AN ACT Relating to enrichment levies and local effort assistance; amending RCW 84.52.0531 and 28A.500.015; repealing RCW 84.52.058; and providing an effective date.

(1) ((Beginning with taxes levied for collection in 2020, the maximum dollar amount which may be levied by or for any school district for enrichment levies under RCW 84.52.053 is equal to the lesser of two dollars and fifty cents per thousand dollars of the assessed value of property in the school district or the maximum per-pupil limit. This maximum dollar amount shall be reduced accordingly as provided under RCW 43.09.2856(2).

(a) For the purpose of this section, "inflation" means the percentage change in the seasonally adjusted consumer price index for all urban consumers, Seattle area, for the most recent 12-month period as of September 25th of the year before the taxes are payable, using the official current base compiled by the United States bureau of labor statistics.

(i) Two thousand five hundred dollars, as increased by inflation beginning with property taxes levied for collection in 2020, multiplied by the number of average annual full-time equivalent students enrolled in the school district in the prior school year, for school districts with fewer than forty thousand annual full-time equivalent students enrolled in the school district in the prior school year; or

(ii) Three thousand dollars, as increased by inflation beginning with property taxes levied for collection in 2020, multiplied by the number of average annual full-time equivalent students enrolled in the school district in the prior school year, for school districts with forty thousand or more annual full-time equivalent students enrolled in the school district in the prior school year.

(c) "Open for in-person instruction to all students" means that all students in all grades have the option to participate in at least 40 hours of planned in-person instruction per month and the school follows state department of health guidance and recommendations for resuming in-person instruction to the greatest extent practicable.

(d) "Prior school year" means the most recent school year completed prior to the year in which the levies are to be collected, except as follows:

(i) In the 2022 calendar year, if 2019-20 school year average annual full-time equivalent enrollment is greater than the school district's 2020-21 school year average annual full-time equivalent enrollment and the school district is open for in-person instruction to all students by the beginning of the 2021-22 school year, "prior school year" means the 2019-20 school year.

(ii) In the 2023 calendar year, if 2019-20 school year average annual full-time equivalent enrollment is greater than the school district's 2021-22 school year average annual full-time equivalent enrollment and the school district was open for in-person instruction to all students by the beginning of the 2021-22 school year, "prior school year" means the 2019-20 school year.

(3) For districts in a high/nonhigh relationship, the enrollments of the nonhigh students attending the high school shall only be counted by the nonhigh school districts for purposes of funding under this section.

(4) For school districts participating in an innovation academy cooperative established under RCW 28A.340.080, enrollments of students attending the academy shall be adjusted so that each participant district receives its proportional share of student enrollments for purposes of funding under this section.

(5) Beginning with propositions for enrichment levies for collection in calendar year 2020 and thereafter, a))The maximum dollar amount which may be levied by or for any school district for enrichment levies under RCW 84.52.053 must be determined as follows: For enrichment levies for collection in calendar year 2026 and thereafter, the maximum dollar amount is the sum of (a) of this subsection plus or minus (b), (c), and (d) of this subsection minus (e) and (f) of this subsection;

(a) The school district's levy base as provided in subsection (2) of this section multiplied by the school district's maximum levy percentage as provided in subsection (3) of this section;

(b) For school districts in a high/nonhigh relationship, the high school district's maximum levy amount must be reduced and the nonhigh school district's maximum levy amount must 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 school districts in an interdistrict cooperative agreement, the nonresident school district's maximum levy amount must be reduced and the resident school district's maximum levy amount must be increased by an amount equal to the per pupil basic education allocation included in the nonresident school district's levy base under subsection (2) of this section, multiplied by:

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

(d) The levy bases of nonhigh school districts participating in an innovation academy cooperative established under RCW 28A.340.080 must be adjusted by the office of the superintendent of public instruction to reflect each school district's proportional share of student enrollment in the cooperative;

(e) The school district's maximum levy amount must be reduced by the maximum amount of local effort assistance for which the school district is eligible under RCW 28A.500.015;

(f) The school district's maximum levy amount must be reduced by the out-of-compliance expenditure amount identified by the state auditor under RCW 43.09.2856(2), if applicable.

(2) For excess levies for collection in calendar year 2026 and thereafter, a school district's levy base is the sum of allocations in (a) and (b) of this subsection received by the school district for the prior school year. A school district's levy base does not include local school district property tax levies or other local revenues or state and federal allocations not identified in (a) and (b) of this subsection.

(3) Beginning with collection year 2026 and each year thereafter, a school district's maximum levy percentage is 30 percent.

(4) A district must receive approval of an enrichment levy expenditure plan under RCW 28A.505.240 before submission of the proposition to the voters.

(((6) 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.

(7) Beginning with taxes levied for collection in 2018, enrichment))(5) Enrichment levy revenues must be deposited in a separate subfund of the school district's general fund pursuant to RCW 28A.320.330((,)) and ((for the 2018-19 school year)) are subject to the restrictions of RCW 28A.150.276 and the audit requirements of RCW 43.09.2856.

(((8)))(6) Funds collected from levies for transportation vehicles, construction, modernization, or remodeling of school facilities as established in RCW 84.52.053 are not subject to the levy limitations in ((subsections (1) through (5) of)) this section.

(7) For 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.

(8) 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.

(1) ((Beginning in calendar year 2020 and each calendar year thereafter, the))The state must provide state local effort assistance funding to supplement school district enrichment levies for eligible school districts as provided in this section.

(2)(((a) For an eligible school district with an actual enrichment levy rate that is less than one dollar and fifty cents per thousand dollars of assessed value in the school district, the annual local effort assistance funding is equal to the school district's maximum local effort assistance multiplied by a fraction equal to the school district's actual enrichment levy rate divided by one dollar and fifty cents per thousand dollars of assessed value in the school district.

(b) For an eligible school district with an actual enrichment levy rate that is equal to or greater than one dollar and fifty cents per thousand dollars of assessed value in the school district, the annual local effort assistance funding is equal to the school district's maximum local effort assistance.

(c) Beginning in calendar year 2022, for state-tribal education compact schools established under chapter 28A.715 RCW, the annual local effort assistance funding is equal to the actual enrichment levy per student as calculated by the superintendent of public instruction for the previous year for the school district in which the state-tribal education compact school is located, up to a maximum per student amount of one thousand five hundred fifty dollars as increased by inflation from the 2019 calendar year, multiplied by the student enrollment of the state-tribal education compact school in the prior school year.

(3)))Funds raised by school districts through enrichment levies shall be matched with state funds using the following ratio of state funds to levy funds:

(3) The maximum amount of state funds for school districts eligible for local effort assistance is the district's 18 percent levy amount, multiplied by the following percentage:

(4) For state-tribal education compact schools subject to chapter 28A.715 RCW, annual local effort assistance funding is equal to the actual enrichment levy per student as calculated by the superintendent of public instruction for the previous school year for the school district in which the state-tribal education compact school is located, up to $1,550 as increased by inflation from the 2019 calendar year, multiplied by the student enrollment of the state-tribal education compact school in the prior school year.

(5) The state local effort assistance funding provided under this section is not part of the state's program of basic education deemed by the legislature to comply with the requirements of Article IX, section 1 of the state Constitution.

(a) (("Eligible school district" means a school district where the amount generated by a levy of one dollar and fifty cents per thousand dollars of assessed value in the school district, divided by the school district's total student enrollment in the prior school year, is less than the state local effort assistance threshold.

(b) For the purpose of this section, "inflation" means, for any school year, the rate of the yearly increase of the previous calendar year's annual average consumer price index for all urban consumers, Seattle area, using the official current base compiled by the bureau of labor statistics, United States department of labor.

(i) The school district's actual prior school year enrollment multiplied by the state local effort assistance threshold; and

(ii) The amount generated by a levy of one dollar and fifty cents per thousand dollars of assessed value in the school district.

(d) "Prior school year" means the most recent school year completed prior to the year in which the state local effort assistance funding is to be distributed, except as follows:

(e) "State local effort assistance threshold" means one thousand five hundred fifty dollars per student, increased for inflation beginning in calendar year 2020.

(5) For districts in a high/nonhigh relationship, the enrollments of the nonhigh students attending the high school shall only be counted by the nonhigh school districts for purposes of funding under this section.

(6) For school districts participating in an innovation academy cooperative established under RCW 28A.340.080, enrollments of students attending the academy shall be adjusted so that each participant district receives its proportional share of student enrollments for purposes of funding under this section.))"Districts eligible for local effort assistance" and "eligible school districts" means those districts with a 18 percent levy rate that exceeds the statewide average 18 percent levy rate.

(b) "District's 18 percent levy amount" means the school district's maximum levy authority after transfers determined under RCW 84.52.0531(1) (a) through (d) multiplied by 18 percent.

(c) "District's 18 percent levy rate" means the district's 18 percent levy amount divided by the district's assessed valuation for excess levy purposes for the prior tax collection year as adjusted to 100 percent by the county indicated ratio established in RCW 84.48.075.

(d) "Inflation" means, for any school year, the rate of the yearly increase of the previous calendar year's annual average consumer price index for all urban consumers, Seattle area, as of the beginning of the school year, using the official current base compiled by the bureau of labor statistics, United States department of labor.

(e) "Prior tax collection year" means the year immediately preceding the year in which the local effort assistance is allocated.

(f) "Statewide average 18 percent levy rate" means 18 percent of the total levy bases as described in RCW 84.52.0531, summed for all school districts, and divided by the total assessed valuation for excess levy purposes in the prior tax collection year for all districts as adjusted to 100 percent by the county indicated ratio established in RCW 84.48.075.

NEW SECTION. Sec. 3. RCW 84.52.058 (School districts with high/nonhigh relationship) and 2018 c 266 s 305 are each repealed.