HOUSE BILL REPORT

HB 2914

BYRepresentatives Betrozoff and Brumsickle

Revising provisions for school levies for construction, modernization, or remodeling of school facilities.

House Committe on Education

Majority Report:  Do pass.  (17)

      Signed by Representatives Peery, Chair; G. Fisher, Vice Chair; Betrozoff, Ranking Republican Member; Brumsickle, Cole, Dorn, Fuhrman, Horn, Jones, P. King, Pruitt, Rasmussen, Rayburn, Schoon, Valle, Walker and K. Wilson.

Minority Report:  Do not pass.  (1)

      Signed by Representative Holland.

House Staff:Susan Patrick (786-7111)

Rereferred House Committee on Capital Facilities & Financing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (13)

      Signed by Representatives H. Sommers, Chair; Rasmussen, Vice Chair; Schoon, Ranking Republican Member; Betrozoff, Bowman, Braddock, Fraser, Heavey, Jacobsen, Peery, Rector, Wang and Winsley.

AS REPORTED BY COMMITTEE ON CAPITAL FACILITIES & FINANCING

FEBRUARY 3, 1990

BACKGROUND:

In 1986, the Legislature approved House Joint Resolution 55.  The resolution asked the voters of the state to allow districts to pass levies, of up to six years duration, to support the construction, modernization or remodelling of school facilities. The voters approved the Joint Resolution in the November 4, 1986 state General Election.

Following passage of the resolution, the Lake Washington School District submitted a school capital projects excess levy to its voters for the modernization and remodelling of school facilities.  The money was to be used for the purchase and installation of an integrated computer system within the school district.  This was not tied to a specific construction project.  The levy was passed by the voters on February 2, 1988.

Legislators felt that the legislative intent of the Legislature in authorizing the capital project excess levy was for projects that involved substantial construction as part of the modernization and remodelling, not just the purchase of equipment.  The legislators requested an Attorney General's Opinion.  The opinion issued June 15, 1988, supported the view point of the legislators.  Lake Washington School District was not bound by the opinion of the Attorney General and decided to resolve the issue by seeking a declaratory judgment from the Superior Court in King County in July, 1989.

The conclusion of the Superior Court was that there was no clear legislative intent to limit the use of money derived from the capital levy. Consequently, the Lake Washington School District could use the capital projects excess levy for the purchase of the integrated computer system that was not part of a construction project.

SUMMARY:

No more than 15 percent of the proceeds from a six-year levy for construction, modernization, or remodeling of school facilities may be used to purchase capital equipment that constitutes a fixture or interconnected system that is not part of a construction project.  Under no circumstances may the proceeds of a six-year levy be used to purchase replacement equipment.

No more than 15 percent of the proceeds from a bond issue for capital purposes may be used to purchase capital equipment that constitutes a fixture or interconnected system that is not part of a construction project.  When capital bonds are issued the term of the bonds may be no greater than the useful life of the equipment or facilities being purchased by the bond proceeds.

CHANGES PROPOSED BY COMMITTEE ON CAPITAL FACILITIES & FINANCING (SUBSTITUTE BILL):  The 15 percent limitation on the use of construction levy money for equipment is applied to all two-year through six-year construction levies.  The original limitation only applied to the six-year levy.

Fiscal Note:      Requested January 23, 1990.

House Committee ‑ Testified For:    (Education)  Kris Van Gorkom, Washington Association of School Administrators.

(Capital Facilities & Financing)  Kris Van Gorkom, Washington Association of School Administrators.

House Committee - Testified Against:      (Education)  No one.

(Capital Facilities & Financing)  No one.

House Committee - Testimony For:    (Education)  It is important for schools to know exactly how the six-year levy can be used.  The real issue in this bill is one of equity.  If the money provided for non-employee related costs were adequate, all districts would be able to address their equipment needs.  If the 15 percent of the proceeds limitation is left on the levy and bonds, schools would not be able to make modern technology available to their students.  A computer lab would use 20 to 25 percent of the costs of the project for equipment.

(Capital Facilities & Financing)  Same as previous committee.

House Committee - Testimony Against:      (Education)  None.

(Capital Facilities & Financing)  None.