AN ACT Relating to school district levies; amending RCW 84.52.0531; creating a new section; and repealing RCW 28A.320.150.

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

NEW SECTION. Sec. 1. The house of representatives and senate fiscal committees shall study data and issues relevant to the state funded local effort assistance program known as "levy equalization" and prepare a report of findings and recommendations to the legislature by December 1, 1997. To the maximum extent possible, the education community shall be included in discussions concerning the study in this section.

Sec. 2. RCW 84.52.0531 and 1995 1st sp.s. c 11 s 1 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 excess levies for collection in calendar year ((~~1992~~)) 1997, the maximum dollar amount shall be calculated pursuant to the laws and rules in effect in November ((~~1991~~)) 1996.

(2) ((For the purpose of this section, the basic education allocation shall be determined pursuant to RCW 28A.150.250, 28A.150.260, and 28A.150.350: 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.545 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.

~~(3)~~)) For excess levies for collection in calendar year ((~~1993~~)) 1998 and thereafter, the maximum dollar amount shall be the sum of (a) ((~~and~~)) plus or minus (b) and (c) of this subsection minus ((~~(c)~~)) (d) of this subsection:

(a) The district's levy base as defined in subsection ((~~(4)~~)) (3) of this section multiplied by the district's maximum levy percentage as defined in subsection ((~~(5)~~)) (4) of this section;

(b) ((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.545 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.545 RCW in such computation)) For districts in a high/nonhigh relationship, the high school district's maximum levy amount shall be reduced and the nonhigh school district's maximum levy amount shall be increased by an amount equal to the estimated amount of the nonhigh payment due to the high school district under RCW 28A.545.030(3) and 28A.545.050 for the school year commencing the year of the levy;

(c) For districts in an interdistrict cooperative agreement, the nonresident school district's maximum levy amount shall be reduced and the resident school district's maximum levy amount shall be increased by an amount equal to the per pupil basic education allocation included in the nonresident district's levy base under subsection (3) of this section multiplied by:

(i) The number of full-time equivalent students served from the resident district in the prior school year; multiplied by:

(ii) The serving district's maximum levy percentage determined under subsection (4) of this section; multiplied by:

(iii) The percent increase per full-time equivalent student as stated in the state basic education appropriation section of the biennial budget between the prior school year and the current school year divided by fifty-five percent;

(d) The district's maximum levy amount shall be reduced by the maximum amount of state matching funds for which the district is eligible under RCW 28A.500.010 ((~~for which the district is eligible in that tax collection year~~)).

((~~(4)~~)) (3) For excess levies for collection in calendar year ((~~1993~~)) 1998 and thereafter, a district's levy base shall be the sum of allocations in (a) through (c) of this subsection received by the district for the prior school year, including allocations for compensation increases, plus the sum of such allocations multiplied by the percent increase per full time equivalent student as stated in the state basic education appropriation section of the biennial budget between the prior school year and the current school year and divided by fifty-five percent. A district's levy base shall not include local school district property tax levies or other local revenues, or state and federal allocations not identified in (a) through (c) of this subsection.

(a) The district's basic education allocation as determined pursuant to RCW 28A.150.250, 28A.150.260, and 28A.150.350;

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

(i) Pupil transportation;

(ii) ((~~Handicapped~~)) Special 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 excess levies for collection in calendar year 1993 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 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 (6) of this section which are to be allocated to the district for the current school year;

~~(c) Divide the amount in (b) of this subsection by the district's levy base to compute a new percentage;~~

~~(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; and~~

(e) For levies to be collected in calendar years 1994 through 1997, the maximum levy rate shall be the district's maximum levy percentage for 1993 plus four percent reduced by any levy reduction funds.

~~For levies collected in 1998, the prior year shall mean 1993.~~

~~(6)~~)) (4) A district's maximum levy percentage shall be twenty-two percent in 1998 and twenty-four percent in 1999 and every year thereafter; plus, for qualifying districts, the grandfathered percentage determined as follows:

(a) For 1997, the difference between the district's 1993 maximum levy percentage and twenty percent; and

(b) For 1998 and thereafter, the percentage calculated as follows:

(i) Multiply the grandfathered percentage for the prior year times the district's levy base determined under subsection (3) of this section;

(ii) Reduce the result of (b)(i) of this subsection by any levy reduction funds as defined in subsection (5) of this section that are to be allocated to the district for the current school year;

(iii) Divide the result of (b)(ii) of this subsection by the district's levy base; and

(iv) Take the greater of zero or the percentage calculated in (b)(iii) of this subsection.

(5) "Levy reduction funds" shall mean increases in state funds from the prior school year for programs included under subsection ((~~(4)~~)) (3) of this section: (a) That are not attributable to enrollment changes, compensation increases, or inflationary adjustments; and (b) that are or were specifically identified as levy reduction funds in the appropriations act. 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. Levy reduction funds shall not include moneys received by school districts from cities or counties.

((~~(7)~~)) (6) For the purposes of this section, "prior school year" ((~~shall~~)) means the most recent school year completed prior to the year in which the levies are to be collected.

((~~(8)~~)) (7) For the purposes of this section, "current school year" ((~~shall~~)) means the year immediately following the prior school year.

((~~(9)~~)) (8) Funds collected from transportation vehicle fund tax levies shall not be subject to the levy limitations in this section.

((~~(10)~~)) (9) 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. RCW 28A.320.150 and 1995 1st sp.s. c 11 s 2 are each repealed.