As initially proposed, SF 38 established a new system for funding school capital construction in the wake of the Wyoming Supreme Court decision declaring the old system unconstitutional.

Under SF 38, a school district could vote for a local bond issue, and the state would make up the difference between that school district’s resources and the amount equal to the average assessed valuation per student of the state’s five wealthiest districts.

The bill essentially established a state entitlement program for school capital construction: If a school district approved a bond issue, the state would be obliged to provide the supplemental funding, without any input on the need for (or type of) construction, or any control over the cost.

The bill made no provision for assuming school districts' existing bonded indebtedness, essentially punishing districts which taxed themselves more under the old school finance system to provide adequate facilities.

Because the Wyoming Supreme Court's decision placed responsibility for providing safe and efficient school buildings on the state, SF 38 included rather complicated provisions for dealing with districts which refused to bond to improve substandard facilities, including the possibility of state takeover. However, because these provisions had no basis in law, they were widely viewed as impossible to enforce.

Proponents of SF 38 argued that the bill retained school districts' local control, and that districts would step up to the plate and bond themselves to repair or replace inadequate facilities.

Opponents argued that since it is the state's responsibility to assure safe and efficient school buildings -- and the state's money at stake -- the bill should include provisions giving the state authority to compel districts to improve substandard school facilities.

The Senate defeated an amendment to include school districts’ existing bonded indebtedness in the new system, and to roughly equalize districts with existing bonded indebtedness with those issuing bonds in the future. This was accomplished by setting the state’s supplement at the amount needed to bring the district to 150% of the statewide average assessed valuation per student instead of the average of the five wealthiest districts.

After rejecting the above amendment, the Senate adopted a complicated method to equalize funding by putting property tax revenue from state-assessed property (industrial and mineral) into a statewide pool, and then passed the bill.

The property pool amendment was promptly deleted in the House, which also defeated an amendment similar to the Senate amendment on including districts’ existing bonded indebtedness and supplementing to 150% of the statewide average assessed valuation per student.

The House later adopted the 150% portion of the latter amendment, but not the provisions for including districts' existing bonded indebtedness.

The House also adopted an amendment requiring districts which approve a bond issue to submit plans for improving their deficient facilities for the capital construction priority list maintained by the Wyoming Department of Education. This amendment also limited the state’s supplemental funds to the amount needed to bring the facilities up to a safe and efficient condition.

Finally, the House adopted an amendment making the state’s obligation to supplement local revenues subject to the funds available in the capital construction program, rather than giving districts an unlimited draw on state coffers.

SF 38 passed the Senate, 18-12, and the House, 39-19 (2 excused).

It took two joint conference committees to come up with a bill acceptable to both houses. Joint Conference Committee #2 did so by gutting the bill entirely, leaving only provisions directing the Select Committee on School Finance and the Joint Education Interim Committee to make recommendations to the 1999 Legislature on how to fund school building and facility repair and replacement needs.

Beginning July 1, 1998, Wyoming has no system for funding school capital construction.