[atlas:bill]

AN ACT Relating to ensuring funding for cost-of-living increases for certain school district and community and technical college employees; amending RCW 28A.400.205; reenacting and amending RCW 43.135.045; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. It is the intent of the legislature to ensure full funding for the state's obligation under Initiative Measure No. 732, as codified under RCW 28A.400.205, 28A.400.206, 28B.50.465, and 28B.50.468. To this end, the legislature intends to require prefunding of the costs of the initiative. By requiring the initiative to be funded through an advance deposit in the emergency reserve fund, the legislature will assure both that moneys to fund the initiative will be available in advance of the need for them, and that the funds will be protected against expenditure for any other purpose.

Sec. 2. RCW 43.135.045 and 2001 c 3 s 9 (Initiative Measure No. 728), 2000 2nd sp.s. c 5 s 1, and 2000 2nd sp.s. c 2 s 3 are each reenacted and amended to read as follows:

(1) The emergency reserve fund is established in the state treasury. During each fiscal year, the state treasurer shall deposit in the emergency reserve fund all general fund‑-state revenues in excess of the state expenditure limit for that fiscal year. Deposits shall be made at the end of each fiscal quarter based on projections of state revenues and the state expenditure limit. The treasurer shall make transfers between these accounts as necessary to reconcile actual annual revenues and the expenditure limit for fiscal year 2000 and thereafter.

(2) By June 30, 2003, and by June 30th of the second year of each fiscal biennium thereafter, the legislature shall deposit in the emergency reserve fund an amount estimated by the office of financial management, in consultation with the fiscal committees of the legislature, to be sufficient to fund, during the succeeding fiscal biennium, the annual salary adjustments for school district and community and technical college employees as required in RCW 28A.400.205, 28B.50.465, and 28B.50.468. Amounts deposited in the emergency reserve fund under this subsection shall be expended solely for the purpose of providing annual salary adjustments under RCW 28A.400.205, 28B.50.465, and 28B.50.468.

(3) Except for moneys deposited pursuant to subsection (2) of this section, the legislature may appropriate moneys from the emergency reserve fund only with approval of at least two-thirds of the members of each house of the legislature, and then only if the appropriation does not cause total expenditures to exceed the state expenditure limit under this chapter.

((~~(3)~~)) (4) The emergency reserve fund balance shall not exceed five percent of annual general fund‑-state revenues as projected by the official state revenue forecast, exclusive of amounts deposited under subsection (2) of this section. Any balance in excess of five percent, exclusive of amounts deposited under subsection (2) of this section, shall be transferred on a quarterly basis by the state treasurer as follows: Seventy-five percent to the student achievement fund hereby created in the state treasury and twenty-five percent to the general fund balance. The treasurer shall make transfers between these accounts as necessary to reconcile actual annual revenues for fiscal year 2000 and thereafter. When per-student state funding for the maintenance and operation of K-12 education meets a level of no less than ninety percent of the national average of total funding from all sources per student as determined by the most recent published data from the national center for education statistics of the United States department of education, as calculated by the office of financial management, further deposits to the student achievement fund shall be required only to the extent necessary to maintain the ninety-percent level. Remaining funds are part of the general fund balance and these funds are subject to the expenditure limits of this chapter.

((~~(4)~~)) (5) The education construction fund is hereby created in the state treasury.

(a) Funds may be appropriated from the education construction fund exclusively for common school construction or higher education construction.

(b) Funds may be appropriated for any other purpose only if approved by a two-thirds vote of each house of the legislature and if approved by a vote of the people at the next general election. An appropriation approved by the people under this subsection shall result in an adjustment to the state expenditure limit only for the fiscal period for which the appropriation is made and shall not affect any subsequent fiscal period.

((~~(5)~~)) (6) Funds from the student achievement fund shall be appropriated to the superintendent of public instruction strictly for distribution to school districts to meet the provisions set out in the student achievement act. Allocations shall be made on an equal per full-time equivalent student basis to each school district.

((~~(6)~~)) (7) Earnings of the emergency reserve fund under RCW 43.84.092(4)(a) shall be transferred quarterly to the multimodal transportation account, except for those earnings that are in excess of thirty-five million dollars each fiscal year. Within thirty days following any fiscal year in which earnings transferred to the multimodal transportation account under this subsection did not total thirty-five million dollars, the state treasurer shall transfer from the emergency reserve fund an amount necessary to bring the total deposited in the multimodal transportation account under this subsection to thirty-five million dollars. The revenues to the multimodal transportation account reflected in this subsection provide ongoing support for the transportation programs of the state. However, it is the intent of the legislature that any new long-term financial support that may be subsequently provided for transportation programs will be used to replace and supplant the revenues reflected in this subsection, thereby allowing those revenues to be returned to the purposes to which they were previously dedicated.

Sec. 3. RCW 28A.400.205 and 2001 c 4 s 2 (Initiative Measure No. 732) are each amended to read as follows:

(1) School district employees shall be provided an annual salary cost-of-living increase in accordance with this section.

(a) The cost-of-living increase shall be calculated by applying the rate of the yearly increase in the cost-of-living index to any state-funded salary base used in state funding formulas for teachers and other school district employees. Beginning with the 2001-02 school year, and for each subsequent school year, each school district shall be provided a cost-of-living allocation sufficient to grant this cost-of-living increase for the salaries, including mandatory salary-related benefits, of all employees of the district.

(b) A school district shall distribute its cost-of-living allocation for salaries and salary-related benefits in accordance with the district's salary schedules, collective bargaining agreements, and compensation policies. No later than the end of the school year, each school district shall certify to the superintendent of public instruction that it has spent funds provided for cost-of-living increases on salaries and salary-related benefits.

(c) Any funded cost-of-living increase shall be included in the salary base used to determine cost-of-living increases for all school employees in subsequent years. For teachers and other certificated instructional staff, the rate of the annual cost-of-living increase funded for certificated instructional staff shall be applied to the base salary used with the statewide salary allocation schedule established under RCW 28A.150.410 and to any other salary models used to recognize school district personnel costs.

(d) Beginning with the 2001-02 school year, the state shall fully fund the cost-of-living increase in this section as part of its obligation to meet the basic education requirements under Article IX of the Washington Constitution. During each regular session in an odd-numbered year, the legislature shall appropriate from the emergency reserve fund, solely for the purposes of and in accordance with this section, money deposited in the emergency reserve fund under RCW 43.135.045(2) and any other money necessary to carry out the intent of this section.

(2) For the purposes of this section, "cost-of-living index" means, for any school year, the previous calendar year's annual average consumer price index, using the official current base, compiled by the bureau of labor statistics, United States department of labor for the state of Washington. If the bureau of labor statistics develops more than one consumer price index for areas within the state, the index covering the greatest number of people, covering areas exclusively within the boundaries of the state, and including all items shall be used for the cost-of-living index in this section.