BILL REQ. #:  S-4687.3 

Read first time 02/26/14.   Referred to Committee on Early Learning & K-12 Education.

     AN ACT Relating to improving education financing; amending RCW 28A.150.260, 28A.150.315, 28A.150.220, 28A.150.390, 28A.150.410, 28A.400.200, 28A.400.205, 84.52.0531, 28A.400.205, 28B.50.465, 28B.50.468, 28A.405.415, 82.08.0293, 82.12.0293, 82.12.0263, 82.08.0273, 82.04.280, and 82.04.280; amending 2013 2nd sp.s. c 4 s 502 (uncodified); reenacting and amending RCW 84.52.0531 and 82.32.790; adding new sections to chapter 28A.150 RCW; adding a new section to chapter 28A.300 RCW; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; adding a new section to chapter 82.32 RCW; adding a new section to chapter 43.135 RCW; creating new sections; repealing RCW 82.04.272; making appropriations; providing effective dates; providing a contingent effective date; providing expiration dates; providing a contingent expiration date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   It is the intent of the legislature to provide a beginning proposal for an expenditure plan as required by the Washington state supreme court's order dated January 9, 2014.
     The legislature recognizes that Substitute House Bill No. 2776, chapter 236, Laws of 2010, was part one of a phase-in plan for meeting the state's constitutional obligations. That legislation established four initial funding priorities within the program of basic education as defined in Engrossed Substitute House Bill No. 2261, chapter 548, Laws of 2009, and provided the final 2018 enhanced values for those priorities. The legislature intends to establish part two of the phase-in plan by requiring a linear funding expectation for fully phasing-in the final values of the Substitute House Bill No. 2776 priorities while also establishing final enhanced values for a second set of priorities and also requiring a linear funding phase-in of those enhancements. The legislature intends to focus these second priorities on those portions of the prototypical school formula that will assist schools in implementing the opportunity to earn twenty-four credits for high school graduation. In recognition of the court's statement that it is "deeply troubling" that the state has not offered any plan for meeting its compensation obligations, phase two also includes a phase-in plan for compensation. The legislature acknowledges that future legislatures may consider alternative schedules and plans to reflect different legislative priorities and new emerging research.

Sec. 101   RCW 28A.150.260 and 2011 1st sp.s. c 27 s 2 are each amended to read as follows:
     The purpose of this section is to provide for the allocation of state funding that the legislature deems necessary to support school districts in offering the minimum instructional program of basic education under RCW 28A.150.220. The allocation shall be determined as follows:
     (1) The governor shall and the superintendent of public instruction may recommend to the legislature a formula for the distribution of a basic education instructional allocation for each common school district.
     (2) The distribution formula under this section shall be for allocation purposes only. Except as may be required under chapter 28A.155, 28A.165, 28A.180, or 28A.185 RCW, or federal laws and regulations, nothing in this section requires school districts to use basic education instructional funds to implement a particular instructional approach or service. Nothing in this section requires school districts to maintain a particular classroom teacher-to-student ratio or other staff-to-student ratio or to use allocated funds to pay for particular types or classifications of staff. Nothing in this section entitles an individual teacher to a particular teacher planning period.
     (3)(a) To the extent the technical details of the formula have been adopted by the legislature and except when specifically provided as a school district allocation, the distribution formula for the basic education instructional allocation shall be based on minimum staffing and nonstaff costs the legislature deems necessary to support instruction and operations in prototypical schools serving high, middle, and elementary school students as provided in this section. The use of prototypical schools for the distribution formula does not constitute legislative intent that schools should be operated or structured in a similar fashion as the prototypes. Prototypical schools illustrate the level of resources needed to operate a school of a particular size with particular types and grade levels of students using commonly understood terms and inputs, such as class size, hours of instruction, and various categories of school staff. It is the intent that the funding allocations to school districts be adjusted from the school prototypes based on the actual number of annual average full-time equivalent students in each grade level at each school in the district and not based on the grade-level configuration of the school to the extent that data is available. The allocations shall be further adjusted from the school prototypes with minimum allocations for small schools and to reflect other factors identified in the omnibus appropriations act.
     (b) For the purposes of this section, prototypical schools are defined as follows:
     (i) A prototypical high school has six hundred average annual full-time equivalent students in grades nine through twelve;
     (ii) A prototypical middle school has four hundred thirty-two average annual full-time equivalent students in grades seven and eight; and
     (iii) A prototypical elementary school has four hundred average annual full-time equivalent students in grades kindergarten through six.
     (4)(a)(i) The minimum allocation for each level of prototypical school shall be based on the number of full-time equivalent classroom teachers needed to provide instruction over the minimum required annual instructional hours under RCW 28A.150.220 and provide at least one teacher planning period per school day, and based on the following general education average class size of full-time equivalent students per teacher:

       General education
       average
       class size
Grades K-3 . . . . . . . . . . . . 25.23
Grade 4 . . . . . . . . . . . . 27.00
Grades 5-6 . . . . . . . . . . . . 27.00
Grades 7-8 . . . . . . . . . . . . 28.53
Grades 9-12 . . . . . . . . . . . . 28.74

     (ii) Beginning in the 2015-2017 biennium, to assist school districts to provide students the opportunity to complete twenty-four credits for high school graduation, the minimum allocation for the general education average class in grades nine through twelve shall be enhanced in a linear fashion to provide sufficient state funding to reduce class size to twenty-three full-time equivalent students per teacher in the 2017-18 school year.
     (b) To assist school districts to provide students the opportunity to complete twenty-four credits for high school graduation, the minimum allocation for high school laboratory class size shall be enhanced to provide sufficient state funding as provided in this subsection (4)(b).
     (i) The minimum class size allocation for each prototypical high school shall be enhanced to provide funding for two laboratory science courses per full-time equivalent student to be completed within grades nine through twelve, calculated as follows: The number of total full-time equivalent students enrolled in grades nine through twelve multiplied by the laboratory science course factor of 0.0833, by the number of full-time equivalent classroom teachers needed to provide instruction over the minimum required annual instructional hours under RCW 28A.150.220, providing at least one teacher planning period per school day, and based on the laboratory science average class size of 19.98 full-time equivalent students per teacher.

       Laboratory science
       average class size
       enhancement
Grades 9-12 . . . . . . . . . . . . 19.98

     (((b) During)) (ii) Beginning in the 2015-2017 biennium, the laboratory science average class size shall be enhanced in a linear fashion in order to provide sufficient state funding to achieve an average class size of no more than nineteen full-time equivalent students per teacher in the 2017-18 school year.
     (c) Beginning with the ((2011-2013)) 2015-2017 biennium and beginning with schools with the highest percentage of students eligible for free and reduced-price meals in the prior school year, sufficient state funding must be provided to reduce the general education average class size for grades K-3 ((shall be reduced until the)) in a linear fashion each biennium in order to achieve an average class size funded under this subsection (4) ((is)) of no more than 17.0 full-time equivalent students per teacher ((beginning in)) by the 2017-18 school year.
     (((c))) (d)(i) The minimum allocation for each prototypical middle and high school shall also provide for full-time equivalent classroom teachers based on the following number of full-time equivalent students per teacher in career and technical education:

       Career and technical
       education average
       class size
Approved career and technical education offered at
the middle school and high school level . . . . . . . . . . . . 26.57
Skill center programs meeting the standards established
by the office of the superintendent of public
instruction . . . . . . . . . . . . 22.76

     (((d))) (ii) Beginning in the 2015-2017 biennium, to assist school districts to provide students the opportunity to complete twenty-four credits for high school graduation, the minimum allocation for high schools shall be enhanced in a linear fashion to provide sufficient state funding for full-time equivalent classroom teachers based on the following number of full-time equivalent students per teacher in career and technical education in the 2017-18 school year:
       Career and technical
       education average
       class size
Approved career and technical education . . . . . . . . . . . . 19.0
Skill center programs meeting the standards established
by the office of the superintendent of public instruction . . . . . . . . . . . . 16.0
     (e) In addition, the omnibus appropriations act shall at a minimum specify:
     (i) A high-poverty average class size in schools where more than fifty percent of the students are eligible for free and reduced-price meals; and
     (ii) A specialty average class size for ((laboratory science,)) advanced placement((,)) and international baccalaureate courses.
     (5)(a) The minimum allocation for each level of prototypical school shall include allocations for the following types of staff in addition to classroom teachers:
     

Sec. 102   RCW 28A.150.315 and 2012 c 51 s 1 are each amended to read as follows:
     (1) Beginning with the 2007-08 school year, funding for voluntary all-day kindergarten programs shall be phased-in beginning with schools with the highest poverty levels, defined as those schools with the highest percentages of students qualifying for free and reduced-price lunch support in the prior school year. ((During)) Beginning with the ((2011-2013)) 2015-2017 biennium, funding enhancements shall ((continue to)) be phased-in ((each year until)) in a linear fashion each biennium in order to provide sufficient state funding to achieve full statewide implementation of all-day kindergarten ((is achieved)) in the 2017-18 school year. Once a school receives funding for the all-day kindergarten program, that school shall remain eligible for funding in subsequent school years regardless of changes in the school's percentage of students eligible for free and reduced-price lunches as long as other program requirements are fulfilled. Additionally, schools receiving all-day kindergarten program support shall agree to the following conditions:
     (a) Provide at least a one thousand-hour instructional program;
     (b) Provide a curriculum that offers a rich, varied set of experiences that assist students in:
     (i) Developing initial skills in the academic areas of reading, mathematics, and writing;
     (ii) Developing a variety of communication skills;
     (iii) Providing experiences in science, social studies, arts, health and physical education, and a world language other than English;
     (iv) Acquiring large and small motor skills;
     (v) Acquiring social and emotional skills including successful participation in learning activities as an individual and as part of a group; and
     (vi) Learning through hands-on experiences;
     (c) Establish learning environments that are developmentally appropriate and promote creativity;
     (d) Demonstrate strong connections and communication with early learning community providers; and
     (e) Participate in kindergarten program readiness activities with early learning providers and parents.
     (2)(a) It is the intent of the legislature that administration of the Washington kindergarten inventory of developing skills as required in this subsection (2) and RCW 28A.655.080 replace administration of other assessments being required by school districts or that other assessments only be administered if they seek to obtain information not covered by the Washington kindergarten inventory of developing skills.
     (b) In addition to the requirements in subsection (1) of this section and to the extent funds are available, beginning with the 2011-12 school year on a voluntary basis, schools must identify the skills, knowledge, and characteristics of kindergarten students at the beginning of the school year in order to support social-emotional, physical, and cognitive growth and development of individual children; support early learning provider and parent involvement; and inform instruction. Kindergarten teachers shall administer the Washington kindergarten inventory of developing skills, as directed by the superintendent of public instruction in consultation with the department of early learning and in collaboration with the nongovernmental private-public partnership designated in RCW 43.215.070, and report the results to the superintendent. The superintendent shall share the results with the director of the department of early learning.
     (c) School districts shall provide an opportunity for parents and guardians to excuse their children from participation in the Washington kindergarten inventory of developing skills.
     (3) Subject to funds appropriated for this purpose, the superintendent of public instruction shall designate one or more school districts to serve as resources and examples of best practices in designing and operating a high-quality all-day kindergarten program. Designated school districts shall serve as lighthouse programs and provide technical assistance to other school districts in the initial stages of implementing an all-day kindergarten program. Examples of topics addressed by the technical assistance include strategic planning, developing the instructional program and curriculum, working with early learning providers to identify students and communicate with parents, and developing kindergarten program readiness activities.

Sec. 103   RCW 28A.150.220 and 2013 2nd sp.s. c 9 s 2 are each amended to read as follows:
     (1) In order for students to have the opportunity to develop the basic education knowledge and skills under RCW 28A.150.210, school districts must provide instruction of sufficient quantity and quality and give students the opportunity to complete graduation requirements that are intended to prepare them for postsecondary education, gainful employment, and citizenship. The program established under this section shall be the minimum instructional program of basic education offered by school districts.
     (2) Each school district shall make available to students the following minimum instructional offering each school year:
     (a) For students enrolled in grades one through twelve, at least a district-wide annual average of one thousand hours, which shall be increased beginning in the 2015-16 school year to at least one thousand eighty instructional hours for students enrolled in ((each of)) grades ((seven)) nine through twelve and at least one thousand instructional hours for students in ((each of)) grades one through ((six according to an implementation schedule adopted by the legislature, but not before the 2014-15 school year)) eight, all of which may be calculated by a school district using a district-wide annual average of instructional hours over grades one through twelve. The increase in instructional hours for students enrolled in grades nine through twelve is intended to assist school districts to provide students the opportunity to complete twenty-four credits for high school graduation; and
     (b) For students enrolled in kindergarten, at least four hundred fifty instructional hours, which shall be increased to at least one thousand instructional hours according to the implementation schedule under RCW 28A.150.315.
     (3) The instructional program of basic education provided by each school district shall include:
     (a) Instruction in the essential academic learning requirements under RCW 28A.655.070;
     (b) Instruction that provides students the opportunity to complete twenty-four credits for high school graduation, ((subject to a phased-in implementation of the twenty-four credits as established by the legislature)) beginning with the graduating class of 2019. Course distribution requirements may be established by the state board of education under RCW 28A.230.090;
     (c) If the essential academic learning requirements include a requirement of languages other than English, the requirement may be met by students receiving instruction in one or more American Indian languages;
     (d) Supplemental instruction and services for underachieving students through the learning assistance program under RCW 28A.165.005 through 28A.165.065;
     (e) Supplemental instruction and services for eligible and enrolled students and exited students whose primary language is other than English through the transitional bilingual instruction program under RCW 28A.180.010 through 28A.180.080;
     (f) The opportunity for an appropriate education at public expense as defined by RCW 28A.155.020 for all eligible students with disabilities as defined in RCW 28A.155.020; and
     (g) Programs for highly capable students under RCW 28A.185.010 through 28A.185.030.
     (4) Nothing contained in this section shall be construed to require individual students to attend school for any particular number of hours per day or to take any particular courses.
     (5)(a) Each school district's kindergarten through twelfth grade basic educational program shall be accessible to all students who are five years of age, as provided by RCW 28A.225.160, and less than twenty-one years of age and shall consist of a minimum of one hundred eighty school days per school year in such grades as are conducted by a school district, and one hundred eighty half-days of instruction, or equivalent, in kindergarten, to be increased to a minimum of one hundred eighty school days per school year according to the implementation schedule under RCW 28A.150.315. ((However,))
     (b) Schools administering the Washington kindergarten inventory of developing skills may use up to three school days at the beginning of the school year to meet with parents and families as required in the parent involvement component of the inventory. ((In addition, effective May 1, 1979,))
     (c) In the case of students who are graduating from high school, a school district may schedule the last five school days of the one hundred ((and)) eighty day school year for noninstructional purposes ((in the case of students who are graduating from high school,)) including, but not limited to, the observance of graduation and early release from school upon the request of a student((, and)). All such students may be claimed as a full-time equivalent student to the extent they could otherwise have been so claimed for the purposes of RCW 28A.150.250 and 28A.150.260. Any hours scheduled by a school district for noninstructional purposes during the last five school days for such students shall count toward the instructional hours requirement in subsection (2)(a) of this section.
     (6) Nothing in this section precludes a school district from enriching the instructional program of basic education, such as offering additional instruction or providing additional services, programs, or activities that the school district determines to be appropriate for the education of the school district's students.
     (7) The state board of education shall adopt rules to implement and ensure compliance with the program requirements imposed by this section, RCW 28A.150.250 and 28A.150.260, and such related supplemental program approval requirements as the state board may establish.

Sec. 104   RCW 28A.150.390 and 2010 c 236 s 3 are each amended to read as follows:
     (1) The superintendent of public instruction shall submit to each regular session of the legislature during an odd-numbered year a programmed budget request for special education programs for students with disabilities. Funding for programs operated by local school districts shall be on an excess cost basis from appropriations provided by the legislature for special education programs for students with disabilities and shall take account of state funds accruing through RCW 28A.150.260 (4)(a) ((and)), (b), and (c), (5), (6), and (8).
     (2) The excess cost allocation to school districts shall be based on the following:
     (a) A district's annual average headcount enrollment of students ages birth through four and those five year olds not yet enrolled in kindergarten who are eligible for and enrolled in special education, multiplied by the district's base allocation per full-time equivalent student, multiplied by 1.15; and
     (b) A district's annual average full-time equivalent basic education enrollment, multiplied by the district's funded enrollment percent, multiplied by the district's base allocation per full-time equivalent student, multiplied by 0.9309.
     (3) As used in this section:
     (a) "Base allocation" means the total state allocation to all schools in the district generated by the distribution formula under RCW 28A.150.260 (4)(a) ((and)), (b), and (c), (5), (6), and (8), to be divided by the district's full-time equivalent enrollment.
     (b) "Basic education enrollment" means enrollment of resident students including nonresident students enrolled under RCW 28A.225.225 and students from nonhigh districts enrolled under RCW 28A.225.210 and excluding students residing in another district enrolled as part of an interdistrict cooperative program under RCW 28A.225.250.
     (c) "Enrollment percent" means the district's resident special education annual average enrollment, excluding students ages birth through four and those five year olds not yet enrolled in kindergarten, as a percent of the district's annual average full-time equivalent basic education enrollment.
     (d) "Funded enrollment percent" means the lesser of the district's actual enrollment percent or twelve and seven-tenths percent.

NEW SECTION.  Sec. 105   A new section is added to chapter 28A.150 RCW to read as follows:
     (1)(a) In order to eliminate grandfathered salary allocations, which means a state salary allocation rate for classified or certificated administrative staff provided to a school district that exceeds the standard salary allocation, beginning in the 2015-2017 biennium, the legislature shall provide sufficient funds for whichever is greater:
     (i) The certificated administrative and classified salary allocation amounts shown on LEAP Document 2 for the 2015-16 school year; or
     (ii) The average state salary allocation amounts for basic education state-funded certificated administrative staff and classified staff units per full-time equivalent as follows:


Certificated administrative staff . . . . . . . . . . . . $99,765
Classified staff . . . . . . . . . . . . $43,153


     (b) The minimum allocations provided in (a) of this subsection shall be enhanced in a linear fashion to provide sufficient state funds for the average state salary allocations for basic education state-funded certificated administrative staff and classified staff units per full-time equivalent in the 2019-20 school year as follows:


Certificated administrative staff . . . . . . . . . . . . $105,158
Classified staff . . . . . . . . . . . . $45,486


     (2) The allocations established in subsection (1) of this section shall be adjusted for Initiative Measure No. 732 cost-of-living increases as provided in the omnibus appropriations act.
     (3) This section expires August 1, 2021.

Sec. 106   RCW 28A.150.410 and 2010 c 236 s 10 are each amended to read as follows:
     (1) The legislature shall establish for each school year in the appropriations act a statewide salary allocation schedule, for allocation purposes only((, to be)) and used to distribute funds for basic education certificated instructional staff salaries under RCW 28A.150.260. For the purposes of this section, the staff allocations for classroom teachers, teacher librarians, guidance counselors, and student health services staff under RCW 28A.150.260 are considered allocations for certificated instructional staff.
     (2) Salary allocations for state-funded basic education certificated instructional staff shall be calculated by the superintendent of public instruction by determining the district's average salary for certificated instructional staff, using the statewide salary allocation schedule and related documents, conditions, and limitations established by the omnibus appropriations act.
     (3) Beginning January 1, 1992, no more than ninety college quarter-hour credits received by any employee after the baccalaureate degree may be used to determine compensation allocations under the state salary allocation schedule and LEAP documents referenced in the omnibus appropriations act, or any replacement schedules and documents, unless:
     (a) The employee has a master's degree; or
     (b) The credits were used in generating state salary allocations before January 1, 1992.
     (4) For the 2015-16 school year through the 2019-20 school year, a revised statewide salary allocation schedule as provided in section 107 of this act shall be phased-in for certificated instructional staff.
     (5)(a) Beginning in the 2020-21 school year and thereafter, the state must provide sufficient funding for a beginning certificated instructional staff with an entry-level residency certificate to remain on a residency certificate for up to nine years at the same salary allocation, although there are different levels of salary allocations for residency certificate holders who have a bachelor's degree and those who have an advanced degree. Allocations based on an advanced degree must be only for those degrees that are relevant to current or future assignments as locally determined by the relevant school district.
     (b) The school year after a certificated instructional staff obtains a professional certificate, the state must provide sufficient funding to provide a salary increase. A minimum of three years of experience is required to make the progression from the residency certification to the professional certification.
     (c) The state must provide sufficient funding to provide an additional salary increase for a certificated instructional staff after nine years of experience with retention of the professional/continuing certificate.
     (d) In the 2020-21 school year, the state minimum salary allocation shall be as follows:

NEW SECTION.  Sec. 107   A new section is added to chapter 28A.150 RCW to read as follows:
     (1)(a) In the 2015-16 school year, except for certificated instructional staff who do not receive a salary increase under the following state salary allocation schedule, the minimum state salary allocation shall be as follows:

NEW SECTION.  Sec. 108   A new section is added to chapter 28A.300 RCW to read as follows:
     (1) The legislature intends to ensure that K-12 state salary allocations keep pace with the wages of comparable occupations by requiring a comparable wage analysis be conducted every four years.
     (2) By July 1, 2018, and every four years thereafter, the superintendent of public instruction shall conduct or contract for a comparative labor market analysis of the salaries and other compensation for school district employees. The first analysis, including any recommendations for salary adjustments based on the analysis, must be submitted to the governor and the legislature by July 1, 2019. Subsequent reports shall be submitted by July 1st every four years thereafter.

Sec. 109   RCW 28A.400.200 and 2010 c 235 s 401 are each amended to read as follows:
     (1) The legislature finds that the state is responsible for fully funding salaries of staff performing basic education activities. The legislature further finds that the compensation technical working group created in Engrossed Substitute House Bill No. 2261 (chapter 548, Laws of 2009) in its June 30, 2012, final report affirmed that average comparable wages are sufficient to recruit and retain high quality staff. However, the legislature further finds that the compensation technical working group recommended that districts be allowed to provide locally funded salary enhancements for nonbasic education functions. The legislature intends to implement the recommendation of the working group and authorize school districts to use local funds to provide salary enhancements for nonbasic education functions. The legislature further intends to ensure equity around the state by limiting the locally funded enhancements to ten percent above the state allocation to the district once the state is fully funding basic education salaries at comparable wages in the 2019-20 school year.
     (2) Every school district board of directors shall fix, alter, allow, and order paid salaries and compensation for all district employees in conformance with this section.
     (((2))) (3)(a) Salaries for certificated instructional staff shall not be less than the salary provided in the appropriations act in the statewide salary allocation schedule for an employee with a baccalaureate degree and zero years of service((; and)).
     (b) Salaries for certificated instructional staff with a master's degree shall not be less than the salary provided in the appropriations act in the statewide salary allocation schedule for an employee with a master's degree and zero years of service.
     (((3)(a) The actual average salary paid to certificated instructional staff shall not exceed the district's average certificated instructional staff salary used for the state basic education allocations for that school year as determined pursuant to RCW 28A.150.410.
     (b))) (c) Fringe benefit contributions for certificated instructional staff shall be included as salary ((under (a) of this subsection)) only to the extent that the district's actual average benefit contribution exceeds the amount of the insurance benefits allocation provided per certificated instructional staff unit in the state operating appropriations act in effect at the time the compensation is payable. For purposes of this section, fringe benefits shall not include payment for unused leave for illness or injury under RCW 28A.400.210; employer contributions for old age survivors insurance, workers' compensation, unemployment compensation, and retirement benefits under the Washington state retirement system; or employer contributions for health benefits in excess of the insurance benefits allocation provided per certificated instructional staff unit in the state operating appropriations act in effect at the time the compensation is payable. A school district may not use state funds to provide employer contributions for such excess health benefits.
     (((c))) (4)(a) Except as provided in (b) of this subsection, school districts are authorized to use local funds for salaries of certificated instructional staff up to but not exceeding ten percent of the state allocation to the district. The use of the local funds will be defined at the school district level and will provide for locally funded salary enhancements for nonbasic education functions.
     (b) As the state phases-in a revised state salary allocation schedule in section 107 of this act, for the school years 2015-16 through 2019-20, school districts are authorized to provide ten percent of the amount that the school district would receive under the 2020-21 school year state salary allocation schedule contained in RCW 28A.150.410.
     (c) The use of local funds for salary enhancements under this section:
     (i) Shall not cause the state to incur any present or future funding obligation; and
     (ii) Is subject to the collective bargaining provisions of chapter 41.59 RCW and the provisions of RCW 28A.405.240, shall not exceed one year, and, if not renewed, shall not constitute adverse change in accordance with RCW 28A.405.300 through 28A.405.380.
     (d) No district may use local funds under the authorization of this subsection (4) for the provision of services that are a part of the basic education program required by Article IX, section 3 of the state Constitution.
     (5) Salary and benefits for certificated instructional staff in programs other than basic education shall be consistent with the salary and benefits paid to certificated instructional staff in the basic education program.
     (((4) Salaries and benefits for certificated instructional staff may exceed the limitations in subsection (3) of this section only by separate contract for additional time, for additional responsibilities, for incentives, or for implementing specific measurable innovative activities, including professional development, specified by the school district to: (a) Close one or more achievement gaps, (b) focus on development of science, technology, engineering, and mathematics (STEM) learning opportunities, or (c) provide arts education. Beginning September 1, 2011, school districts shall annually provide a brief description of the innovative activities included in any supplemental contract to the office of the superintendent of public instruction. The office of the superintendent of public instruction shall summarize the district information and submit an annual report to the education committees of the house of representatives and the senate. Supplemental contracts shall not cause the state to incur any present or future funding obligation. Supplemental contracts shall be subject to the collective bargaining provisions of chapter 41.59 RCW and the provisions of RCW 28A.405.240, shall not exceed one year, and if not renewed shall not constitute adverse change in accordance with RCW 28A.405.300 through 28A.405.380. No district may enter into a supplemental contract under this subsection for the provision of services which are a part of the basic education program required by Article IX, section 3 of the state Constitution.
     (5))) (6) Employee benefit plans offered by any district shall comply with RCW 28A.400.350 ((and)), 28A.400.275, and 28A.400.280.

Sec. 110   RCW 28A.400.205 and 2013 2nd sp.s. c 5 s 1 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, except for the 2013-14 and 2014-15 school years, each school district shall be provided a cost-of-living allocation sufficient to grant this cost-of-living increase, except as provided in subsection (3) of this section.
     (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 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.
     (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.
     (3) As the state phases-in a revised statewide salary allocation schedule, beginning in the 2015-16 school year and through the 2019-20 school year certificated instructional staff who do not receive a salary increase under the revised statewide salary allocation schedules in accordance with RCW 28A.150.410 shall be the only certificated instructional staff who receive a cost-of-living increase under this section.

Sec. 111   RCW 84.52.0531 and 2013 c 242 s 8 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 1997, the maximum dollar amount shall be calculated pursuant to the laws and rules in effect in November 1996.
     (2) For excess levies for collection in calendar year 1998 and thereafter, the maximum dollar amount shall be the sum of (a) plus or minus (b), (c), and (d) of this subsection minus (e) of this subsection:
     (a) The district's levy base as defined in subsections (3) and (4) of this section multiplied by the district's maximum levy percentage as defined in subsection (7) of this section;
     (b) 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) Except for nonhigh districts under (d) of this subsection, 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 (7) of this section; increased 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 levy bases of nonhigh districts participating in an innovation academy cooperative established under RCW 28A.340.080 shall be adjusted by the office of the superintendent of public instruction to reflect each district's proportional share of student enrollment in the cooperative;
     (e) 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.
     (3) For excess levies for collection in calendar year 2005 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 and the amounts determined under subsection (4) of this section, 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) 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) Statewide 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.
     (4) For levy collections in calendar years 2005 through 2017, in addition to the allocations included under subsection (3)(a) through (c) of this section, a district's levy base shall also include the following:
     (a)(i) For levy collections in calendar year 2010, the difference between the allocation the district would have received in the current school year had RCW 84.52.068 not been amended by chapter 19, Laws of 2003 1st sp. sess. and the allocation the district received in the current school year pursuant to RCW 28A.505.220;
     (ii) For levy collections in calendar years 2011 through 2017, the allocation rate the district would have received in the prior school year using the Initiative 728 rate multiplied by the full-time equivalent student enrollment used to calculate the Initiative 728 allocation for the prior school year; and
     (b) The difference between the allocations the district would have received the prior school year using the Initiative 732 base and the allocations the district actually received the prior school year pursuant to RCW 28A.400.205.
     (5) For levy collections in calendar years 2011 through 2017, in addition to the allocations included under subsections (3)(a) through (c) and (4)(a) and (b) of this section, a district's levy base shall also include the difference between an allocation of fifty-three and two-tenths certificated instructional staff units per thousand full-time equivalent students in grades kindergarten through four enrolled in the prior school year and the allocation of certificated instructional staff units per thousand full-time equivalent students in grades kindergarten through four that the district actually received in the prior school year, except that the levy base for a school district whose allocation in the 2009-10 school year was less than fifty-three and two-tenths certificated instructional staff units per thousand full-time equivalent students in grades kindergarten through four shall include the difference between the allocation the district actually received in the 2009-10 school year and the allocation the district actually received in the prior school year.
     (6) For levy collections beginning in calendar year 2014 and thereafter, in addition to the allocations included under subsections (3)(a) through (c), (4)(a) and (b), and (5) of this section, a district's levy base shall also include the funds allocated by the superintendent of public instruction under RCW 28A.715.040 to a school that is the subject of a state-tribal education compact and that formerly contracted with the school district to provide educational services through an interlocal agreement and received funding from the district.
     (7)(a) A district's maximum levy percentage shall be twenty-four percent in 2010 and twenty-eight percent in 2011 through 2017 and twenty-four percent every year thereafter;
     (b) For qualifying districts, in addition to the percentage in (a) of this subsection the grandfathered percentage determined as follows:
     (i) For 1997, the difference between the district's 1993 maximum levy percentage and twenty percent; and
     (ii) For 2011 through 2017, the percentage calculated as follows:
     (A) Multiply the grandfathered percentage for the prior year times the district's levy base determined under subsection (3) of this section;
     (B) Reduce the result of (b)(ii)(A) of this subsection by any levy reduction funds as defined in subsection (8) of this section that are to be allocated to the district for the current school year;
     (C) Divide the result of (b)(ii)(B) of this subsection by the district's levy base; and
     (D) Take the greater of zero or the percentage calculated in (b)(ii)(C) of this subsection.
     (8)(a) "Levy reduction funds" shall mean increases in state funds from the prior school year for programs included under subsections (3) and (4) of this section: (((a))) (i) That are not attributable to enrollment changes, compensation increases, or inflationary adjustments; and (((b))) (ii) 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.
     (b) Beginning with the 2015-16 school year through the 2019-20 school year, the increased salary allocations under the revised salary allocation schedules in section 107 of this act shall be deemed levy reduction funds for those school districts that have been grandfathered at a greater levy authority than the maximum levy percentage provided in subsection (7)(a) of this section.
     (9) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Prior school year" means the most recent school year completed prior to the year in which the levies are to be collected.
     (b) "Current school year" means the year immediately following the prior school year.
     (c) "Initiative 728 rate" means the allocation rate at which the student achievement program would have been funded under chapter 3, Laws of 2001, if all annual adjustments to the initial 2001 allocation rate had been made in previous years and in each subsequent year as provided for under chapter 3, Laws of 2001.
     (d) "Initiative 732 base" means the prior year's state allocation for annual salary cost-of-living increases for district employees in the state-funded salary base as it would have been calculated under chapter 4, Laws of 2001, if each annual cost-of-living increase allocation had been provided in previous years and in each subsequent year.
     (10) Funds collected from transportation vehicle fund tax levies shall not be subject to the levy limitations in this section.
     (11) The superintendent of public instruction shall develop rules and inform school districts of the pertinent data necessary to carry out the provisions of this section.
     (12) For calendar year 2009, the office of the superintendent of public instruction shall recalculate school district levy authority to reflect levy rates certified by school districts for calendar year 2009.

Sec. 112   RCW 84.52.0531 and 2010 c 237 s 2 and 2010 c 99 s 11 are each reenacted and 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 1997, the maximum dollar amount shall be calculated pursuant to the laws and rules in effect in November 1996.
     (2) For excess levies for collection in calendar year 1998 and thereafter, the maximum dollar amount shall be the sum of (a) plus or minus (b), (c), and (d) of this subsection minus (e) of this subsection:
     (a) The district's levy base as defined in subsection (3) of this section multiplied by the district's maximum levy percentage as defined in subsection (4) of this section;
     (b) 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) Except for nonhigh districts under (d) of this subsection, 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; increased 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 levy bases of nonhigh districts participating in an innovation academy cooperative established under RCW 28A.340.080 shall be adjusted by the office of the superintendent of public instruction to reflect each district's proportional share of student enrollment in the cooperative;
     (e) 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.
     (3) For excess levies for collection in calendar year 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) 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) Statewide 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.
     (4)(a) A district's maximum levy percentage shall be twenty-four percent in 2010 and twenty-eight percent in 2011 through 2017 and twenty-four percent every year thereafter;
     (b) For qualifying districts, in addition to the percentage in (a) of this subsection the grandfathered percentage determined as follows:
     (i) For 1997, the difference between the district's 1993 maximum levy percentage and twenty percent; ((and))
     (ii) For 2011 through 2017, the percentage calculated as follows:
     (A) Multiply the grandfathered percentage for the prior year times the district's levy base determined under subsection (3) of this section;
     (B) Reduce the result of (b)(ii)(A) 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;
     (C) Divide the result of (b)(ii)(B) of this subsection by the district's levy base; and
     (D) Take the greater of zero or the percentage calculated in (b)(ii)(C) of this subsection;
     (iii) For 2018 and thereafter, the percentage shall be calculated as follows:
     (A) Multiply the grandfathered percentage for the prior year times the district's levy base determined under subsection (3) of this section;
     (B) Reduce the result of (b)(iii)(A) 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;
     (C) Divide the result of (b)(iii)(B) of this subsection by the district's levy base; and
     (D) Take the greater of zero or the percentage calculated in (b)(iii)(C) of this subsection.
     (5)(a) "Levy reduction funds" shall mean increases in state funds from the prior school year for programs included under subsection (3) of this section: (((a))) (i) That are not attributable to enrollment changes, compensation increases, or inflationary adjustments; and (((b))) (ii) 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.
     (b) The increased salary allocations under the revised salary allocation schedule in section 107 of this act through the 2019-20 school year shall be deemed levy reduction funds for those school districts that have been grandfathered at a greater levy authority than the maximum levy percentage provided in subsection (4)(a) of this section.
     (6) For the purposes of this section, "prior school year" means the most recent school year completed prior to the year in which the levies are to be collected.
     (7) For the purposes of this section, "current school year" means the year immediately following the prior school year.
     (8) Funds collected from transportation vehicle fund tax levies shall not be subject to the levy limitations in this section.
     (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. 201   It is the intent of the legislature to take "immediate, concrete action" this legislative session in order to show the state's good faith commitment to continuing to make progress towards the 2018 full funding goals as required by the Washington state supreme court's order dated January 9, 2014.
     The legislature intends to provide additional funding for the initial priorities established in Substitute House Bill No. 2776, chapter 236, Laws of 2010, of all-day kindergarten, reduced class sizes, and fully fund materials, supplies, and operating costs. The legislature further intends to provide funding for second grade class-size reductions so as to build upon the all-day kindergarten and first grade class-size investments that have already been made in order to ensure that the academic gains made due to those investments are not lost by that same cohort of students as they progress through the educational system.
     Additionally, the legislature intends to make investments in educator compensation in recognition of the court's statement that state funding of educator compensation remains "constitutionally inadequate."

Sec. 202   2013 2nd sp.s. c 4 s 502 (uncodified) is amended to read as follows:
General Fund -- State Appropriation (FY 2014) . . . . . . . . . . . . $5,395,289,000
General Fund -- State Appropriation (FY 2015) . . . . . . . . . . . . $5,581,336,000
Education Legacy Trust Account--State Appropriation . . . . . . . . . . . . $328,563,000
          TOTAL APPROPRIATION . . . . . . . . . . . . $11,305,188,000

     The appropriations in this section are subject to the following conditions and limitations:
     (1)(a) Each general fund fiscal year appropriation includes such funds as are necessary to complete the school year ending in the fiscal year and for prior fiscal year adjustments.
     (b) For the 2013-14 and 2014-15 school years, the superintendent shall allocate general apportionment funding to school districts as provided in the funding formulas and salary schedules in sections 502 and 503 of this act, excluding (c) of this subsection.
     (c) From July 1, 2013, to August 31, 2013, the superintendent shall allocate general apportionment funding to school districts programs as provided in sections 502 and 503, chapter 50, Laws of 2011 1st sp. sess., as amended.
     (d) The enrollment of any district shall be the annual average number of full-time equivalent students and part-time students as provided in RCW 28A.150.350, enrolled on the fourth day of school in September and on the first school day of each month October through June, including students who are in attendance pursuant to RCW 28A.335.160 and 28A.225.250 who do not reside within the servicing school district. Any school district concluding its basic education program in May must report the enrollment of the last school day held in May in lieu of a June enrollment.

     (2) CERTIFICATED INSTRUCTIONAL STAFF ALLOCATIONS
     Allocations for certificated instructional staff salaries for the 2013-14 and 2014-15 school years are determined using formula-generated staff units calculated pursuant to this subsection.
     (a) Certificated instructional staff units, as defined in RCW 28A.150.410, shall be allocated to reflect the minimum class size allocations, requirements, and school prototypes assumptions as provided in RCW 28A.150.260, except that the allocation for guidance counselors in a middle school shall be 1.216 and the allocation for guidance counselors in a high school shall be 2.009 in the 2013-14 school year and the allocation for guidance counselors in high school shall be 2.539 in the 2014-15 school year in order to begin to assist school districts in providing students the opportunity to complete twenty-four credit hours, which enhancements are within the program of basic education. The superintendent shall make allocations to school districts based on the district's annual average full-time equivalent student enrollment in each grade.
     (b) Additional certificated instructional staff units provided in this subsection (2) that exceed the minimum requirements in RCW 28A.150.260 are enhancements outside the program of basic education, except as otherwise provided in this section.
     (c)(i) The superintendent shall base allocations for each level of prototypical school on the following regular education average class size of full-time equivalent students per teacher, except as provided in (c)(ii) of this subsection:

Sec. 203   RCW 28A.400.205 and 2013 2nd sp.s. c 5 s 1 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, except for the 2013-14 ((and 2014-15)) school year((s)), each school district shall be provided a cost-of-living allocation sufficient to grant this cost-of-living increase.
     (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 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.
     (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.

Sec. 204   RCW 28B.50.465 and 2013 2nd sp.s. c 5 s 2 are each amended to read as follows:
     (1) Academic employees of community and technical college districts shall be provided an annual salary cost-of-living increase in accordance with this section. For purposes of this section, "academic employee" has the same meaning as defined in RCW 28B.52.020.
     (a) Beginning with the 2001-2002 fiscal year, and for each subsequent fiscal year, except as provided in (d) of this subsection, each college district shall receive a cost-of-living allocation sufficient to increase academic employee salaries, including mandatory salary-related benefits, by the rate of the yearly increase in the cost-of-living index.
     (b) A college 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 other compensation policies. No later than the end of the fiscal year, each college district shall certify to the college board that it has spent funds provided for cost-of-living increases on salaries and salary-related benefits.
     (c) The college board shall include any funded cost-of-living increase in the salary base used to determine cost-of-living increases for academic employees in subsequent years.
     (d) Beginning with the 2001-2002 fiscal year, and for each subsequent fiscal year, except for the 2013-2014 ((and 2014-2015)) fiscal year((s)), the state shall fully fund the cost-of-living increase set forth in this section.
     (2) For the purposes of this section, "cost-of-living index" means, for any fiscal 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.

Sec. 205   RCW 28B.50.468 and 2013 2nd sp.s. c 5 s 3 are each amended to read as follows:
     (1) Classified employees of technical colleges shall be provided an annual salary cost-of-living increase in accordance with this section. For purposes of this section, "technical college" has the same meaning as defined in RCW 28B.50.030. This section applies to only those classified employees under the jurisdiction of chapter 41.56 RCW.
     (a) Beginning with the 2001-2002 fiscal year, and for each subsequent fiscal year, except as provided in (d) of this subsection, each technical college board of trustees shall receive a cost-of-living allocation sufficient to increase classified employee salaries, including mandatory salary-related benefits, by the rate of the yearly increase in the cost-of-living index.
     (b) A technical college board of trustees shall distribute its cost-of-living allocation for salaries and salary-related benefits in accordance with the technical college's salary schedules, collective bargaining agreements, and other compensation policies. No later than the end of the fiscal year, each technical college shall certify to the college board that it has spent funds provided for cost-of-living increases on salaries and salary-related benefits.
     (c) The college board shall include any funded cost-of-living increase in the salary base used to determine cost-of-living increases for technical college classified employees in subsequent years.
     (d) Beginning with the 2001-2002 fiscal year, and for each subsequent fiscal year, except for the 2013-2014 ((and 2014-2015)) fiscal year((s)), the state shall fully fund the cost-of-living increase set forth in this section.
     (2) For the purposes of this section, "cost-of-living index" means, for any fiscal 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.

Sec. 206   RCW 28A.405.415 and 2013 2nd sp.s. c 5 s 4 are each amended to read as follows:
     (1) Certificated instructional staff who have attained certification from the national board for professional teaching standards shall receive a bonus each year in which they maintain the certification. The bonus shall be calculated as follows: The annual bonus shall be five thousand dollars in the 2007-08 school year. Thereafter, the annual bonus shall increase by inflation, except that the bonus shall not be increased during the 2013-14 ((and 2014-15)) school year((s)).
     (2) Certificated instructional staff who have attained certification from the national board for professional teaching standards shall be eligible for bonuses in addition to that provided by subsection (1) of this section if the individual is in an instructional assignment in a school in which at least seventy percent of the students qualify for the free and reduced-price lunch program.
     (3) The amount of the additional bonus under subsection (2) of this section for those meeting the qualifications of subsection (2) of this section is five thousand dollars.
     (4) The bonuses provided under this section are in addition to compensation received under a district's salary schedule adopted in accordance with RCW 28A.405.200 and shall not be included in calculations of a district's average salary and associated salary limitations under RCW 28A.400.200.
     (5) The bonuses provided under this section shall be paid in a lump sum amount.

NEW SECTION.  Sec. 301   The legislature intends to provide initial options for additional revenue to support meeting the state's Article IX state constitutional duty in a reliable and dependable manner.
     The legislature recognizes that simply reducing funding in other areas of the omnibus appropriations act is neither a long-term nor sustainable solution to fulfilling the state's basic education obligations. The legislature further recognizes that budget cuts that impact state funding for programs that provide holistic services for children and their families will only undermine students' ability to arrive at the classroom ready to learn. Therefore, the legislature acknowledges that additional revenue options are necessary if Washington is to be on track to meet its constitutional promises by 2018.

Sec. 302   RCW 82.08.0293 and 2011 c 2 s 301 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales of food and food ingredients. "Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food and food ingredients" does not include:
     (a) "Alcoholic beverages," which means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume; and
     (b) "Tobacco," which means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco.
     (2) The exemption of "food and food ingredients" provided for in subsection (1) of this section does not apply to prepared food, soft drinks, bottled water, or dietary supplements. ((For purposes of this subsection, the following definitions apply:
     (a))) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Bottled water" means water that is placed in a safety-sealed container or package for human consumption. Bottled water is calorie free and does not contain sweeteners or other additives except that it may contain: (i) Antimicrobial agents; (ii) fluoride; (iii) carbonation; (iv) vitamins, minerals, and electrolytes; (v) oxygen; (vi) preservatives; and (vii) only those flavors, extracts, or essences derived from a spice or fruit. "Bottled water" includes water that is delivered to the buyer in a reusable container that is not sold with the water.
     (b) "Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:
     (i) Contains one or more of the following dietary ingredients:
     (A) A vitamin;
     (B) A mineral;
     (C) An herb or other botanical;
     (D) An amino acid;
     (E) A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or
     (F) A concentrate, metabolite, constituent, extract, or combination of any ingredient described in this subsection;
     (ii) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and
     (iii) Is required to be labeled as a dietary supplement, identifiable by the "supplement facts" box found on the label as required pursuant to 21 C.F.R. Sec. 101.36, as amended or renumbered as of January 1, 2003.
     (((b))) (c)(i) "Prepared food" means:
     (A) Food sold in a heated state or heated by the seller;
     (B) Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food; or
     (C) Two or more food ingredients mixed or combined by the seller for sale as a single item, except:
     (I) Food that is only cut, repackaged, or pasteurized by the seller; or
     (II) Raw eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal food and drug administration in chapter 3, part 401.11 of The Food Code, published by the food and drug administration, as amended or renumbered as of January 1, 2003, so as to prevent foodborne illness.
     (ii) "Prepared food" does not include the following food or food ingredients, if the food or food ingredients are sold without eating utensils provided by the seller:
     (A) Food sold by a seller whose proper primary North American industry classification system (NAICS) classification is manufacturing in sector 311, except subsector 3118 (bakeries), as provided in the "North American industry classification system -- United States, 2002";
     (B) Food sold in an unheated state by weight or volume as a single item; or
     (C) Bakery items. The term "bakery items" includes bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.
     (((c))) (d) "Soft drinks" means nonalcoholic beverages that contain natural or artificial sweeteners. Soft drinks do not include beverages that contain: Milk or milk products; soy, rice, or similar milk substitutes; or greater than fifty percent of vegetable or fruit juice by volume.
     (3) Notwithstanding anything in this section to the contrary, the exemption of "food and food ingredients" provided in this section applies to food and food ingredients that are furnished, prepared, or served as meals:
     (a) Under a state administered nutrition program for the aged as provided for in the older Americans act (P.L. 95-478 Title III) and RCW 74.38.040(6);
     (b) That are provided to senior citizens, individuals with disabilities, or low-income persons by a not-for-profit organization organized under chapter 24.03 or 24.12 RCW; or
     (c) That are provided to residents, sixty-two years of age or older, of a qualified low-income senior housing facility by the lessor or operator of the facility. The sale of a meal that is billed to both spouses of a marital community or both domestic partners of a domestic partnership meets the age requirement in this subsection (3)(c) if at least one of the spouses or domestic partners is at least sixty-two years of age. For purposes of this subsection, "qualified low-income senior housing facility" means a facility:
     (i) That meets the definition of a qualified low-income housing project under 26 U.S.C. Sec. 42 of the federal internal revenue code, as existing on August 1, 2009;
     (ii) That has been partially funded under 42 U.S.C. Sec. 1485; and
     (iii) For which the lessor or operator has at any time been entitled to claim a federal income tax credit under 26 U.S.C. Sec. 42 of the federal internal revenue code.
     (4)(a) Subsection (1) of this section notwithstanding, the retail sale of food and food ingredients is subject to sales tax under RCW 82.08.020 if the food and food ingredients are sold through a vending machine. Except as provided in (b) of this subsection, the selling price of food and food ingredients sold through a vending machine for purposes of RCW 82.08.020 is fifty-seven percent of the gross receipts.
     (b) For soft drinks, bottled water, and hot prepared food and food ingredients, other than food and food ingredients which are heated after they have been dispensed from the vending machine, the selling price is the total gross receipts of such sales divided by the sum of one plus the sales tax rate expressed as a decimal.
     (c) For tax collected under this subsection (4), the requirements that the tax be collected from the buyer and that the amount of tax be stated as a separate item are waived.

Sec. 303   RCW 82.12.0293 and 2011 c 2 s 303 are each amended to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use of food and food ingredients for human consumption. "Food and food ingredients" has the same meaning as in RCW 82.08.0293.
     (2) The exemption of "food and food ingredients" provided for in subsection (1) of this section does not apply to prepared food, soft drinks, bottled water, or dietary supplements. "Prepared food," "soft drinks," "bottled water," and "dietary supplements" have the same meanings as in RCW 82.08.0293.
     (3) Notwithstanding anything in this section to the contrary, the exemption of "food and food ingredients" provided in this section applies to food and food ingredients which are furnished, prepared, or served as meals:
     (a) Under a state administered nutrition program for the aged as provided for in the older Americans act (P.L. 95-478 Title III) and RCW 74.38.040(6);
     (b) Which are provided to senior citizens, individuals with disabilities, or low-income persons by a not-for-profit organization organized under chapter 24.03 or 24.12 RCW; or
     (c) That are provided to residents, sixty-two years of age or older, of a qualified low-income senior housing facility by the lessor or operator of the facility. The sale of a meal that is billed to both spouses of a marital community or both domestic partners of a domestic partnership meets the age requirement in this subsection (3)(c) if at least one of the spouses or domestic partners is at least sixty-two years of age. For purposes of this subsection, "qualified low-income senior housing facility" has the same meaning as in RCW 82.08.0293.

NEW SECTION.  Sec. 304   A new section is added to chapter 82.08 RCW to read as follows:
     (1) Subject to the conditions in this section, the tax levied by RCW 82.08.020 does not apply to sales of bottled water dispensed or to be dispensed to patients, pursuant to a prescription for use in the cure, mitigation, treatment, or prevention of a disease or other medical condition.
     (2) For purposes of this section, "prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this state to prescribe.
     (3) Except for sales of bottled water delivered to the buyer in a reusable container that is not sold with the water, sellers must collect tax on sales subject to this exemption. Any buyer that has paid at least twenty-five dollars in state and local sales taxes on purchases of bottled water subject to this exemption may apply for a refund of the state and local sales taxes directly from the department in a form and manner prescribed by the department. The department must deny any refund application if the amount of the refund requested is less than twenty-five dollars. No refund may be made for taxes paid more than four years after the end of the calendar year in which the tax was paid to the seller.
     (4) The provisions of RCW 82.32.060 apply to refunds authorized under this section.
     (5) With respect to sales of bottled water delivered to the buyer in a reusable container that is not sold with the water, buyers claiming the exemption provided in this section must provide the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files. In lieu of an exemption certificate, a seller may capture the relevant data elements as allowed under the streamlined sales and use tax agreement.

NEW SECTION.  Sec. 305   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use of bottled water dispensed or to be dispensed to patients, pursuant to a prescription for use in the cure, mitigation, treatment, or prevention of a disease or medical condition.
     (2) For the purposes of this section, "prescription" has the same meaning as provided in section 304 of this act.

NEW SECTION.  Sec. 306   A new section is added to chapter 82.08 RCW to read as follows:
     (1)(a) Subject to the conditions in this section, the tax levied by RCW 82.08.020 does not apply to sales of bottled water to persons whose primary source of drinking water is unsafe.
     (b) For purposes of this subsection and section 307 of this act, a person's primary source of drinking water is unsafe if:
     (i) The public water system providing the drinking water has issued a public notification that the drinking water may pose a health risk, and the notification is still in effect on the date that the bottled water was purchased;
     (ii) Test results on the person's drinking water, which are no more than twelve months old, from a laboratory certified to perform drinking water testing show that the person's drinking water does not meet safe drinking water standards applicable to public water systems; or
     (iii) The person otherwise establishes, to the department's satisfaction, that the person's drinking water does not meet safe drinking water standards applicable to public water systems.
     (2) Except for sales of bottled water delivered to the buyer in a reusable container that is not sold with the water, sellers must collect tax on sales subject to this exemption. Any buyer that has paid at least twenty-five dollars in state and local sales taxes on purchases of bottled water subject to this exemption may apply for a refund of the state and local sales taxes directly from the department in a form and manner prescribed by the department. The department must deny any refund application if the amount of the refund requested is less than twenty-five dollars. No refund may be made for taxes paid more than four years after the end of the calendar year in which the tax was paid to the seller.
     (3) The provisions of RCW 82.32.060 apply to refunds authorized under this section.
     (4)(a) With respect to sales of bottled water delivered to the buyer in a reusable container that is not sold with the water, buyers claiming the exemption provided in this section must provide the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files. In lieu of an exemption certificate, a seller may capture the relevant data elements as allowed under the streamlined sales and use tax agreement.
     (b) The department may waive the requirement for an exemption certificate in the event of disaster or similar circumstance.

NEW SECTION.  Sec. 307   A new section is added to chapter 82.12 RCW to read as follows:
     The provisions of this chapter do not apply in respect to the use of bottled water by persons whose primary source of drinking water is unsafe as provided in section 306 of this act.

Sec. 308   RCW 82.12.0263 and 1980 c 37 s 62 are each amended to read as follows:
     The provisions of this chapter ((shall)) do not apply in respect to the use of biomass fuel by the extractor or manufacturer thereof when used directly in the operation of the particular extractive operation or manufacturing plant which produced or manufactured the same. For purposes of this section, "biomass fuel" means wood waste and other wood residuals, including forest derived biomass, but does not include firewood or wood pellets. "Biomass fuel" also includes partially organic by-products of pulp, paper, and wood manufacturing processes.

NEW SECTION.  Sec. 309   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The value of the article used with respect to refinery fuel gas under this chapter is the most recent monthly United States natural gas wellhead price, as published by the federal energy information administration.
     (2) Taxes collected under this chapter on the use of refinery fuel gas must be deposited in the education legacy trust account. The department must establish a separate reporting code for taxes collected under this chapter on the use of refinery fuel gas.
     (3) This section applies to the use of refinery fuel gas occurring on or after June 1, 2014.

Sec. 310   RCW 82.08.0273 and 2011 c 7 s 1 are each amended to read as follows:
     (1) ((The tax levied by RCW 82.08.020 does not apply to sales to nonresidents of this state of tangible personal property, digital goods, and digital codes, when)) Subject to the conditions and limitations in this section, an exemption from the tax levied by RCW 82.08.020 in the form of a remittance from the department is provided for sales to nonresidents of this state of tangible personal property, digital goods, and digital codes. The exemption only applies if:
     (a) The property is for use outside this state;
     (b) The purchaser is a bona fide resident of a province or territory of Canada or a state, territory, or possession of the United States, other than the state of Washington; and
     (i) Such state, possession, territory, or province does not impose, or have imposed on its behalf, a generally applicable retail sales tax, use tax, value added tax, gross receipts tax on retailing activities, or similar generally applicable tax, of three percent or more; or
     (ii) If imposing a tax described in (b)(i) of this subsection, provides an exemption for sales to Washington residents by reason of their residence; and
     (c) The purchaser agrees, when requested, to grant the department of revenue access to such records and other forms of verification at ((his or her)) the purchaser's place of residence to assure that such purchases are not first used substantially in the state of Washington.
     (2) Notwithstanding anything to the contrary in this chapter, if parts or other tangible personal property are installed by the seller during the course of repairing, cleaning, altering, or improving motor vehicles, trailers, or campers and the seller makes a separate charge for the tangible personal property, the tax levied by RCW 82.08.020 does not apply to the separately stated charge to a nonresident purchaser for the tangible personal property but only if the separately stated charge does not exceed either the seller's current publicly stated retail price for the tangible personal property or, if no publicly stated retail price is available, the seller's cost for the tangible personal property. However, the exemption provided by this section does not apply if tangible personal property is installed by the seller during the course of repairing, cleaning, altering, or improving motor vehicles, trailers, or campers and the seller makes a single nonitemized charge for providing the tangible personal property and service. All of the ((requirements)) provisions in subsections (1) and (3) through (((6))) (7) of this section apply to this subsection.
     (3)(a) Any person claiming exemption from retail sales tax under the provisions of this section must ((display proof of his or her current nonresident status as provided in this section)) pay the state and local sales tax to the seller at the time of purchase and then request a remittance of the state portion of the sales tax from the department in accordance with this subsection and subsection (4) of this section. A request for remittance must include proof of the person's status as a nonresident at the time of the purchase for which a remittance is requested. The request for a remittance must also include any additional information and documentation as required by the department, which may include a description of the item purchased for which a remittance is requested, the sales price of the item, the amount of state and local sales tax paid on the item, the date of the purchase, the name of the seller and the physical address where the sale took place, and copies of sales receipts showing the qualified purchases.
     (b) Acceptable proof of a nonresident person's status includes one piece of identification such as a valid driver's license from the jurisdiction in which the out-of-state residency is claimed or a valid identification card which has a photograph of the holder and is issued by the out-of-state jurisdiction. Identification under this subsection (3)(b) must show the holder's residential address and have as one of its legal purposes the establishment of residency in that out-of-state jurisdiction.
     (((c) In lieu of furnishing proof of a person's nonresident status under (b) of this subsection (3), a person claiming exemption from retail sales tax under the provisions of this section may provide the seller with an exemption certificate in compliance with subsection (4)(b) of this section.))
     (4)(a) ((Nothing in this section requires the vendor to make tax exempt retail sales to nonresidents. A vendor may choose to make sales to nonresidents, collect the sales tax, and remit the amount of sales tax collected to the state as otherwise provided by law. If the vendor chooses to make a sale to a nonresident without collecting the sales tax, the vendor must examine the purchaser's proof of nonresidence, determine whether the proof is acceptable under subsection (3)(b) of this section, and maintain records for each nontaxable sale which shall show the type of proof accepted, including any identification numbers where appropriate, and the expiration date, if any.
     (b) In lieu of using the method provided in (a) of this subsection to document an exempt sale to a nonresident, a seller may accept from the purchaser a properly completed uniform exemption certificate approved by the streamlined sales and use tax agreement governing board or any other exemption certificate as may be authorized by the department and properly completed by the purchaser. A nonresident purchaser who uses an exemption certificate authorized in this subsection (4)(b) must include the purchaser's driver's license number or other state-issued identification number and the state of issuance.
     (c) In lieu of using the methods provided in (a) and (b) of this subsection to document an exempt sale to a nonresident, a seller may capture the relevant data elements as allowed under the streamlined sales and use tax agreement.
     (5)(a) Any person making fraudulent statements, which includes the offer of fraudulent identification or fraudulently procured identification to a vendor, in order to purchase goods without paying retail sales tax is guilty of perjury under chapter 9A.72 RCW.
     (b) Any person making tax exempt purchases under this section by displaying proof of identification not his or her own, or counterfeit identification, with intent to violate the provisions of this section, is guilty of a misdemeanor and, in addition, is liable for the tax and subject to a penalty equal to the greater of one hundred dollars or the tax due on such purchases.
     (6)(a) Any vendor who makes sales without collecting the tax and who fails to maintain records of sales to nonresidents as provided in this section is personally liable for the amount of tax due.
     (b) Any vendor who makes sales without collecting the retail sales tax under this section and who has actual knowledge that the purchaser's proof of identification establishing out-of-state residency is fraudulent is guilty of a misdemeanor and, in addition, is liable for the tax and subject to a penalty equal to the greater of one thousand dollars or the tax due on such sales. In addition, both the purchaser and the vendor are liable for any penalties and interest assessable under chapter 82.32 RCW))
     (i) Beginning January 1, 2015, through December 31, 2015, a person may request a remittance from the department for state and local sales taxes paid by the person on qualified retail purchases made in Washington between June 1, 2014, and December 31, 2014.
     (ii) Beginning January 1, 2016, a person may request a remittance from the department during any calendar year for state sales taxes paid by the person on qualified retail purchases made in Washington during the immediately preceding calendar year only. No application may be made with respect to purchases made before the immediately preceding calendar year.
     (b) The remittance request, including proof of nonresident status and any other documentation and information required by the department, must be made using an application process as prescribed by the department, which may be a paper process, electronic process, or a combination of a paper and electronic process. Only one remittance request may be made by a person per calendar year.
     (c) The total amount of a remittance request must be at least twenty-five dollars. The department must deny any request for a remittance that is less than twenty-five dollars.
     (d) The department will examine the applicant's proof of nonresident status and any other documentation and information as required in the application to determine whether the applicant is entitled to a remittance under this section.
     (5)(a) Any person making fraudulent statements to the department, which includes the offer of fraudulent or fraudulently procured identification or fraudulent sales receipts, in order to receive a remittance of retail sales tax is guilty of perjury under chapter 9A.72 RCW and is ineligible to receive any further remittances from the department under this section.
     (b) Any person requesting a remittance of sales tax from the department by providing proof of identification or sales receipts not the person's own, or counterfeit identification or sales receipts, with intent to violate the provisions of this section, is (i) guilty of a misdemeanor, (ii) liable for the tax, (iii) subject to a penalty equal to the greater of one hundred dollars or the tax due on such purchases, and (iv) ineligible to receive any further remittances from the department under this section.
     (6) The exemption provided by this section is for the state sales tax only.
     (7) A nonresident who receives a refund of sales tax from the seller for any reason with respect to a purchase made in this state is not entitled to a remittance for the state sales tax paid on the purchase. A person who receives both a remittance under this section and a refund from the seller with respect to the same purchase must immediately repay the remittance to the department. Interest as provided in chapter 82.32 RCW applies to amounts due under this section from the date that the department made the remittance until the amount due under this subsection is paid to the department. A person who receives a remittance with respect to a purchase for which the person had, at the time the person submitted the application for a remittance, already received a refund of sales tax from the seller is also liable for the evasion penalty in RCW 82.32.090(7) and is ineligible to receive any further remittances from the department under this section.

NEW SECTION.  Sec. 311   RCW 82.04.272 (Tax on warehousing and reselling prescription drugs) and 2013 c 19 s 127, 2003 c 168 s 401, & 1998 c 343 s 1 are each repealed.

Sec. 312   RCW 82.04.280 and 2010 c 106 s 205 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of: (a) Printing materials other than newspapers, and of publishing periodicals or magazines; (b) building, repairing or improving any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (c) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (d) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (e) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW; (f) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the federal communications commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (g) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.484 percent.
     (2) For the purposes of this section, the following definitions apply unless the context clearly requires otherwise.
     (a) "Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     (b) "Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. (("Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.))
     (c) "Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.

Sec. 313   RCW 82.04.280 and 2010 c 106 s 206 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of: (a) Printing materials other than newspapers, and of publishing periodicals or magazines; (b) building, repairing or improving any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (c) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (d) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (e) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW; (f) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the federal communications commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (g) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.484 percent.
     (2) For the purposes of this section, the following definitions apply unless the context clearly requires otherwise.
     (a) "Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     (b) "Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. (("Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.))
     (c) "Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.

Sec. 314   RCW 82.32.790 and 2010 c 114 s 201 and 2010 c 106 s 401 are each reenacted and amended to read as follows:
     (1)(a) Section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and ((section 4,)) chapter 149, Laws of 2003 are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.
     (b) For the purposes of this section:
     (i) "Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965.
     (ii) "Semiconductor microchip fabrication" means "manufacturing semiconductor microchips" as defined in RCW 82.04.426.
     (iii) "Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least one billion dollars.
     (2) Section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and chapter 149, Laws of 2003 take((s)) effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, as determined by the director of the department of revenue.
     (3)(a) The department of revenue must provide notice of the effective date of section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010(([,])), section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and ((section 4,)) chapter 149, Laws of 2003 to affected taxpayers, the legislature, and others as deemed appropriate by the department.
     (b) If, after making a determination that a contract has been signed and section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and chapter 149, Laws of 2003 ((is)) are effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department must make a determination that section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and chapter 149, Laws of 2003 ((is)) are no longer effective, and all taxes that would have been otherwise due are deemed deferred taxes and are immediately assessed and payable from any person reporting tax under RCW 82.04.240(2) or claiming an exemption or credit under section 2 or 5 through 10, chapter 149, Laws of 2003. The department is not authorized to make a second determination regarding the effective date of section 313, chapter . . ., Laws of 2014 (section 313 of this act), section 206, chapter 106, Laws of 2010, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and chapter 149, Laws of 2003.

NEW SECTION.  Sec. 315   A new section is added to chapter 82.32 RCW to read as follows:
     (1) By the last workday of the second and fourth calendar quarters, the state treasurer must transfer the amount specified in subsection (2) of this section from the general fund to the education legacy trust account. The first transfer under this subsection (1) must occur by December 31, 2014.
(2) By December 15th and June 15th of each year, the department must estimate the increase in state general fund revenues from the changes made under sections 302 through 314 of this act for the current and prior calendar quarters and notify the state treasurer of the increase.

NEW SECTION.  Sec. 316   A new section is added to chapter 43.135 RCW to read as follows:
     RCW 43.135.034(4) does not apply to:
     (1) The transfers under section 315 of this act; and
     (2) The appropriations in sections 202 through 206 of this act necessary to fund cost of living increases; materials, supplies, and operating costs; class size reduction; and all-day kindergarten.

NEW SECTION.  Sec. 401   Section 101 of this act takes effect September 1, 2014.

NEW SECTION.  Sec. 402   Section 111 of this act expires January 1, 2018.

NEW SECTION.  Sec. 403   Section 112 of this act takes effect January 1, 2018.

NEW SECTION.  Sec. 403   Sections 301 through 312 and 314 through 316 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect June 1, 2014.

NEW SECTION.  Sec. 404   Section 312 of this act expires on the date that section 313 of this act takes effect.

NEW SECTION.  Sec. 405   Sections 201 through 206 of this act take effect July 1, 2014.