H-310                _______________________________________________

                                                      HOUSE BILL NO. 9

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Representatives Dellwo, West and Hastings

Prefiled with Chief Clerk 1/7/85.  Read first time 1/14/85 and referred to Committee on Ways & Means.

AN ACT Relating to property taxation; and amending RCW 84.40.030.

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

        Sec. 1.  Section 2, chapter 155, Laws of 1980 and RCW 84.40.030 are each amended to read as follows:

          All property, other than owner-occupied single family residences, shall be valued at one hundred percent of its true and fair value in money and assessed on the same basis unless specifically provided otherwise by law.   Each owner-occupied single family residence shall be assessed at its current use value, unless specifically provided otherwise by law.  As used in this section, "single family residence" means a single family dwelling unit and the land on which the dwelling unit stands, not to exceed one acre.

          Taxable leasehold estates shall be valued at such price as they would bring at a fair, voluntary sale for cash without any deductions for any indebtedness owed including rentals to be paid.  Notwithstanding any other provisions of this section or of any other statute, when the value of any taxable leasehold estate created prior to January 1, 1971 is being determined for assessment years prior to the assessment year 1973, there shall be deducted from what would otherwise be the value thereof the present worth of the rentals and other consideration which may be required of the lessee by the lessor for the unexpired term thereof:  PROVIDED, That the foregoing provisions of this sentence shall not apply to any extension or renewal, made after December 31, 1970 of the term of any such estate, or to any such estate after the date, if any, provided for in the agreement for rental renegotiation.

          The true and fair value of real property for taxation purposes (including property upon which there is a coal or other mine, or stone or other quarry) shall be based upon the following criteria:

          (1) Any sales of the property being appraised or similar property with respect to sales made within the past five years.  The appraisal shall take into consideration political restrictions such as zoning as well as physical and environmental influences.  The appraisal shall also take into account, (a) in the use of sales by real estate contract as similar sales, the extent, if any, to which the stated selling price has been increased by reason of the down payment, interest rate, or other financing terms; and (b) the extent to which the sale of a similar property actually represents the general effective market demand for property of such type, in the geographical area in which such property is located.  Sales involving deed releases or similar seller-developer financing arrangements shall not be used as sales of similar property.

           (2) In addition to sales as defined in subsection (1), consideration may be given to cost, cost less depreciation, reconstruction cost less depreciation, or capitalization of income that would be derived from prudent use of the property.  In the case of property of a complex nature, or being used under terms of a franchise from a public agency, or operating as a public utility, or property not having a record of sale within five years and not having a significant number of sales of similar property in the general area, the provisions of this subsection (2) shall be the dominant factors in valuation.  When provisions of this subsection (2) are relied upon for establishing values the property owner shall be advised upon request of the factors used in arriving at such value.

           (3) In valuing any tract or parcel of real property, the value of the land, exclusive of structures thereon shall be determined; also the value of structures thereon, but the valuation shall not exceed the value of the total property as it exists.  In valuing agricultural land, growing crops shall be excluded.

          (4) In valuing any building with an unconventional heating, cooling, domestic water heating or electrical system before December 31, 1987, the value placed on the building shall not exceed the value which would be placed on the building if it had a conventional system.