State of Washington | 63rd Legislature | 2013 Regular Session |
READ FIRST TIME 04/05/13.
AN ACT Relating to education funding; amending RCW 43.135.025, 82.45.100, 82.16.020, 82.18.040, 67.70.190, 28A.525.010, 28A.525.020, 28A.515.320, 39.42.140, and 84.52.067; reenacting and amending RCW 82.45.060 and 43.135.045; adding a new section to chapter 28A.150 RCW; adding a new section to chapter 82.08 RCW; creating new sections; providing effective dates; providing an expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 100 The legislature recognizes that it is the
paramount duty of the state under Article IX of the state Constitution
to provide for the education of the citizens of the state. The state
supreme court ruled the legislature has not provided adequate state
funding from dependable and regular sources to comply with the
paramount duty. It is the intent of the legislature, therefore,
through section 101 of this act to modify the state expenditure limit
to ensure a limit is placed on the remainder of state government
expenditures that will enable the state to commit an increasing
proportion of state tax dollars and the state budget to the education
of our citizens in fulfillment of the state's paramount duty.
Sec. 101 RCW 43.135.025 and 2009 c 479 s 35 are each amended to
read as follows:
(1) The state shall not expend from the general fund or related
fund during any fiscal year state moneys in excess of the state
expenditure limit established under this chapter.
(2) Except pursuant to a declaration of emergency under RCW
((43.135.035)) 43.135.034 or pursuant to an appropriation under RCW
43.135.045(2), the state treasurer shall not issue or redeem any check,
warrant, or voucher that will result in a state general fund or related
fund expenditure for any fiscal year in excess of the state expenditure
limit established under this chapter. A violation of this subsection
constitutes a violation of RCW 43.88.290 and shall subject the state
treasurer to the penalties provided in RCW 43.88.300. After July 1,
2015, and prior to July 1, 2023, the state expenditure limit
established by this section does not apply to:
(a) State allocations to school districts and educational service
districts;
(b) Appropriations to the state's institutions of higher education
or appropriations to state student financial aid programs;
(c) Appropriations for the early learning program under RCW
43.215.141 and 43.215.142 and other licensed child care programs under
chapter 43.215 RCW that promote positive child outcomes through
curriculum, learning, and training;
(d) The costs of court rulings imposing new state costs issued
after July 1, 2015, and prior to July 1, 2023;
(e) Expenditures of extraordinary revenue growth, as defined in
Article 7, section 12 of the state Constitution, to the extent that the
extraordinary revenue growth is not deposited to the budget
stabilization account; or
(f) The cost of extraordinary growth in the caseloads of state
entitlement programs to the extent that total biennial entitlement
caseload costs exceed by one-third the average biennial percentage
growth over the prior five fiscal biennia, not including the cost of
new entitlements or the expansion of existing entitlements after
January 1, 2013, or the expansion of medicaid eligibility under the
federal affordable care act.
The exceptions established in (a) through (f) of this subsection
shall be calculated by the state expenditure limit committee.
(3) The state expenditure limit for any fiscal year shall be the
previous fiscal year's state expenditure limit increased by a
percentage rate that equals the fiscal growth factor.
(4)(a) For purposes of computing the state expenditure limit for
the fiscal year beginning July 1, ((2009)) 2013, the phrase "the
previous fiscal year's state expenditure limit" means the total state
expenditures from the state general fund((, the public safety and
education account, the health services account, the violence reduction
and drug enforcement account, the student achievement fund, the water
quality account, and the equal justice subaccount, not including
federal funds,)) and related funds for the fiscal year beginning July
1, ((2008)) 2012, plus the fiscal growth factor.
(b) For purposes of computing the state expenditure limit for the
fiscal year beginning July 1, 2015, the phrase "the previous fiscal
year's state expenditure limit" means the total state expenditures from
the state general fund and related funds plus the fiscal growth factor,
excluding expenditures for the purposes of subsection (2)(a), (b), and
(c) of this section.
(c) For purposes of computing the state expenditure limit for the
fiscal year beginning July 1, 2023, the phrase "the previous fiscal
year's state expenditure limit" means the total state expenditures from
the state general fund and related funds for the fiscal year beginning
July 1, 2022, plus the fiscal growth factor, including expenditures for
the purposes of subsection (2)(a) through (f) of this section.
(5) A state expenditure limit committee is established for the
purpose of determining and adjusting the state expenditure limit as
provided in this chapter. The members of the state expenditure limit
committee are the director of financial management, the attorney
general or the attorney general's designee, and the chairs and ranking
minority members of the senate committee on ways and means and the
house of representatives committee on ways and means. All actions of
the state expenditure limit committee taken pursuant to this chapter
require an affirmative vote of at least four members.
(6) Each November, the state expenditure limit committee shall
adjust the expenditure limit for the preceding fiscal year based on
actual expenditures and known changes in the fiscal growth factor and
then project an expenditure limit for the next two fiscal years. If,
by November 30th, the state expenditure limit committee has not adopted
the expenditure limit adjustment and projected expenditure limit as
provided in subsection (5) of this section, the attorney general or his
or her designee shall adjust or project the expenditure limit, as
necessary.
(7)(a) "Fiscal growth factor," after July 1, 2015, and prior to
July 1, 2023, means the average of the sum of inflation and population
change for each of the prior three fiscal years.
(b) "Inflation" means the percentage change in the implicit price
deflator for the United States for each fiscal year as published by the
federal bureau of labor statistics.
(c) "Population change" means the percentage change in state
population for each fiscal year as reported by the office of financial
management.
(d) "Fiscal growth factor," prior to July 1, 2015, and after July
1, 2023, means the average growth in state personal income for the
prior ten fiscal years.
(8) "General fund" means the state general fund and related funds.
(9) "Related funds" means the Washington opportunity pathways
account and the education legacy trust account.
NEW SECTION. Sec. 200 Article IX of the Washington state
Constitution states that it is the paramount duty of the state to make
ample provision for the education of all children residing within its
borders. The legislature finds that the proliferation of special
dedicated funds and diversions of state revenues for purposes other
than this paramount duty erodes the state's financial capacity to
fulfill this constitutional duty. The legislature intends to meet this
constitutional duty, in part, by reprioritizing some of these diverted
state resources to the paramount duty.
NEW SECTION. Sec. 201 A new section is added to chapter 28A.150
RCW to read as follows:
(1) Beginning July 1, 2013, and ending June 30, 2023, the office of
financial management must annually calculate the state general fund
expenditures that would have been expended that fiscal year under RCW
28A.400.205, 28B.50.465, and 28B.50.468, as they existed prior to their
repeal by chapter . . . (Substitute Senate Bill No. 5194), Laws of
2013. Annually, for each fiscal year subject to this section, the
office of financial management shall notify the state treasurer and the
fiscal committees of the legislature the amount calculated under this
section. On the last working day of the fiscal year, the state
treasurer must transfer such amount from the general fund to the
education legacy trust account created in RCW 83.100.230.
(2) If Substitute Senate Bill No. 5194 (educational compensation)
is not enacted by June 30, 2013, this section shall not take effect.
(3) This section expires July 1, 2023.
Sec. 210 RCW 82.45.060 and 2011 1st sp.s. c 50 s 975 and 2011 1st
sp.s. c 48 s 7035 are each reenacted and amended to read as follows:
There is imposed an excise tax upon each sale of real property at
the rate of one and twenty-eight one-hundredths percent of the selling
price. An amount equal to ((six and one-tenth)) two percent of the
proceeds of this tax to the state treasurer must be deposited in the
public works assistance account created in RCW 43.155.050((: PROVIDED,
That during the fiscal year 2011, six and one-tenth percent of the
proceeds of this tax must be deposited in the general fund for general
purpose expenditures)), and an amount equal to four and one-tenth
percent must be deposited in the education legacy trust account created
in RCW 83.100.230. Except as otherwise provided in this section, an
amount equal to one and six-tenths percent of the proceeds of this tax
to the state treasurer must be deposited in the city-county assistance
account created in RCW 43.08.290. ((During the 2011-2013 fiscal
biennium, 1.546 percent of the proceeds of this tax to the state
treasurer must be deposited in the city-county assistance account.))
Sec. 211 RCW 82.45.100 and 2010 1st sp.s. c 23 s 211 are each
amended to read as follows:
(1) Payment of the tax imposed under this chapter is due and
payable immediately at the time of sale, and if not paid within one
month thereafter will bear interest from the time of sale until the
date of payment.
(a) Interest imposed before January 1, 1999, is computed at the
rate of one percent per month.
(b) Interest imposed after December 31, 1998, is computed on a
monthly basis at the rate as computed under RCW 82.32.050(2). The rate
so computed must be adjusted on the first day of January of each year
for use in computing interest for that calendar year. The department
must provide written notification to the county treasurers of the
variable rate on or before December 1st of the year preceding the
calendar year in which the rate applies.
(2) In addition to the interest described in subsection (1) of this
section, if the payment of any tax is not received by the county
treasurer or the department of revenue, as the case may be, within one
month of the date due, there is assessed a penalty of five percent of
the amount of the tax; if the tax is not received within two months of
the date due, there will be assessed a total penalty of ten percent of
the amount of the tax; and if the tax is not received within three
months of the date due, there will be assessed a total penalty of
twenty percent of the amount of the tax. The payment of the penalty
described in this subsection is collectible from the seller only, and
RCW 82.45.070 does not apply to the penalties described in this
subsection.
(3) If the tax imposed under this chapter is not received by the
due date, the transferee is personally liable for the tax, along with
any interest as provided in subsection (1) of this section, unless an
instrument evidencing the sale is recorded in the official real
property records of the county in which the property conveyed is
located.
(4) If upon examination of any affidavits or from other information
obtained by the department or its agents it appears that all or a
portion of the tax is unpaid, the department must assess against the
taxpayer the additional amount found to be due plus interest and
penalties as provided in subsections (1) and (2) of this section. The
department must notify the taxpayer by mail, or electronically as
provided in RCW 82.32.135, of the additional amount and the same
becomes due and must be paid within thirty days from the date of the
notice, or within such further time as the department may provide.
(5) No assessment or refund may be made by the department more than
four years after the date of sale except upon a showing of:
(a) Fraud or misrepresentation of a material fact by the taxpayer;
(b) A failure by the taxpayer to record documentation of a sale or
otherwise report the sale to the county treasurer; or
(c) A failure of the transferor or transferee to report the sale
under RCW 82.45.090(2).
(6) Penalties collected on taxes due under this chapter under
subsection (2) of this section and RCW 82.32.090 (2) through (8) must
be deposited in the ((housing trust fund as described in chapter 43.185
RCW)) education legacy trust account created in RCW 83.100.230.
Sec. 220 RCW 82.16.020 and 2011 1st sp.s. c 48 s 7033 are each
amended to read as follows:
(1) There is levied and ((there shall be)) collected from every
person a tax for the act or privilege of engaging within this state in
any one or more of the businesses herein mentioned. The tax ((shall
be)) is equal to the gross income of the business, multiplied by the
rate set out after the business, as follows:
(a) Express, sewerage collection, and telegraph businesses: Three
and six-tenths percent;
(b) Light and power business: Three and sixty-two one-hundredths
percent;
(c) Gas distribution business: Three and six-tenths percent;
(d) Urban transportation business: Six-tenths of one percent;
(e) Vessels under sixty-five feet in length, except tugboats,
operating upon the waters within the state: Six-tenths of one percent;
(f) Motor transportation, railroad, railroad car, and tugboat
businesses, and all public service businesses other than ones mentioned
above: One and eight-tenths of one percent;
(g) Water distribution business: Four and seven-tenths percent.
(2) An additional tax is imposed equal to the rate specified in RCW
82.02.030 multiplied by the tax payable under subsection (1) of this
section.
(3) Twenty percent of the moneys collected under subsection (1) of
this section on water distribution businesses and sixty percent of the
moneys collected under subsection (1) of this section on sewerage
collection businesses ((shall)) must be deposited in the ((public works
assistance account created in RCW 43.155.050: PROVIDED, That during
the fiscal year 2011, twenty percent of the moneys collected under
subsection (1) of this section on water distribution businesses and
sixty percent of the moneys collected under subsection (1) of this
section on sewerage collection businesses must be deposited in the
general fund for general purpose expenditures)) education legacy trust
account created in RCW 83.100.230.
Sec. 230 RCW 82.18.040 and 2012 2nd sp.s. c 5 s 2 are each
amended to read as follows:
(1) Taxes collected under this chapter must be held in trust until
paid to the state. Except as otherwise provided in this subsection
(1), taxes received by the state must be deposited in the ((public
works assistance account created in RCW 43.155.050)) education legacy
trust account created in RCW 83.100.230. For the period beginning July
1, 2011, and ending June 30, 2015, taxes received by the state under
this chapter must be deposited in the general fund for general purpose
expenditures. For fiscal years 2016, 2017, and 2018, one-half of the
taxes received by the state under this chapter must be deposited in the
general fund for general purpose expenditures and the remainder
deposited in the ((public works assistance)) education legacy trust
account created in RCW 83.100.230. Any person collecting the tax who
appropriates or converts the tax collected is guilty of a gross
misdemeanor if the money required to be collected is not available for
payment on the date payment is due. If a taxpayer fails to pay the tax
imposed by this chapter to the person charged with collection of the
tax and the person charged with collection fails to pay the tax to the
department, the department may, in its discretion, proceed directly
against the taxpayer for collection of the tax.
(2) The tax is due from the taxpayer within twenty-five days from
the date the taxpayer is billed by the person collecting the tax.
(3) The tax is due from the person collecting the tax at the end of
the tax period in which the tax is received from the taxpayer. If the
taxpayer remits only a portion of the total amount billed for taxes,
consideration, and related charges, the amount remitted must be applied
first to payment of the solid waste collection tax and this tax has
priority over all other claims to the amount remitted.
Sec. 240 RCW 67.70.190 and 2009 c 564 s 949 are each amended to
read as follows:
Unclaimed prizes ((shall)) must be retained in the state lottery
account for the person entitled thereto for one hundred eighty days
after the drawing in which the prize is won, or after the official end
of the game for instant prizes. If no claim is made for the prize
within this time, all rights to the prize ((shall be)) are
extinguished, and the prize ((shall be retained in the state lottery
fund for further use as prizes, except that one-third of all unclaimed
prize money shall be deposited in the economic development strategic
reserve account created in RCW 43.330.250)) amount must be transferred
to the education legacy trust account created in RCW 83.100.230.
((On July 1, 2009, June 30, 2010, and June 30, 2011, all unclaimed
prize money retained in the state lottery fund [account] in excess of
three million dollars, excluding amounts distributed to the economic
development strategic reserve account, shall be transferred into the
state general fund.))
NEW SECTION. Sec. 250 A new section is added to chapter 82.08
RCW to read as follows:
(1) If either contingency in RCW 82.08.050(12) occurs, the
department, in consultation with the economic and revenue forecast work
group created in RCW 82.33.040, must annually estimate the anticipated
net increase in state sales tax revenues resulting from remote sellers
collecting and remitting sales tax on retail sales to buyers located in
this state.
(2) Annually, beginning in the fiscal year during which either of
the contingencies in RCW 82.08.050(12) occurred, the department must
notify the state treasurer of the estimated amount determined under
subsection (1) of this section for that fiscal year. On the last
working day of the fiscal year, the state treasurer must transfer such
amount from the general fund to the education legacy trust account
created in RCW 83.100.230.
(3) For purposes of this section, "net increase" means the increase
in state sales tax revenues received by the state resulting from remote
sellers collecting and remitting sales tax on retail sales to buyers
located in this state, which must reflect any vendor compensation the
state is required to provide sellers as a condition to requiring remote
sellers to collect sales tax on sales to Washington consumers.
Sec. 300 RCW 28A.525.010 and 1969 ex.s. c 223 s 28A.47.050 are
each amended to read as follows:
It is hereby declared to be the intent of the legislature that the
following provisions be enacted for the purpose of establishing and
providing for the operation of a program of state assistance to school
districts in providing school plant facilities. It is also the intent
of the legislature that first priority for the state's general
obligation bond capacity must be for capital budget appropriations
necessary to support this state assistance program to assist school
districts in the construction and ownership of local school plant
facilities. By fully funding the state assistance program under this
chapter with state general obligation bonds, the cash receipts to the
common school construction account, minus any amounts necessary for
debt service payments for reimbursable bonds, may be used for operating
budget appropriations for the common schools as allowed in Article IX,
section 3 of the state Constitution.
Sec. 301 RCW 28A.525.020 and 2006 c 263 s 301 are each amended to
read as follows:
The superintendent of public instruction, considering policy
recommendations from the school facilities citizen advisory panel,
shall have the power and duty (1) to prescribe rules governing the
administration, control, terms, conditions, and disbursements of
allotments to school districts to assist them in providing school plant
facilities; (2) to approve allotments to districts that apply for state
assistance whenever such action is advisable; (3) to authorize the
payment of approved allotments by warrant of the state treasurer; and
(4) in the event that the amount of state assistance applied for
exceeds the funds available for such assistance during any biennium, to
make allotments on the basis of the urgency of need for school
facilities in the districts that apply for assistance ((and/or to
prorate allotments among such districts in conformity with applicable
procedures and rules)) and to request any necessary supplemental
appropriations for inclusion in the governor's supplemental capital
budget request. The governor must review the technical accuracy of
that supplemental budget request and include sufficient general
obligation bonds from within available capacity, including
reprioritizing existing bond appropriations if necessary, in the
governor's budget submittal to the legislature to fully fund the
required state assistance.
Sec. 302 RCW 28A.515.320 and 1996 c 186 s 503 are each amended to
read as follows:
The common school construction fund is to be used exclusively for
the purpose of financing the construction of facilities for the common
schools. The sources of said fund shall be: (1) Those proceeds
derived from sale or appropriation of timber and other crops from
school and state land other than those granted for specific purposes;
(2) the interest accruing on the permanent common school fund less the
allocations to the state treasurer's service ((account [fund])) fund
pursuant to RCW 43.08.190 and the state investment board expense
account pursuant to RCW 43.33A.160 together with all rentals and other
revenue derived therefrom and from land and other property devoted to
the permanent common school fund; (3) all moneys received by the state
from the United States under the provisions of section 191, Title 30,
United States Code, Annotated, and under section 810, chapter 12, Title
16, (Conservation), United States Code, Annotated, except moneys
received before June 30, 2001, and when thirty megawatts of geothermal
power is certified as commercially available by the receiving utilities
and the department of ((community, trade, and economic development))
commerce, eighty percent of such moneys, under the Geothermal Steam Act
of 1970 pursuant to RCW 43.140.030; and (4) such other sources as the
legislature may direct. That portion of the common school construction
fund derived from interest on the permanent common school fund may be
used to retire such bonds as may be authorized by law for the purpose
of financing the construction of facilities for the common schools.
The interest accruing on the permanent common school fund less the
allocations to the state treasurer's service fund pursuant to RCW
43.08.190 and the state investment board expense account pursuant to
RCW 43.33A.160 together with all rentals and other revenues accruing
thereto pursuant to subsection (2) of this section prior to July 1,
1967, shall be exclusively applied to the current use of the common
schools.
To the extent that the moneys in the common school construction
fund are in excess of the amount necessary to allow fulfillment of the
purpose of said fund, the excess shall be available for deposit to the
credit of the permanent common school fund or available for the current
use of the common schools, as the legislature may direct. Any money
from the common school construction fund which is made available for
the current use of the common schools shall be restored to the fund by
appropriation, including interest income ((foregone [forgone]))
forgone, before the end of the next fiscal biennium following such use
only to the extent that other funds appropriated and available for
fully funding the school construction assistance program under chapter
28A.525 RCW are insufficient.
Sec. 303 RCW 43.135.045 and 2012 2nd sp.s. c 5 s 1 and 2012 1st
sp.s. c 10 s 5 are each reenacted and amended to read as follows:
The education construction fund is hereby created in the state
treasury.
(1) Funds may be appropriated from the education construction fund
exclusively for common school construction or higher education
construction. ((During the 2007-2009 fiscal biennium, funds may also
be used for higher education facilities preservation and maintenance.
During the 2009-2011 and 2011-2013 fiscal biennia, the legislature may
transfer from the education construction fund to the state general fund
such amounts as reflect the excess fund balance of the fund.))
(2) 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 must result
in an adjustment to the state expenditure limit only for the fiscal
period for which the appropriation is made and does not affect any
subsequent fiscal period.
(((3) After July 1, 2010, the state treasurer must transfer one
hundred two million dollars from the general fund to the education
construction fund by June 30th of each year. However, the transfers
may not take place in the fiscal biennium ending June 30, 2015.))
NEW SECTION. Sec. 400 It is the intent of the legislature by
sections 401 and 402 of this act to meet its obligation to fund the
common school system of the state by reducing future debt service
payments by the state.
Sec. 401 RCW 39.42.140 and 2011 1st sp.s. c 46 s 3 are each
amended to read as follows:
The state finance committee must recommend a working debt limit for
purposes of budget development for various purpose capital bond
appropriations. Nothing in this section shall in any manner affect the
validity of indebtedness incurred in compliance with the provisions of
Article VIII, section 1 of the state Constitution. The working debt
limit must be updated periodically following forecasts of the economic
and revenue forecast council. The governor and legislature must
develop capital bond budgets within the most recent recommended working
debt limit. The working debt limit must be lower than the state
constitutional debt limit in order to reserve capacity under the
constitutional limit for emergencies and economic uncertainties. In
order to begin to accomplish the objectives of stabilizing debt
capacity and reducing the debt service burden on the operating budget,
the state finance committee must recommend working debt limits of eight
and one-half percent from July 1, 2015, to and including June 30, 2017;
eight and one-quarter percent from July 1, 2017, to and including June
30, 2019; eight percent from July 1, 2019, to and including June 30,
((2021)) 2034; seven and three-quarters percent from July 1, ((2021))
2034, and thereafter. The state finance committee may recommend
modified working debt limits in response to extraordinary economic
conditions. The state finance committee is authorized to reduce or
delay the issuance of bonds if an issuance would result in exceeding
the recommended working debt limit.
Sec. 402 RCW 84.52.067 and 2009 c 479 s 73 are each amended to
read as follows:
All property taxes levied by the state for the support of common
schools shall be paid into ((the general fund of)) the state treasury
as provided in RCW 84.56.280. Beginning on the effective date of this
section through June 30, 2018, one-half shall be paid into the general
fund and one-half shall be paid into the education legacy trust account
for the purposes of RCW 83.100.230. Beginning July 1, 2018, all
property taxes levied by the state for the support of common schools
shall be paid into the education legacy trust account for the purposes
of RCW 83.100.230.
NEW SECTION. Sec. 500 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.
NEW SECTION. Sec. 501 (1) Except as otherwise provided in this
section, this act is necessary for the immediate preservation of the
public peace, health, or safety, or support of the state government and
its existing public institutions, and takes effect July 1, 2013.
(2) Section 220 of this act is necessary for the immediate
preservation of the public peace, health, or safety, or support of the
state government and its existing public institutions, and takes effect
June 30, 2013.