AN ACT Relating to school district funding; amending RCW 84.52.0531; adding new sections to chapter 84.52 RCW; adding a new section to chapter 84.55 RCW; and providing a contingent effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 84.52 RCW to read as follows:

(1) A school district may levy an annual regular ad valorem property tax equal to a maximum of ten percent of the district's levy base as defined in RCW 84.52.0531(4) for excess levies for collection in that calendar year.

(2) A school district may:

(a) Limit the period for which the levy under this section is to be made;

(b) Limit the purpose for which the levy under this section is to be made;

(d) Include any combination of the conditions in this subsection.

(3) No levy may be imposed by a school district under this section unless the first levy by the school district under this section is specifically authorized by a majority of at least three-fifths of the electors thereof voting on the proposition to levy such additional tax submitted not more than twelve months prior to the date on which the proposed levy is to be made and not oftener than twice in such twelve-month period, either at a special election or at the regular election of such taxing district, at which election the number of persons voting "yes" on the proposition shall constitute three-fifths of a number equal to forty percentum of the total votes cast in such taxing district at the last preceding general election when the number of electors voting on the proposition does not exceed forty percentum of the total votes cast in such taxing district in the last preceding general election; or by a majority of at least three-fifths of the electors thereof voting on the proposition to levy when the number of electors voting on the proposition exceeds forty percentum of the total votes cast in such taxing district in the last preceding general election.

(4) A levy under this section is in addition to the levies under RCW 84.52.043.

NEW SECTION. Sec. 2. A new section is added to chapter 84.52 RCW to read as follows:

Any levy imposed by a school district under section 1 of this act shall be subject to repeal or a reduction in rate by a referendum petition. Any referendum petition to repeal or reduce a school district annual regular ad valorem property tax equal to a maximum of ten percent of the district's levy base as authorized in section 1 of this act shall be filed with the county auditor at any time after two years from the passage of the levy. However, no levy authorized under section 1 of this act shall be subject to referendum more than once in a twenty-four month period. Within ten days, the auditor shall confer with the petitioner concerning form and style of the petition, issue an identification number for the petition, and write a ballot title for the measure. The ballot title shall be posed as a question so that an affirmative answer to the question and an affirmative vote on the measure results in the tax or tax rate increase being imposed and a negative answer to the question and a negative vote on the measure results in the tax or tax rate increase not being imposed. The petitioner shall be notified of the identification number and ballot title within this ten-day period.

After this notification, the petitioner shall have thirty days in which to secure on petition forms the signatures of not less than fifteen percent of the registered voters in the school district and to file the signed petitions with the county auditor. Each petition form shall contain the ballot title and full text of the measure to be referred. The county auditor shall verify the sufficiency of the signature on the petitions. If sufficient valid signatures are properly submitted, the county auditor shall submit the referendum measure to the school district voters at a general or special election held on one of the dates provided in RCW 29.13.010 as determined by the school district board of directors, which election shall not take place later than one hundred twenty days after the signed petition has been filed with the county auditor. The referendum procedure provided in this section shall be the exclusive method for subjecting any school district levy or levy rate authorized in section 1 of this act to a referendum vote.

Sec. 3. Section 1, chapter 374, Laws of 1985 as last amended by section 1, chapter 252, Laws of 1988 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 determined as follows:

(1) 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 (4) of this section, 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.

(2) For the purposes of subsection (5) of this section, a base year levy percentage shall be established. The base year levy percentage shall be equal to the greater of: (a) The district's actual levy percentage for calendar year 1985, (b) the average levy percentage for all school district levies in the state in calendar year 1985, or (c) the average levy percentage for all school district levies in the educational service district of the district in calendar year 1985.

(3) For excess levies for collection in calendar year 1988 and thereafter, the maximum dollar amount shall be the total of:

(a) The district's levy base as defined in subsection (4) of this section multiplied by the district's maximum levy percentage as defined in subsections (5) and (6) of this section; plus

(b) In the case of nonhigh ((~~[school]~~)) 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 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 (1) of this section due to the inclusion of pupils participating in a program provided for in chapter 28A.44 RCW in such computation; less

(c) The maximum amount of state matching funds under RCW 28A.41.155 for which the district is eligible in that tax collection year and the amount of any levy under section 1 of this act.

(4) For excess levies for collection in calendar year 1988 and thereafter, a district's levy base shall be the sum of the following allocations received by the district for the prior school year, including allocations for compensation increases, adjusted by the percent increase per full time equivalent student in the state basic education appropriation between the prior school year and the current school year:

(a) The district's basic education allocation as determined pursuant to RCW 28A.41.130, 28A.41.140, and 28A.41.145;

(b) State and federal categorical allocations for the following programs:

(i) Pupil transportation;

(ii) Handicapped education;

(iii) Education of highly capable students;

(iv) Compensatory education, including but not limited to learning assistance, migrant education, Indian education, refugee programs, and bilingual education;

(v) Food services; and

(vi) State-wide block grant programs; and

(c) Any other federal allocations for elementary and secondary school programs, including direct grants, other than federal impact aid funds and allocations in lieu of taxes.

(5) For levies to be collected in calendar year 1988, a district's maximum levy percentage shall be determined as follows:

(a) Multiply the district's base year levy percentage as defined in subsection (2) of this section by the district's levy base as determined in subsection (4) of this section;

(b) Reduce the amount in (a) of this subsection by the total estimated amount of any levy reduction funds as defined in subsection (7) of this section which are to be allocated to the district for the 1987-88 school year;

(d) The percentage in (c) of this subsection or twenty percent, whichever is greater, shall be the district's maximum levy percentage for levies collected in calendar year 1988.

(6) For excess levies for collection in calendar year 1989 and thereafter, a district's maximum levy percentage shall be determined as follows:

(a) Multiply the district's maximum levy percentage for the prior year or thirty percent, whichever is less, by the district's levy base as determined in subsection (4) of this section;

(d) The percentage in (c) of this subsection or twenty percent, whichever is greater, shall be the district's maximum levy percentage for levies collected in that calendar year.

(7) "Levy reduction funds" shall mean enhancements in state funding formulas for programs included under subsection (4) of this section, as specified in this subsection. In the case of levies for collection in 1989 and thereafter, for each such program, levy reduction funds shall be the difference between:

(a) The district's state allocation for such program for the current school year calculated using the formula for distributing state funds for the program in the current school year; and

(b) The state allocation for such program that the district would receive for the program in the current school year if the formula used for distributing state funds for the program in the prior year were adopted in computing such allocation.

In all calculations under this subsection, formula factors shall be adjusted to reflect the salary levels and benefit rates to be used for state funding in the current school year and the allocations for nonemployee-related costs shall reflect adjustments for cost inflation from the prior school year as recognized in the current school year funding formula. If levy reduction funds are dependent on formula factors which would not be finalized until after the start of the current school year, the superintendent of public instruction shall estimate the total amount of levy reduction funds by using prior school year data in place of current school year data.

In the case of levies for collection in calendar year 1988, levy reduction funds are those funds defined as levy reduction funds under the rules adopted by the superintendent of public instruction as of March 1, 1988, and do not include state allocations of local education program enhancement funds.

(8) For the purposes of this section, "prior school year" shall mean the most recent school year completed prior to the year in which the levies are to be collected.

(9) For the purposes of this section, "current school year" shall mean the year immediately following the prior school year.

(10) 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. 4. A new section is added to chapter 84.55 RCW to read as follows:

This chapter does not apply to the levy under section 1 of this act.

NEW SECTION. Sec. 5. This act shall take effect January 1, 1990, if the proposed amendment to Article VII, section 2 of the state Constitution authorizing an additional property tax for school districts (HJR --) is validly submitted to and is approved and ratified by the voters at a general election held in November 1989. If the proposed amendment is not so approved and ratified, this act shall be null and void in its entirety.

This act shall be effective for taxes levied for collection in 1990 and thereafter.