AN ACT Relating to historic preservation; adding a new chapter to Title 84 RCW; and prescribing penalties.

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

NEW SECTION. Sec. 1. The legislature finds and declares that it is in the best interest of the people of the state of Washington to maintain, preserve, and improve significant elements of their historical, cultural, and architectural heritage.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Historic property" means real property together with improvements thereon, except property listed in a register primarily for objects buried below ground, which is:

(a) Listed in a local register of historic places created by comprehensive ordinance:

(i) Certified by the secretary of the interior as provided in P.L. 96-515;

(ii) Defining criteria to determine historic significance which includes the age of a property, its importance in local, state, or national history, and its historical, cultural, or architectural significance; and

(iii) Establishing a review board to recommend properties to be designated by the local legislative authority for inclusion in the local register and approve or deny, or recommend approval or denial to the local legislative authority, of applications for alteration and demolition;

(b) Listed in the state or national register of historic places if located in a jurisdiction which does not have a local register; or

(c) Located within an historic district listed in the national, state, or a local register of historic places if the property is determined to be historic property under section 3 of this act.

(2) "State review board" means the advisory council on historic preservation established under chapter 27.34 RCW, or any successor agency designated by the state to act as the state historic preservation review board under federal law.

(3) "Local review board" means a local historic preservation review board under subsection (1)(a) of this section.

(4) "Owner" means the owner of record.

NEW SECTION. Sec. 3. (1) The local legislative authority shall determine which class or classes of property, if any, located within an historic district listed in a local register qualify as historic property.

(2) The local legislative authority in a jurisdiction which does not have a local register may determine which class or classes of property located within an historic district listed in the national or state register of historic places qualify as historic property. If the local legislative authority does not make such a determination, the state review board shall determine which class or classes of property qualify as historic property.

NEW SECTION. Sec. 4. An owner of historic property desiring classification and valuation under this chapter shall apply to the assessor of the county in which the property is located upon forms prescribed by the department of revenue and supplied by the county assessor. The application form shall include a statement that the applicant is aware of the potential tax liability involved when the property ceases to be classified as historic property. Applications shall be made no later than October 1 of the calendar year preceding the first assessment year for which classification is requested.

NEW SECTION. Sec. 5. (1) Within ten days after the filing of the application in the county assessor's office, the county assessor shall refer each application for classification to the local review board or, if none exists, to the state review board. The review board shall review the application and may view the premises.

(2) The review board shall approve the application if the property has not been substantially altered in a way which adversely affects those elements listed in the designation which qualify it as historically significant, and the owner shall enter into a covenant with the review board which requires the owner for the fifteen year period of the classification to:

(a) Monitor the property for its continued qualification for the special assessment;

(b) Comply with minimum standards of maintenance as defined in the agreement;

(d) Apply to the state review board for approval or denial of any demolition or alteration if no local ordinance governing the alteration and demolition of historic properties exists;

(e) Report to the review board as to the continued qualification of the property for classification as historic property upon request of the board; and

(f) Comply with any other provisions in the original agreement as may be appropriate.

(3) Once a covenant between an owner and a review board has become effective pursuant to this chapter, there shall be no changes in standards of maintenance, public access, alteration, or report requirements, or any other provisions of the covenant during the period of the classification without the approval of all parties to the covenant.

(4) An application for classification of historic property which is not denied by the state or local review board before December 31 of the calendar year in which the application is made shall be considered approved.

NEW SECTION. Sec. 6. (1) The review board shall notify the county assessor and the applicant of the approval or denial of the application.

(2) If the state or local review board determines that the property qualifies as historic property, the review board shall certify the fact in writing and shall file a copy of the certificate with the county assessor within ten days. The certificate shall state the facts upon which the approval is based.

(3) The assessor shall record the certificate with the county auditor.

(4) The assessor, as to any historic property, shall value the property under section 7 of this act and, each year the historic property is classified and so valued, shall enter on the assessment list and tax roll that the property is being specially valued as historic property.

(5) The assessor shall make a notation each year on the assessment list and the tax roll of the valuation of property classified as historic property and the valuation of the property were it not so classified.

(6) The assessor shall file notice of both values with the county treasurer, who shall record the notice in the place and manner provided for recording delinquent taxes.

NEW SECTION. Sec. 7. (1) The county assessor shall, for fifteen consecutive assessment years following the calendar year in which application is made, value property classified as historic property at the true and fair value of the property as of January 1 of the application year. If, during the fifteen-year period, the true and fair value of the property declines below the valuation level under this section, the property shall be valued at the lower level.

(2) The valuation made under this section applies to both the historic structure and the land on which it is located not to exceed one acre unless the land is specifically designated as historic property.

(3) The entitlement of property to the special valuation provisions of this section shall be determined as of January 1. If property becomes disqualified for the special valuation for any reason, the property shall receive the special valuation for that part of any year during which it remained qualified or the owner was acting in the good faith belief that the property was qualified.

NEW SECTION. Sec. 8. (1) When property has once been classified and valued as historic property, it shall remain so classified and be granted the special valuation provided by section 7 of this act for fifteen years or until the property is disqualified by:

(a) Notice by the owner to the assessor to remove the special valuation;

(b) Sale or transfer to an ownership making it exempt from property taxation; or

(c) Removal of the special valuation by the assessor upon determination by the state or local review board that the property no longer qualifies as historic property or that the owner has failed to comply with the conditions established under section 5 of this act.

(2) The sale or transfer to a new owner or transfer by reason of death of a former owner to a new owner does not disqualify the property from the special valuation provided by section 7 of this act if:

(a) The property continues to qualify as historic property; and

(b) The new owner files a notice of compliance with the assessor of the county in which the property is located. Notice of compliance forms shall be prescribed by the state department of revenue and supplied by the county assessor.

The notice shall contain a statement that the new owner is aware of the historic designation and of the potential tax liability involved when the property ceases to be classified as historic property.

(3) When the property ceases to qualify for the special valuation the owner shall immediately notify the state or local review board.

NEW SECTION. Sec. 9. (1) Except as provided in subsection (4) of this section, whenever property classified and valued as historic property under section 7 of this act becomes disqualified for the valuation, there shall be added to the tax levied against the property on the next general property tax roll an additional tax equal to:

(a) The difference between the property tax paid each year the property was classified and valued as historic property and the amount of tax otherwise due and payable had the property not been so classified and valued; plus

(b) Interest on the amounts of the additional tax at the statutory rate charged on delinquent property taxes from the dates on which the additional tax could have been paid without penalty if the property had not been classified as historic property under this chapter; plus

(2) The additional tax and penalties, if any, together with applicable interest thereon, shall become a lien on the property which shall have priority to and shall be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the property may become charged or liable.

(3) Before the additional tax or penalty imposed by subsection (1) of this section is added to the tax levied against the property on the next general property tax roll, in the case of disqualification under section 8 of this act, the assessor shall notify the owner of the property by mail, return receipt requested, of the disqualification.

(4) The additional tax, interest, and penalty shall not be imposed if the disqualification resulted solely from:

(a) Sale or transfer of the property to an ownership making it exempt from taxation;

(b) Alteration or destruction through no fault of the owner; or

NEW SECTION. Sec. 10. The state review board shall adopt rules necessary to carry out the purposes of this chapter. The rules shall include maintenance standards for historic properties to be used as minimum requirements by state and local review boards to ensure that the historic property is safe and habitable, including but not limited to:

(1) Elimination of visual blight due to past neglect of maintenance and repair to the exterior of the building, including replacement of broken or missing doors and windows, repair of deteriorated architectural features, and painting of exterior surfaces;

(2) Correction of structural defects and hazards;

(3) Protection from weather damage due to defective roofing, flashings, glazing, caulking, or lack of heat; and

(4) Elimination of any condition on the premises which could cause or augment fire or explosion.

NEW SECTION. Sec. 11. Any decision by a state or local review board on an application for classification as historic property, disqualification of property classified as historic property, or any other matter under this chapter may be appealed to the local hearing examiner, where one exists, or to the local legislative authority in the jurisdiction in which the property is located. Decisions of the local legislative authority may be appealed to superior court under RCW 34.04.130 in addition to any other remedy at law.

NEW SECTION. Sec. 12. No application for classification under this chapter may be made after December 31, 1991.

NEW SECTION. Sec. 13. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 14. Sections 1 through 12 of this act shall constitute a new chapter in Title 84 RCW.