpose, or (d) a condition created by the fact that an excessive number of students live in state owned housing, or (e))) a need for the construction of a school building to provide for improved ((~~school district organization or~~)) racial balance if the project had received preliminary state board approval before January 1, 1992, or ((~~(f)~~)) (d) facility needs created by school district consolidation or by the establishment of an interdistrict cooperative program when the state board has found that the interdistrict program will provide opportunities for services that would otherwise not be feasible or would be substantially more expensive when provided by each district individually; or (e) conditions similar to those defined under (a), (b), ((~~(c),~~)) or (d) ((~~and (e) hereinabove,~~)) of this subsection creating a like emergency.

Sec. 10. Section 6, chapter 244, Laws of 1969 ex. sess. as amended by section 4, chapter 56, Laws of 1974 ex. sess. and RCW 28A.47.805 are each amended to read as follows:

If a school district which has qualified for an allotment of state funds under the provisions of RCW 28A.47.800 through 28A.47.811 for school building construction is found by the state board of education to ((~~have a school housing emergency requiring an allotment of state funds in excess of the amount allocable~~)) qualify for additional state assistance under RCW 28A.47.803(4), an additional allotment may be made to such district: PROVIDED, That the total amount allotted shall not exceed ninety percent of the ((~~total~~)) approved cost of the ((~~approved~~)) project ((~~which may include the cost of the site and equipment~~)). At any time thereafter when the state board of education finds that the financial position of such school district has improved through an increase in its taxable valuation or through retirement of bonded indebtedness or through a reduction in school housing requirements, or for any combination of these reasons, the amount of such additional allotment, or any part of such amount as the state board of education determines, shall be deducted, under terms and conditions prescribed by the board, from any state school building construction funds which might otherwise be provided to such district.

NEW SECTION. Sec. 11. A new section is added to chapter 28A.47 RCW to read as follows:

No rule adopted after January 1, 1987, by the state board of education which impacts on the state funding of common school construction or modernization projects shall be effective until such rule has been expressly ratified by the legislature in a subsequent capital appropriations bill. This section shall apply only to new or revised rules which increase or may potentially increase the number of projects eligible for state assistance or the amount of state assistance for which a district is eligible.

NEW SECTION. Sec. 12. A new section is added to chapter 84.52 RCW to read as follows:

Pursuant to Article IX, section 3 of the state Constitution, there is hereby levied an additional state property tax at a rate of forty cents per thousand dollars of assessed valuation adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue for collection in each year beginning in calendar year 1988 and ending in calendar year 2002. Forty-four percent of the proceeds of this levy in each year shall be deposited as principal in the permanent common school fund. Remaining proceeds of this levy shall be deposited in the common school construction fund for financing the bonds authorized in section 1 of this act and for financing the construction of facilities for the common schools.

NEW SECTION. Sec. 13. A new section is added to chapter 84.55 RCW to read as follows:

This chapter does not apply to the levy under section 12 of this act.

NEW SECTION. Sec. 14. Sections 12 and 13 of this act apply to taxes levied for collection in 1988, and thereafter.

NEW SECTION. Sec. 15. The department of revenue shall take all steps necessary so that the taxes may be levied in 1987 for collection in 1988.

NEW SECTION. Sec. 16. Sections 1 through 14 of this act shall take effect December 10, 1987, if the proposed amendments to Article IX, section 3 and Article VII, section 2 of the state Constitution providing funding for capital purposes for schools (House Bill No. --) are validly submitted to and are approved and ratified by the voters at a general election held in November 1987. If the proposed amendments are not so approved and ratified, sections 1 through 15 of this act shall be null and void in their entirety.

NEW SECTION. Sec. 17. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.