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SB 5095

Concerning school districts' authority to contract indebtedness for school construction.

2025-2026 Regular Session Introduced by Annette Cleveland and 10 co-sponsors

Enables districts to finance school construction with non-voted debt, subject to limits; second substitute lets districts forgo state construction aid for the project.

Senate Rules "X" file.
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Bill Summary · SB 5095

Summary — SB 5095 (69th Legislature, 2025 Regular Session)

Status snapshot
- Bill number: SB 5095
- Title: Concerning school districts' authority to contract indebtedness for school construction
- Introduced (prefiled): 12/20/2024; First reading 01/13/2025
- Most recent status: Senate Rules “X” file (03/17/2025)
- Committees/major actions: Early Learning & K‑12 Education (1st substitute recommended 02/04/2025); Ways & Means (2nd substitute recommended 02/28/2025; WM majority do pass). Public hearings: 01/16/2025 (EDU) and 02/17/2025 (WM).

Purpose and intent
- Authorize school districts to contract indebtedness (issue bonds, notes, other obligations) for school construction/related purposes without seeking a voter bond approval, while establishing statutory conditions, notice requirements, and limits on use and sale of proceeds. The aim is to provide districts an alternative, non‑voted financing tool for construction, modernization, purchase of property, and related capital needs.

Key provisions (substantive changes and requirements)
1. Expanded non‑voted indebtedness authority
- Districts may issue bonds, notes, or other evidences of indebtedness without a public bond election for purposes listed in RCW 28A.530.010 (through subsection (5)) and for purchasing real or personal property or property rights connected to authorized district powers.
- Issuance remains subject to existing statutory indebtedness limits (see RCW 39.36.020).

  1. Eligibility conditions to use the non‑voted authority

    • District must have voter approval to collect a levy to support school construction/modernization/remodeling under RCW 84.52.053.
    • District must not have been on binding conditions under RCW 28A.505.110 during a specified look‑back period (versions differ: original bill used three years; substitute versions use two years).
    • Second substitute (WM) adds a material condition: the district must forgo state construction funding assistance for that specific project under RCW 28A.525.162–.180 (i.e., districts using non‑voted indebtedness for a project waive eligibility for the state's construction assistance for that project).

  2. Public notice and hearing for large non‑voted issues

    • Before issuing non‑voted bonds exceeding $250,000, the district must publish notice of intent and hold a public hearing at a regular or special board meeting.
    • Notice content: date/time/place of hearing; purpose and amount; bond type, terms and conditions; proposed repayment source; and an invitation for public comment.
    • Publication timing: once weekly for two consecutive weeks in a newspaper of general circulation (last notice no later than seven days before the hearing).
    • Exception: these notice/hearing requirements do not apply to refinancing/refunding of existing bonds.

  3. Sale and use of proceeds

    • Bonds/notes must be issued and sold in accordance with chapter 39.46 RCW.
    • Proceeds must be deposited in the district’s capital projects fund, transportation vehicle fund, or general fund, as appropriate.

  4. Amendment to state construction funding statute (Second Substitute)

    • SB 5095 (2nd sub) also amends RCW 28A.525.162 (common school construction fund allotment rules). The bill links use of the non‑voted authority to forgoing state assistance; the text also retains background rules about local fund requirements and enrollment adjustments used to compute state assistance (the bill file shows the statute being amended; text truncated in the version provided).

Who is affected
- School districts: gain an option to finance capital projects without a voter bond measure, subject to levy approval and other eligibility conditions (including waiver of state construction aid under the 2nd substitute).
- Local taxpayers and local budgets: potential for districts to increase debt without a bond election (but levy approval requirement remains). Forgoing state assistance (if second substitute enacted) could increase local funding responsibility for some projects.
- State agencies: Office of Superintendent of Public Instruction (OSPI) and state common school construction fund administration may be affected because districts electing non‑voted financing might decline state funding for projects.

Procedural/timing notes
- The bill progressed through Early Learning & K‑12 Education (1st substitute) and Ways & Means (2nd substitute) committees and was placed on the Senate Rules “X” file on 03/17/2025. Committee votes show majority support in both committees, with recorded minority objections in committee reports.
- Differences between versions:
- Original filed bill required a 3‑year non‑binding‑conditions lookback; substitutes use a 2‑year lookback.
- Second substitute adds the requirement that districts forego state construction assistance for the project (a significant policy change affecting state/local cost sharing) and explicitly amends RCW 28A.525.162.

Potential impacts and considerations
- Pros: Provides districts flexibility to move forward on urgent capital needs without the delay or uncertainty of a voter bond election; may allow more responsive facility management when voters have already approved supporting levies.
- Cons/Tradeoffs: Removes direct voter approval for some debt; could increase local fiscal exposure if districts take on debt without state participation (especially under the second substitute where state aid is waived); may reduce demand on state construction funds but shift costs to local taxpayers.

For further review
- Relevant statutes cited: RCW 28A.530.010, 28A.530.080 (amended), 28A.525.162 (amended in 2nd sub), 28A.505.110, 84.52.053, 39.36.020, and chapter 39.46 RCW.

Compiled from official sources — confirm details with the bill’s official record.

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