Washington SB 5978: Authorizing the office of the superintendent of public instruction to act as a guarantor for a county when the county provides a loan to a school district.

Bill Text

AN ACT Relating to the authority of the office of the 1
superintendent of public instruction to act as a guarantor for a 2
county when the county provides a loan to a school district; adding a 3
new section to chapter 28A.505 RCW; and making an appropriation.4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. A new section is added to chapter 28A.505 6
RCW to read as follows:7
(1) The office of the superintendent of public instruction is 8
authorized to act as a guarantor for a county that has agreed to 9
provide a loan to a school district that is on binding conditions 10
pursuant to RCW 28A.505.110 and facing long-term financial distress.11
(2) The office of the superintendent of public instruction must 12
adopt rules to implement this section. The rules must include:13
(a) A process for how the office of the superintendent of public 14
instruction will determine whether it will act as a guarantor for a 15
county; and16
(b) A process for enhanced financial oversight if a school 17
district defaults on its loan with a county. Enhanced financial 18
oversight must be in place for at least a year, and the office of the 19
superintendent of public instruction may choose to extend this 20
oversight beyond a year.21
S-3823.1
SENATE BILL 5978
State of Washington 68th Legislature 2024 Regular Session
By Senators Robinson and Nobles
Prefiled 01/04/24. Read first time 01/08/24. Referred to Committee
on Early Learning & K-12 Education.
p. 1 SB 5978

(i) Enhanced financial oversight must include a school district 1
submitting a viable two-year financial plan to the office of the 2
superintendent of public instruction within 45 days of a default. The 3
financial plan must include estimates of revenue, expenditures, 4
enrollment, staffing, and cash flow projections.5
(ii) Enhanced financial oversight may include, but is not limited 6
to, the following:7
(A) A school district not approving any new contracts or not 8
approving changes or renewals to any existing contracts without 9
obtaining prior written approval from the office of the 10
superintendent of public instruction;11
(B) The office of the superintendent of public instruction 12
appointing a special administrator that will oversee and carry out 13
financial conditions set by the office of the superintendent of 14
public instruction;15
(C) The office of the superintendent of public instruction having 16
final approval authority regarding whether administrators should be 17
retained, released, or reassigned duties, as allowed by personnel and 18
other previously entered into legal agreements; and19
(D) The office of the superintendent of public instruction 20
approving or directing changes to the school district's two-year 21
financial plan to ensure it is viable and sustainable such as the 22
liquidation or disposition of the school district's fixed assets and 23
contractual liabilities by any reasonable and documented method.24
(3) Nothing in this section requires the office of the 25
superintendent of public instruction to implement any of the actions 26
listed in subsection (2)(b)(ii) of this section.27
NEW SECTION. Sec. 2. The sum of $10,000,000, or as much thereof 28
as may be necessary, is appropriated for the fiscal year ending June 29
30, 2025, from the general fund to the office of the superintendent 30
of public instruction for the purposes of this act. The appropriation 31
in this section is subject to the following conditions and 32
limitations:33
(1) Contingent guarantor funding is provided solely for when the 34
office of the superintendent of public instruction acts as a 35
guarantor for a county under section 1 of this act and a school 36
district defaults on its loan with the county. To be eligible for 37
these funds, a request letter for contingent guarantor funding signed 38
by the affected county must be submitted to the office of financial 39
p. 2 SB 5978

management and the appropriate legislative fiscal and education 1
committees. The request must include a statement describing the 2
school district's default and long-term financial distress.3
(2) For emergencies occurring during a legislative session, an 4
affected county must notify the legislative fiscal and education 5
committees before requesting the contingent guarantor funds from the 6
office of financial management.7
(3) The office of financial management must notify the 8
legislative evaluation and accountability program committee and the 9
legislative fiscal and education committees as contingent guarantor 10
funding is approved and include what funded level was approved.11
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p. 3 SB 5978