Capital assistance/schools

AN ACT Relating to capital financial assistance to small school 1
districts with demonstrated funding challenges; amending RCW 2
28A.525.159; adding a new section to chapter 28A.525 RCW; creating a 3
new section; and providing an effective date. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature intends to create a new 6
grant program through which small, financially distressed school 7
districts that generally do not participate in the current school 8
construction assistance program will be able to get the necessary 9
funds to modernize or rebuild their school buildings.10
NEW SECTION. Sec. 2. A new section is added to chapter 28A.525 11
RCW to read as follows: 12
(1) Supplementary modernization and new construction grants and 13
planning grants for financially distressed school districts must be 14
awarded and determined in accordance with this section.15
(2) Applicant eligibility criteria. Subject to subsection (4) of 16
this section, only school districts that have a student headcount 17
enrollment of 1,000 students or fewer are eligible for grants under 18
this section. 19
(3) Project eligibility criteria. 20
H-0718.1
HOUSE BILL 1538
State of Washington 69th Legislature 2025 Regular Session
By Representatives McEntire, Couture, Rude, Leavitt, and Doglio
Read first time 01/23/25. Referred to Committee on Capital Budget.
p. 1 HB 1538
(a) Projects funded under this section must meet the following 1
conditions: (i) Projects must comprehensively modernize or replace 2
instructional buildings that are at least 30 years old and that are 3
recorded as poor or unsatisfactory condition by the office of the 4
superintendent of public instruction; and (ii) projects must not 5
exceed 110 percent of the statewide average cost per square foot for 6
new construction or modernization, as applicable, and as estimated by 7
the advisory committee and approved by the office of the 8
superintendent of public instruction. 9
(b) To meet the project eligibility criteria for comprehensive 10
modernization specified under (a) of this subsection, projects must 11
correct critical physical deficiencies and essential safety concerns, 12
including: (i) Seismic vulnerabilities; (ii) failing or broken 13
building and site systems; (iii) deficiencies of infrastructure and 14
components; (iv) barriers to program accessibility; (v) deteriorated 15
exterior conditions; and (vi) deficiencies in interior classroom 16
spaces. Project approaches may include modernizing, repairing, 17
reconfiguring, or replacing existing buildings, constructing new 18
buildings, and upgrading deteriorated and outdated site 19
infrastructure. 20
(c) School districts applying for a grant under this section must 21
submit separate applications for each individual school.22
(4) Other eligibility criteria. School districts with incomplete 23
or outdated building inventories, natural hazard assessments, and 24
condition information as required by the office of the superintendent 25
of public instruction are not eligible to apply for construction 26
grants under this section but may apply for planning grants. Building 27
inventory and condition information must be provided by an 28
independent consultant certified by the office of the superintendent 29
of public instruction. A seismic building assessment must be 30
conducted by an engineer licensed as a structural engineer in 31
Washington state. 32
(5) Eligible use of grants. A grant awarded pursuant to this 33
section may only be used for the following purposes: (a) The 34
collection of the required information in subsection (4) of this 35
section; (b) all predesign and design costs including value 36
engineering and constructability review; and (c) all related costs 37
associated with the project except school district administration 38
costs as determined by the office of the superintendent of public 39
instruction. 40
p. 2 HB 1538
(6) Required grant list. 1
(a) The superintendent of public instruction must propose a list 2
of prioritized planning and construction grants pursuant to this 3
section for school districts meeting the eligibility requirements 4
established in subsection (2) of this section to the governor by 5
September 1st of even-numbered years, beginning on September 1, 2028. 6
This list must include: (i) A description of the proposed project; 7
(ii) the proposed planning grant amount, when applicable; (iii) the 8
proposed construction grant amount, when applicable; (iv) the 9
anticipated school construction assistance program amount; (v) the 10
anticipated local share of project cost; (vi) the estimated total 11
project cost; and (vii) the project score in total and by category.12
(b) The superintendent of public instruction and the governor may 13
determine the level of funding in their omnibus capital 14
appropriations act requests to support grants under this section, but 15
their funding requests must follow the prioritized list prepared by 16
the advisory committee unless new information determines that a 17
specific project is no longer viable as proposed. 18
(7) Planning grant requirements and prioritization. Subject to 19
the availability of amounts appropriated for this specific purpose, 20
the office of the superintendent of public instruction must assist 21
eligible school districts that are interested in applying for a 22
construction grant under this section by providing technical 23
assistance and planning grants. School districts seeking planning 24
grants under this section must provide a brief statement describing 25
existing school conditions, building system and site deficiencies, 26
current and five-year projected student headcount enrollment, student 27
achievement measures, and financial constraints. If applications for 28
planning grants exceed funds available, the office of the 29
superintendent of public instruction may prioritize planning grant 30
requests with primary consideration given to school district 31
financial capacity and facility conditions. 32
(8) Construction grant requirements and prioritization.33
(a) School districts applying for a construction grant under this 34
section must have received and completed a planning grant under 35
subsection (7) of this section or have completed construction 36
documents including drawings, specifications, total project cost 37
estimates, contract and procurement requirements, and other materials 38
required by the advisory committee, as part of the construction grant 39
application process. 40
p. 3 HB 1538
(b) Subject to the availability of amounts appropriated for this 1
specific purpose, the advisory committee must prioritize applications 2
from school districts based on the total number of points awarded 3
under this subsection. The total number of points awarded to an 4
application may not exceed 100 points and must be awarded according 5
to the following criteria: 6
(i) Remaining school district debt capacity. For the purposes of 7
grant prioritization under this section, remaining school district 8
debt capacity must be determined pursuant to RCW 39.36.020. 9
Applications must be awarded no more than 45 points related to debt 10
capacity under this subsection (8)(b)(i) and the number of points 11
awarded related to remaining debt capacity must be calculated as 12
follows: 13
(A) Twenty-five points must be multiplied by the quotient of the 14
applying school district's remaining debt capacity divided by the 15
average remaining debt capacity of school districts statewide 16
subtracted from 0.49, and then the result of the foregoing must be 17
divided by 0.49 plus the applying school district's remaining debt 18
capacity divided by the average remaining debt capacity of school 19
districts statewide. A school district may not receive a score of 20
less than zero under this subsection (8)(b)(i)(A).21
22 Debt Capacity Scoring Percentage
23
24
(0.49 - School district's remaining debt
capacity
÷ Average remaining debt capacity of school districts
statewide)
25 25 Points X ---
26
27
(0.49 + School district's remaining debt
capacity
÷ Average remaining debt capacity of school districts
statewide)
(B) The advisory committee may award no more than 20 additional 28
points to an application for a construction grant based on the 29
severity of the applying school district's financial constraints. 30
Applying school districts shall submit brief statements describing 31
financial constraints as part of the construction grant application 32
process. 33
(ii) Facility condition. Applications must be awarded no more 34
than 40 points related to facility conditions under this subsection 35
(8)(b)(ii). The advisory committee, in consultation with the office 36
of the superintendent of public instruction, shall create and apply a 37
formula for awarding points under this subsection (8)(b)(ii) related 38
p. 4 HB 1538
to facility condition. This formula must prioritize grant 1
applications from school districts with the most significant building 2
deficiencies within the application pool. The office of the 3
superintendent of public instruction shall provide facility condition 4
data to the advisory committee related to each application.5
(iii) District enrollment. Applications shall be awarded no more 6
than 15 points related to district enrollment under this subsection 7
(8)(b)(iii) and the number of points awarded must be calculated as 8
follows: 15 points must be multiplied by the quotient of the applying 9
school district's headcount enrollment divided by the average school 10
district headcount enrollment statewide subtracted from 0.32, and 11
then the result of the foregoing must be divided by 0.32 plus the 12
applying school district's headcount enrollment divided by the 13
average school district headcount enrollment statewide. A school 14
district may not receive a score of less than zero under this 15
subsection (8)(b)(iii). 16
17 Enrollment Scoring Percentage
18 (0.32 - School district's enrollment ÷ Average school district enrollment statewide)
19 15 Points X ---
20 (0.32 + School district's enrollment ÷ Average school district enrollment statewide)
(9) Eligibility and scoring criteria recommendations. The 21
advisory committee may propose changes to the eligibility threshold 22
and grant application scoring procedures to the legislature as they 23
learn more about the characteristics of school districts that are 24
unable to replace or modernize their aging school facilities.25
(10) Share of project costs. School districts receiving a grant 26
under this section must provide a district share in accordance with 27
the following requirements: 28
(a) Except as provided for under (b) and (c) of this subsection, 29
to receive a grant under this section a school district must provide, 30
for each grant awarded, a district share of project cost equal to at 31
least 50 percent of the district's remaining debt capacity pursuant 32
to RCW 39.36.020. 33
(b) To the extent that the district share requirement under (a) 34
of this subsection would, at the time of application, require the 35
estimated school district property tax rate increment associated with 36
the grant to exceed a threshold of $1.75 per $1,000 of assessed 37
property value, the office of the superintendent of public 38
p. 5 HB 1538
instruction must reduce the required district share to achieve an 1
estimated property tax rate equal to this threshold.2
(c) A school district may use federal funding, other nonstate 3
grant funding, and private donations to pay for its share under this 4
subsection. When calculating a district's share requirement under (a) 5
of this subsection, the superintendent of public instruction must 6
reduce the district's required share in a manner directly 7
proportionate to the amount of nonstate and nonschool district 8
funding provided to support the state grant. 9
(d) To determine the property tax rate threshold under (b) of 10
this subsection, the office of the superintendent of public 11
instruction must calculate the property tax rate increment associated 12
with the grant based on the estimated annualized debt service costs 13
for general obligation bonds issued with an average maturity of no 14
less than 20 years and the interest rate for state of Washington 15
general obligation bonds issued most closely to the date of 16
application for the grant. 17
(11) Coordination with the school construction assistance program 18
and local cost share. To the extent that a school district awarded a 19
grant under this section is also eligible for funding under the 20
school construction assistance program provided by RCW 28A.525.162 21
through 28A.525.180, the office of the superintendent of public 22
instruction must coordinate grant funding between the programs and 23
ensure that total state funding from a grant under this section and a 24
school construction assistance program grant does not exceed total 25
project costs minus the school district's share calculated under 26
subsection (10) of this section. School districts that receive grants 27
under this section may use the grant to fund the required local 28
funding equal to or greater than the difference between the total 29
approved project cost and the amount of state funding assistance 30
computed provided by RCW 28A.525.162 through 28A.525.180. However, 31
school districts coordinating grants provided in this section with 32
school construction assistance program funding are required to 33
contribute not less than the school district's required share as 34
calculated under subsection (10) of this section. 35
(12) Disbursement of grant funds and reporting requirements. The 36
office of the superintendent of public instruction must award grants 37
under this section to school districts. The grants must not be 38
awarded until the recipient has identified available local and other 39
resources sufficient to complete the approved project considering the 40
p. 6 HB 1538
amount of state grant funding. The grant must specify reporting 1
requirements for the district and must include: 2
(a) Updating all school inventory and condition data considered 3
necessary by the office of the superintendent of public instruction;4
(b) Submitting a final project report as specified by the office 5
of the superintendent of public instruction in consultation with the 6
advisory committee and approved by the school facilities citizen 7
advisory panel created under RCW 28A.525.025; and 8
(c) Implementing and maintaining an asset preservation program 9
for the facility receiving grant funding as required by the office of 10
the superintendent of public instruction's asset preservation 11
program. 12
(13) For the purposes of this section, "advisory committee" means 13
the advisory committee created under RCW 28A.525.159.14
Sec. 3. RCW 28A.525.159 and 2020 c 299 s 1 are each amended to 15
read as follows: 16
(1) School construction assistance program grants for small 17
school districts and state-tribal education compact schools must be 18
determined in accordance with this section. 19
(2) Eligibility. School districts and state-tribal education 20
compact schools with enrollments that are less than or equal to one 21
thousand students are eligible for small school district 22
modernization grants. The advisory committee specified in subsection 23
(4)(a) of this section may recommend amendments to the eligibility 24
threshold as they learn more about the characteristics of school 25
districts and state-tribal education compact schools that are unable 26
to modernize their aging school facilities. Districts with incomplete 27
information in the inventory and condition of schools data system are 28
not eligible to apply for construction grants but may apply for 29
planning grants. 30
(3) The office of the superintendent of public instruction must 31
assist eligible school districts and state-tribal education compact 32
schools that are interested in applying for a small school district 33
modernization grant under this section by providing technical 34
assistance and planning grants within appropriations for this 35
purpose. Districts and state-tribal education compact schools seeking 36
planning grants must provide a brief statement of the school 37
condition, its deficiencies, student enrollment, student achievement 38
measures, and financial limitations of the district or state-tribal 39
p. 7 HB 1538
education compact school. If applications for planning grants exceed 1
funds available, the office of the superintendent of public 2
instruction may prioritize the recipients of planning grants in order 3
to help districts and state-tribal education compact schools with the 4
most serious apparent building deficiencies, and the most limited 5
financial capacity. 6
(4) Prioritized construction grants and advisory committee.7
(a) The superintendent of public instruction must propose a list 8
of prioritized grants to the governor by September 1st of even-9
numbered years. The superintendent of public instruction must appoint 10
an advisory committee to prioritize applications from small school 11
districts and state-tribal education compact schools. Committee 12
members must have experience in financing, managing, repairing, and 13
improving school facilities in small school districts or state-tribal 14
education compact schools but must not be involved in a small school 15
district modernization program grant request for the biennium under 16
consideration. The office of the superintendent of public instruction 17
must provide administrative and staff support to the (([advisory])) 18
advisory committee. The office of the superintendent of public 19
instruction in consultation with the advisory committee must design a 20
grant application process with specific criteria for prioritizing 21
grant requests. 22
(b) The advisory committee created in (a) of this subsection must 23
evaluate final applications from eligible school districts and state-24
tribal education compact schools. The advisory committee must submit 25
a prioritized list of grants to the superintendent of public 26
instruction. The list must prioritize applications to achieve the 27
greatest improvement of school facilities, in the districts and 28
state-tribal education compact schools with the most limited 29
financial capacity, for projects that are likely to improve student 30
health, safety, and academic performance for the largest number of 31
students for the amount of state grant support. The advisory 32
committee must develop specific criteria to achieve the 33
prioritization. The submitted prioritized list must describe the 34
project, the proposed state funding level, and the estimated total 35
project cost including other funding and in-kind resources. The list 36
must also indicate student achievement measures that will be used to 37
evaluate the benefits of the project. The superintendent of public 38
instruction and the governor may determine the level of funding in 39
their omnibus capital appropriations act requests to support small 40
p. 8 HB 1538
school district modernization grants, but their funding requests must 1
follow the prioritized list prepared by the advisory committee unless 2
new information determines that a specific project is no longer 3
viable as proposed. 4
(5) Coordination with the school construction assistance program.5
(a) The full administrative and procedural process of school 6
construction assistance program funding under RCW 28A.525.162 through 7
28A.525.180 may be streamlined by the office of the superintendent of 8
public instruction in order to coordinate eligible school 9
construction assistance program funding with the small school 10
district modernization grants. Such coordination must ensure that 11
total state funding from both grants does not exceed total project 12
costs minus available local resources. 13
(b) Projects seeking small school district modernization grants 14
must meet the requirements for a school construction assistance 15
program grant except for the following: (i) The estimated cost of the 16
project may be less than forty percent of the estimated replacement 17
value of the facility, and (ii) local funding assistance percentage 18
requirements of the school construction assistance program do not 19
apply. However, available district and state-tribal education compact 20
school resources are considered in prioritizing small school district 21
modernization grants. 22
(6) Disbursement of grant funds and reporting requirements. The 23
office of the superintendent of public instruction must award grants 24
to school districts and state-tribal education compact schools. The 25
grant must not be awarded until the district or state-tribal 26
education compact school has identified available local and other 27
resources sufficient to complete the approved project considering the 28
amount of the state grant. The grant must specify reporting 29
requirements from the district or state-tribal education compact 30
school, which must include updating all pertinent information in the 31
inventory and condition of schools data system and submitting a final 32
project report as specified by the office of the superintendent of 33
public instruction in consultation with the school facilities 34
((citizens [citizen] )) citizen advisory panel specified in RCW 35
28A.525.025. 36
(7) Beginning January 1, 2028, the superintendent of public 37
instruction must require the advisory committee in this section to 38
separately prioritize applications from small school districts and 39
state-tribal education compact schools from financially distressed 40
p. 9 HB 1538
school districts for grants under section 2 of this act and to 1
coordinate the application prioritization activities of the two 2
programs to minimize costs to the extent practicable.3
NEW SECTION. Sec. 4. Section 2 of this act takes effect January 4
1, 2028.5
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