FINAL BILL REPORT

SHB 2378

                                  C 159 L 90

BYHouse Committee on Capital Facilities & Financing (originally sponsored by Representatives Leonard, Holland, Walker, Cole, Nutley, Pruitt, Prentice, Kirby, Heavey, Ebersole, G. Fisher, Peery, H. Sommers, Miller, Winsley and Wineberry)

Changing the authority of educational service district boards with regard to the purchase and sale of property used for the operation of the educational service district.

House Committe on Capital Facilities & Financing

Senate Committee on Education and Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

Educational Service Districts (ESDs) receive funding from three main sources:  state allocations, competitive state and federal grants, and cooperative agreements with school districts.  State funding is based on statutorily defined "core services" provided by each ESD.  State funds make up as little as 5 percent of an ESD's budget.

Overhead costs such as housing for ESD offices are included in cooperative agreements and as part of the state funds allotted for core services.  ESDs have authority to enter into contracts for up to 20 years to rent or lease building space.  The service districts also have authority, with prior approval of the State Board of Education, to purchase or otherwise contract for real or personal property necessary for the operation of the ESD.

Because ESDs do not have taxing authority, they cannot issue bonds for the purchase of buildings or other real property.  Some ESDs have been able to purchase facilities through lease-purchase agreements.

SUMMARY:

Educational Service Districts (ESDs) are given authority to borrow funds to acquire real or personal property necessary for the operation of the ESD, subject to provisions that the State Board of Education may establish for these acquisitions.  This authority is given only to ESD's serving a minimum of 200,000 students.  When borrowing funds, the ESD must pledge as collateral the property being acquired.  Borrowing requires the existence of a note or other instrument between the district and the lender.

VOTES ON FINAL PASSAGE:

      House 95   0

      Senate    44     2 (Senate amended)

      House             (House refused to concur)

Free Conference Committee

      Senate    45     0

      House 95   0

EFFECTIVE:June 7, 1990