AN ACT Relating to school financing; amending RCW 84.52.0531; and adding a new section to chapter 28A.41 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 28A.41 RCW to read as follows:

The purpose of this section is to provide matching funds to school districts with excess levy rates greater than the state average excess levy rate in order to reduce the levy effort necessary for such districts to realize up to one-half the dollar amount calculated under RCW 84.52.0531(1). In order to effect the purpose of this section the following definitions and duties shall apply:

(1) As used in this section:

(a) "Adjusted assessed valuation" means the assessed valuation of taxable property applied for tax collection purposes during any calendar year preceding the distribution of moneys under this section as adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue;

(b) "Eligible school district" means a school district with both:

(i) A school district excess levy rate greater than the state average excess levy rate; and

(ii) A one or two-year excess levy for maintenance and operation purposes authorized by the electors under RCW 84.52.053;

(c) "School district excess levy rate" means the tax rate per thousand dollars of adjusted assessed valuation that would be necessary for a school district to levy one-half of the dollar amount calculated under RCW 84.52.0531(1); and

(d) "State average excess levy rate" means the tax rate per thousand dollars of the total adjusted assessed valuation of all taxable property within the state that would be necessary to levy one-half of the total dollar amount calculated under RCW 84.52.0531(1) for all school districts.

(2) The amount of moneys each eligible school district may receive under this section for a particular calendar year shall be equal to the product of:

(a) One-half of the dollar amount calculated under RCW 84.52.0531(1) or the total dollar amount certified by a board or boards of county commissioners for excess tax collections in behalf of the district, whichever is the lesser amount; multiplied by

(b) The ratio derived by subtracting the state average excess levy rate from the school district's excess levy rate and dividing the difference by the school district's excess levy rate.

(3) Commencing in 1989 and thereafter, such moneys as are appropriated for the purpose of this section shall be allocated by the superintendent of public instruction to eligible school districts during the same calendar year corresponding excess levies are collected. One-half of the amount for each district shall be allocated in April and the balance shall be allocated in October.

(4) Funds distributed to eligible school districts under this section shall be deposited in each district's general fund and shall be expended for maintenance and operation purposes consistent with RCW 84.52.0531 and the authorized purpose or purposes of the excess levy matched by such funds.

(5) The superintendent of public instruction shall adopt rules under chapter 34.04 RCW necessary to implement this section, including rules establishing the data and dates for fixing the calculations necessary to implement this section.

Sec. 2. Section 1, chapter 374, Laws of 1985 and RCW 84.52.0531 are each amended to read as follows:

The maximum dollar amount which may be levied by or for any school district for maintenance and operation support under the provisions of RCW 84.52.053 shall be as follows:

(1) For excess levies ((~~in 1985~~)) authorized in either 1986 or 1987 for collection in ((~~1986~~)) 1988 and thereafter, the sum of:

(a) That amount equal to ((~~ten~~)) twenty percent of each school district's prior year basic education allocation; plus

(b) That amount equal to ((~~ten~~)) twenty percent of each school district's prior year state allocation, exclusive of federal funds, for the following programs:

(i) Pupil transportation;

(ii) Handicapped education costs;

(iii) Gifted; and

(iv) Compensatory education, including but not limited to remediation assistance((,)) and bilingual education((~~, and urban, rural, racial disadvantaged programs~~)); plus

(c) In the case of nonhigh school districts only, an amount equal to the total estimated amount due by the nonhigh school district to high school districts pursuant to chapter 28A.44 RCW, as now or hereafter amended, for the school year during which collection of the levy is to commence, less the increase in the nonhigh school district's basic education allocation as computed pursuant to subsection (4) of this section due to the inclusion of pupils participating in a program provided for in chapter 28A.44 RCW in such computation.

(2) Excess levies authorized under this section or under RCW 84.52.052 shall not be used directly or indirectly to increase the average salary or fringe benefits for certificated or classified personnel in any school district: PROVIDED, That any school district may expend excess levy funds to provide increases in salary and fringe benefits for classified or certificated personnel whose salary and fringe benefits are provided wholly from local school district excess levies in a percentage not to exceed the respective average percentage increases in the salary and fringe benefit levels for classified and certificated employees of the district funded with state appropriated funds: PROVIDED FURTHER, That those contracts which have been negotiated prior to July 1, 1977 by those school districts for such school year shall not be abrogated by this section. "Fringe benefits" for purposes of this subsection shall include:

(a) Employer retirement contributions, if applicable;

(b) Health and insurance payments including life, accident, disability, unemployment compensation, and workmen's compensation; and

(3) Any school district whose average base compensation for certificated or classified personnel respectively is below state-wide average base compensation level for certificated or classified personnel during the preceding school year, may collect and expend property taxes authorized by this section, or under RCW 84.52.052, for the purpose of increasing such district's average compensation for certificated or classified personnel as allowed in the latest applicable state operating budget. "Compensation", for purposes of this subsection, shall mean salary plus fringe benefits for classified and certificated personnel of a school district as allowed in the latest applicable state operating budget.

(4) For the purpose of this section, the basic education allocation shall be determined pursuant to RCW 28A.41.130, 28A.41.140, and 28A.41.145, as now or hereafter amended: PROVIDED, That when determining the basic education allocation under subsection (1) of this section, effective September 1, 1979, nonresident full time equivalent pupils who are participating in a program provided for in chapter 28A.44 RCW or in any other program pursuant to an interdistrict agreement shall be included in the enrollment of the resident district and excluded from the enrollment of the serving district.

Certificated personnel shall include those persons employed by a school district in a teaching, instructional, administrative or supervisory capacity and who hold positions as certificated personnel as defined under RCW 28A.01.130, as now or hereafter amended, and every school district superintendent, and any person hired in any manner to fill a position designated as, or which is in fact, that of deputy superintendent or assistant superintendent. Classified personnel shall include those persons employed by a school district other than certificated personnel as defined in this section in a capacity for which certification is not required.

(5) Any district is authorized to exceed the levy limitations imposed by subsection (1) for taxes to be collected during calendar years 1985 through ((~~1993~~)) 1992 as follows:

(a) For excess levies to be collected in calendar years 1986, 1987, and 1988, a base year levy percentage shall be established. The base year levy percentage shall be equal to the greater of: (i) The district's actual levy percentage for calendar year 1985, (ii) the average levy percentage for all school district levies in the state in calendar year 1985, or (iii) the average levy percentage for all school district levies in the educational service district of the district in calendar year 1985.

(b) The base year levy percentage established in (a) of this subsection shall be reduced in even increments beginning in calendar year 1989. The incremental reduction shall equal ((~~one-fifth~~)) one-fourth of the percentage points the base year levy percentage exceeds the amount authorized in subsection (1) of this section.

(c) For excess levies to be collected in calendar year ((~~1993~~)) 1992, the maximum dollar amount which may be levied by or for any school district shall not exceed the amount authorized in subsection (1) of this section. The provisions of this subsection shall not apply to excess levies to be collected after calendar year ((~~1993~~)) 1992.

(6) Notwithstanding any other provisions of this section to the contrary, for excess levies for collection in 1989 and thereafter, the maximum dollar amount that could otherwise be levied by a school district under the provisions of this section shall be reduced by an amount equal to the maximum amount of matching moneys the school district could receive under section 1 of this 1987 act.

(7) The superintendent of public instruction shall develop rules and regulations and inform school districts of the pertinent data necessary to carry out the provisions of this section.

NEW SECTION. Sec. 3. 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.