Original Notice.

Preproposal statement of inquiry was filed as WSR 01-10-033.

Title of Rule: School district maintenance and operation levy authority and eligibility for local effort assistance (LEA).

Purpose: To update rules regarding the inclusion and exclusion of revenues in the local levy base used for state local effort assistance.

Other Identifying Information: Chapter 392-139 WAC, Finance levies.

Statutory Authority for Adoption: RCW 84.52.0531(9) and 28A.150.290.

Summary: 1. Rules are updated to reflect changes in state and federal revenues in the levy base.

2. Changes are proposed to prevent monies received by a school district as fiscal agent from substantially increasing a district's LEA eligibility and reducing LEA eligibility for other districts.

Name of Agency Personnel Responsible for Drafting and Implementation: Allen Jones, Office of Superintendent of Public Instruction, (360) 725-6300; and Enforcement: Michael L. Bigelow, Office of Superintendent of Public Instruction, (360) 753-1718.

Name of Proponent: Office of Superintendent of Public Instruction, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The rules govern what revenues may be included in the school district levy base used to calculate the state local effort assistance. The proposed revisions would affect this base as follows:

1. Add better schools and student achievement revenues to the levy base.

2. Prevent distortions of LEA eligibility due to monies received as a fiscal agent.

Proposal Changes the Following Existing Rules: See above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. No small business impacts have been identified.

RCW 34.05.328 does not apply to this rule adoption.

Hearing Location: Wanamaker Conference Room, Old Capitol Building, P.O. Box 47200, Olympia, WA 98504-7200, on September 4, 2001, at 9 a.m.

Assistance for Persons with Disabilities: Contact Sheila Emery by August 21, 2001, TDD (360) 664-3631, or (360) 725-6271.

Submit Written Comments to: Legal Services, Office of Superintendent of Public Instruction, P.O. Box 47200, 600 South Washington Street, Olympia, WA 98504-7200, fax (360) 753-4201, by September 3, 2001.

Date of Intended Adoption: September 5, 2001.

July 30, 2001

Dr. Terry Bergeson

Superintendent of

Public Instruction

OTS-5007.1

AMENDATORY SECTION(Amending WSR 00-09-017, filed 4/11/00, effective 5/12/00)

WAC 392-139-008   Effective date.   This chapter applies to levy authority and local effort assistance calculations for the ((2000)) 2002 calendar year and thereafter. Levy authority and local effort assistance calculations for ((1998 and 1999)) 2000 and 2001 calendar years are governed by rules in effect ((during these years)) at the time of the calculations.

[Statutory Authority: RCW 84.52.0531(9) and 28A.150.290. 00-09-017, 392-139-008, filed 4/11/00, effective 5/12/00.]

[Statutory Authority: RCW 28A.41.170 and 84.52.0531(10). 89-23-121 (Order 18), 392-139-110, filed 11/22/89, effective 12/23/89; 88-03-007 (Order 88-6), 392-139-110, filed 1/8/88.]

(a) Received by the district as an administrator for a consortium or cooperative for the benefit of students enrolled in other school districts;

(b) Passed through to another entity for the benefit of students not enrolled in the school district or persons not employed by the school district; or

(c) Directly expended by the district for the benefit of students not enrolled in the school district or persons not employed by the school district.

(2) For the purposes of this chapter, "revenues in the levy base received as a fiscal agent" do not include:

(a) Revenues received for the operation of an interdistrict cooperation program authorized pursuant to RCW 28A.335.160 or 28A.225.250 and chapter 392-135 WAC, if levy authority is transferred pursuant to WAC 392-139-330 or 392-139-901; or

(b) Revenues received by a high school district for serving students from a nonhigh school district pursuant to chapter 28A.545 RCW and chapter 392-132 WAC for which levy authority is transferred pursuant to WAC 392-139-340.

[]

(1) Multiply the school district's excess levy base determined pursuant to WAC 392-139-310 by the school district's maximum excess levy percentage determined pursuant to WAC 392-139-320;

(2) Adjust the result obtained in subsection (1) of this section by the amount of the school district's excess levy authority transfers determined pursuant to WAC 392-139-330 ((and)), 392-139-340, and 392-139-901; and

(3) Subtract the school district's maximum local effort assistance determined pursuant to WAC 392-139-660.

[Statutory Authority: RCW 28A.41.170 and 84.52.0531(10). 89-23-121 (Order 18), 392-139-300, filed 11/22/89, effective 12/23/89; 88-03-007 (Order 88-6), 392-139-300, filed 1/8/88.]

(1) Sum the following state and federal allocations for the prior school year:

(a) The basic education allocation as defined in WAC 392-139-115 and as reported on the August Report 1191;

(b) The state and federal categorical allocations for the following:

(i) Pupil transportation. Allocations for pupil transportation include allocations for the following accounts:

4199 Transportation - operations; and

4499 Transportation - depreciation.

(ii) Special education. Allocations for special education include allocations for the following accounts:

4121 Special education; and

6124 Special education supplemental.

(iii) Education of highly capable students. Allocations for education of highly capable students include allocations identified by account 4174 Highly capable.

(iv) Compensatory education. Allocations for compensatory education include allocations identified by the following accounts:

4155 Learning assistance;

4162 Better schools - staff;

4165 Transitional bilingual;

4166 Student achievement (2001-02 school year and thereafter);

6151 Remediation;

6153 Migrant;

((6164 Bilingual Title VII Part A;

6167 Indian education - JOM;))

6264 Bilingual (direct); ((and))

6267 Indian education - JOM;

6268 Indian education - ED; and

6367 Indian education - JOM.

(v) Food services. Allocations for food services include allocations identified by the following accounts:

4198 School food services (state);

6198 School food services (federal); and

6998 USDA commodities.

(vi) Statewide block grant programs. Allocations for statewide block grant programs include allocations identified by the following accounts:

4163 Better schools - professional development;

4175 Local education program enhancement (including student learning improvement allocations); and

6176 Targeted assistance.

(c) General federal programs. Allocations for general federal programs identified by the following accounts:

5200 General purpose direct federal grants - unassigned;

6100 Special purpose - OSPI - unassigned;

6121 Special education - Medicaid reimbursement;

6138 Secondary vocational education;

6146 Skills center;

6177 Eisenhower professional development; ((and))

6200 Direct special purpose grants; and

6300 Federal grants through other agencies - unassigned.

(2) Increase the result obtained in subsection (1) of this section by the percentage increase per full-time equivalent student in the state basic education appropriation between the prior school year and the current school year as stated in the state Operating Appropriations Act divided by 0.55.

(3) Revenue accounts referenced in this section are defined in the accounting manual for public school districts in the state of Washington, revised ((1998, except for the revenue accounts referenced in subsection (5) of this section, which are defined in the accounting manual, revised 2000)) 2001.

(4) The dollar amount of revenues for state and federal categorical allocations identified in this section shall come from the following sources:

(a) The following state and federal categorical allocations are taken from the Report 1197 Column A (Annual Allotment Due):

4121 Special education;

4155 Learning assistance;

4162 Better schools - staff;

4163 Better schools - professional development;

4165 Transitional bilingual;

4166 Student achievement (2001-02 school year and thereafter);

4174 Highly capable;

4175 Local education program enhancement;

4198 School food services (state);

4199 Transportation - operations;

4499 Transportation - depreciation;

6121 Special education - Medicaid reimbursements;

6124 Special education - supplemental;

6138 Secondary vocational education;

6146 Skills center;

6151 Remediation;

6153 Migrant;

6176 Targeted assistance;

6177 Eisenhower professional development; and

6198 School food services (federal).

(b) The following state and federal allocations are taken from the F-195:

5200 General purpose direct federal grants - unassigned;

6100 Special purpose - OSPI - unassigned;

((6164 Bilingual - Title VII Part A;

6167 Indian education - JOM;))

6200 Direct special purpose grants;

6264 Bilingual (direct);

6267 Indian education - JOM;

6268 Indian education - ED; ((and))

6300 Federal grants through other agencies - unassigned;

6367 Indian education - JOM; and

6998 USDA commodities.

(5) Effective for levy authority and local effort assistance calculations for ((2001)) 2002 and thereafter, ((the following federal allocations are included in the levy base in subsections (1)(c) and (4)(b) of this section:

6121 Special education - Medicaid reimbursements;

6267 Indian education - JOM;

6367 Indian education - JOM; and

6300 Federal grants through other agencies - unassigned.)) a district's levy base shall be reduced if revenues in the levy base received as a fiscal agent equal more than five percent of all other revenues in the levy base. The reduction shall be determined as follows:

(a) Determine total revenues in the levy base. Beginning with the 2003 calculations, include adjustments for the difference between actual and budgeted allocations pursuant to subsection (6) of this section.

(b) Determine revenues in the levy base received as a fiscal agent. Beginning in 2003 calculations, include adjustments for the difference between actual and budgeted allocations pursuant to subsection (6) of this section.

(c) Subtract the result of (b) of this subsection from the result of (a) of this subsection.

(d) If the result of (b) of this subsection is greater than five percent of the result of (c) of this subsection, the district's levy base is reduced by the result of (b) of this subsection minus five percent of the result of (c) of this subsection.

(6) Effective for levy authority and local effort assistance calculations for 2003 and thereafter, allocations in subsections (4)(b) and (5) of this section shall be adjusted by the difference between actual and budgeted allocations for the school year before the prior school year calculated as follows:

(a) Sum actual revenues for these accounts from Report F-196; and

(b) Subtract final budgeted revenues for these accounts from Report F-195.

(7) State moneys generated by a school district's students and redirected by the superintendent of public instruction to an educational service district at the request of the school district shall be included in the district's levy base.

(8) State basic education moneys generated by a school district's students and allocated directly to a technical college shall be included in the district's levy base.

[Statutory Authority: RCW 84.52.0531(9) and 28A.150.290. 00-09-017, 392-139-310, filed 4/11/00, effective 5/12/00. Statutory Authority: RCW 84.52.0531(a) and 28A.150.290(2). 98-08-096 (Order 98-06), 392-139-310, filed 4/1/98, effective 5/2/98. Statutory Authority: RCW 84.52.0531(10) and 28A.150.290. 96-19-037 (Order 96-13), 392-139-310, filed 9/11/96, effective 10/12/96. Statutory Authority: RCW 28A.150.290(2) and 84.52.0531(10). 93-21-092 (Order 93-20), 392-139-310, filed 10/20/93, effective 11/20/93; 92-19-124 (Order 92-07), 392-139-310, filed 9/21/92, effective 10/22/92. Statutory Authority: RCW 28A.41.170 and 84.52.0531(10). 89-23-121 (Order 18), 392-139-310, filed 11/22/89, effective 12/23/89; 88-03-007 (Order 88-6), 392-139-310, filed 1/8/88.]

[]

Washington State Code Reviser's Office