HOUSE BILL REPORT

HB 1746

BYRepresentatives Rasmussen, Peery, Wang, Taylor, Cole, Jacobsen, P. King, Schoon, D. Sommers and Dorn

Authorizing pooled insurance agreements for schools and educational service districts.

House Committe on Education

Majority Report:  Do pass.  (21)

      Signed by Representatives Peery, Chair; Spanel, Vice Chair; Appelwick, Betrozoff, Butterfield, Cole, Cooper, Ebersole, Fuhrman, Holland, Holm, P. King, Pruitt, Rasmussen, Rayburn, Rust, Schoon, Taylor, Todd, Valle and Walker.

House Staff:Susan Patrick (786-7111)

AS REPORTED BY COMMITTEE ON EDUCATION FEBRUARY 3, 1988

BACKGROUND:

Currently, school districts are authorized to self-insure or to enter self- funding pools with other districts or educational service districts to cover their liability insurance needs.  To enter such an arrangement, a district must have sufficient funds to pay claims against it or have invested funds with the pool to assure that sufficient money is available to pay all claims.  If a district does not have funds available, it may not enter into a self-insurance or self-funding arrangement.

Districts may enter into nonvoted debt which must be liquidated six months after the end of the school year.  The nonvoted debt cannot exceed 3/8 of one percent of the district's assessed valuation.

SUMMARY:

School districts would be authorized to enter into an interlocal cooperation agreement to self fund insurance for a period of up to five years.  Districts would be authorized to issue bonds, or other evidence of indebtedness to fund the self-funding pool.  Voter approval would not be required so long as the total indebtedness does not exceed 3/8 of one percent of the district's assessed valuation.  This debt would be long term and would not have to be liquidated within six months after the end of the school year.

Fiscal Note:      Requested January 28, 1988.

House Committee ‑ Testified For:    Larry Swift, Washington State School Directors' Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    This will allow districts to pool their resources to meet their liability insurance needs through self-funding.  The issuance of nonvoter approved bonds by the association which will issue the bonds is a mechanism to assure that all districts have the option of participating.  This is a funding mechanism that has existed in statute, but there has never been authority for the cooperative of districts participating in an insurance pool to issue nonvoter approved bonds.

House Committee - Testimony Against:      None Presented.