WSR 02-24-015

PERMANENT RULES

DEPARTMENT OF REVENUE


[ Filed November 25, 2002, 3:11 p.m. ]

Date of Adoption: November 25, 2002.

Purpose: This chapter of rules is designed to assist assessors, taxing districts, and other involved in the levy making process.

This rule making updates information provided in the existing rules and provides up-to-date examples. It incorporates changes made to the various levy statutes since the rules were last adopted in 1994. This rule making incorporates information from several property tax bulletins, and reflects changes made to the statutes by recent referendums and initiatives passed by the voters of this state.

Citation of Existing Rules Affected by this Order: Amending WAC 458-19-005 Definitions, 458-19-010 Levy limit and levy rate calculations, 458-19-020 ((One hundred six percent)) Levy limit -- Method of calculation. (((RCW 84.55.010 and 84.55.092))), 458-19-025 ((One hundred six percent levy limit)) Restoration of regular levy. (((RCW 84.55.015))), 458-19-030 ((One hundred six percent)) Levy limit -- Consolidation of districts. (((RCW 84.55.020))), 458-19-035 ((One hundred six percent)) Levy limit -- Annexation. (((RCW 84.55.030 and 84.55.110))), 458-19-040 ((One hundred six percent)) Levy limit -- Newly formed taxing district. (((RCW 84.55.035))), 458-19-045 ((One hundred six percent)) Levy limit -- Removal of limit (lid lift). (((RCW 84.55.050))), 458-19-050 Port district levies, 458-19-055 ((One hundred six percent)) Levy limit -- Proration of earmarked funds, 458-19-060 Emergency medical service levy, 458-19-065 ((One hundred six percent)) Levy limit -- Protection of future levy capacity, 458-19-070 Procedure to adjust consolidated levy rate for taxing districts when ((limits)) the statutory aggregate dollar rate limit is exceeded. (((RCW 84.52.010 and 84.52.050))), 458-19-075 Constitutional one percent ((levy)) limit calculation, 458-19-080 City annexed by fire protection and/or library districts. (((RCW 52.04.081 and 27.12.390))) and 458-19-550 State levy -- Apportionment between counties; new section WAC 458-19-085 Refunds -- Procedures -- Applicable limits; and repealing WAC 458-19-015 Assessor to determine one hundred six percent levy limit -- Exceptions.

Statutory Authority for Adoption: RCW 84.08.010, 84.08.070, 84.48.080, 84.55.060, and 84.52.0502.

Other Authority: Chapters 84.52 and 84.55 RCW, RCW 34.05.230(1).

Adopted under notice filed as WSR 02-16-055 on August 1, 2002.

Changes Other than Editing from Proposed to Adopted Version: Editorial and grammatical changes were made in the following rules:

WAC 458-19-005 Definitions, in subsections (2)(i), (2)(n)(i), and (2)(r);

WAC 458-19-020 Levy limit -- Method of calculation, in the last sentence of subsection (2);

WAC 458-19-030 Levy limit -- Consolidation of districts, in subsection (2)(a) and in the example contained in subsection (3);

WAC 458-19-040 Levy limit -- Newly formed taxing district, in the second sentence of subsection (2);

WAC 458-19-045 Levy limit -- Removal of limit (lid lift), in subsection (2);

WAC 458-19-060 Emergency medical service levy, in subsection (4);

WAC 458-19-070 Procedure to adjust consolidated levy rate for taxing districts when the statutory aggregate dollar rate is exceeded, in subsections (2)(f) and (3)(c)(iii); and

WAC 458-19-085 Refunds -- Procedures -- Applicable limits, in subsection (2)(c).

Additionally:

The phrase "ballot proposition" in WAC 458-19-045 Levy limit -- Removal of limit (lid lift) was changed to "ballot title and ballot measure" so that it is clear what a ballot title and measure should include when a lid lift is being proposed. We also inserted a sentence referencing RCW 29.27.066, which requires a ballot title to include a concise description of the measure not to exceed seventy-five words.

Portions of WAC 458-19-055 Levy limit -- Proration of earmarked funds were rewritten to clarify how certain levies made by a county or city/town for specific earmarked purposes may be reduced. An example was added to illustrate how such levies may be reduced when the overall budget of the county or city/town is limited by the levy limit contained in chapter 84.55 RCW. Subsection (5) was deleted, and later subsections renumbered.

The text of WAC 458-19-060 Emergency medical service levy was changed so that all references to "ballot proposition" were changed to "ballot title and ballot measure." Also, the levy rate up to which an EMS district may levy when the voters have authorized an EMS levy without further voter approval is clarified.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 1, Amended 16, Repealed 1.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 1, Amended 16, Repealed 1.
Effective Date of Rule: Thirty-one days after filing.

November 25, 2002

Russell W. Brubaker

Assistant Director

Legislation and Policy Division

OTS-5756.5


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-005   Definitions.   (1) Introduction. This rule contains definitions of the terms used throughout chapters 84.52 and 84.55 RCW and chapter 458-19 WAC in the administration of the system used to levy property taxes on taxable property within the state of Washington.

(2) Unless the context clearly requires otherwise, the following definitions apply ((throughout this chapter)):

(((1))) (a) "Annexation" ((is the act of)) means one taxing district is adding territory or another dissimilar taxing district from outside the annexing taxing district's boundary and includes a merger of a portion of a fire protection district under chapter 52.06 RCW with another fire protection district.

(((2))) (b) "Assessed value" ((is)) means the value of taxable property placed on the assessment rolls. The term is often abbreviated with the initials "A.V."

(((3))) (c) "Certified property tax levy" ((is)) means the levy certified by a taxing district to the county assessor, either through the county legislative authority or directly to the assessor ((directly)).

(((4))) (d) "Certified property tax levy rate" ((is)) means the tax rate calculated by the county assessor in accordance with law((,)) to produce the lawful amount of the certified property tax levy.

(((5))) (e) "Consolidated levy rate" means:

(((a))) (i) For purposes of the statutory aggregate dollar rate levy limit ((($5.90))), the sum of all regular levy rates set for collection exclusive of rates set for port and public utility districts, emergency medical services under RCW 84.52.069, conservation futures under RCW 84.34.230, ((and)) levies to finance affordable housing under RCW 84.52.105((;

(b))), and the portion of metropolitan park district levies protected under RCW 84.52.120; and

(ii) For purposes of the constitutional one percent ((levy)) limit, the sum of all regular levy rates set for collection exclusive of rates set for port and public utility districts.

(((6))) (f) "Consolidation" ((is)) means the act of combining two or more similar taxing districts into one taxing district; for example, the combination of two fire protection districts into one fire protection district.

(((7) "Constitutional limit" or)) (g) "Constitutional one percent ((levy)) limit" means the levy limit established by Article VII, section 2 of the state Constitution, which prohibits the aggregate of all tax levies on real and personal property from exceeding one percent ($10 per $1,000) of the true and fair value of property. This limit does not apply to excess levies, levies by port districts, and levies by public utility districts. This limit is also ((stated)) set forth in RCW 84.52.050.

(((8))) (h) "Department" means the department of revenue of the state of Washington.

(((9))) (i) "Excess property tax levy" ((means the lawfully authorized levy by a taxing district, other than a port or public utility district, of additional taxes in excess of the statutory aggregate dollar rate limit, the statutory dollar rate limit, or the constitutional one percent levy limit, when authorized so to do by the voters of the taxing district in the manner specified in the state Constitution (Article VII, section 2))) or "excess levy" means a voter-approved property tax levy by or for a taxing district, other than a port or public utility district, that is subject to neither the statutory aggregate dollar rate limit set forth in RCW 84.52.043 nor the constitutional one percent limit set forth in Article VII, section 2 of the state Constitution and in RCW 84.52.050. It does not include regular levies allowed to exceed a statutory limit with voter approval.

(((10))) (j) "Improvement" means any valuable change in or addition to real property, including the subdivision or segregation of parcels of real property or the merger of parcels of real property.

(((11))) (k) "Inflation" means the percentage change in the implicit price deflator for personal consumption expenditures for the United States as published for the most recent twelve-month period by the Bureau of Economic Analysis of the Federal Department of Commerce in September of the year before the taxes are payable; see RCW 84.55.005.

(l) "Joint taxing district" means a taxing district that exists in two or more counties; the term does not include the state nor does it include an ((inter-county)) intercounty rural library district.

(((12))) (m) "Junior taxing district" means a taxing district other than the state, a county, a county road district, a city, a town, a port district, or a public utility district.

(((13))) (n) "Levy limit" means the statutorily established limit that prohibits a taxing district, other than the state, from levying regular property taxes for a particular year that exceed the limit factor multiplied by the highest amount of regular property taxes that could have been lawfully levied in the taxing district in any year since 1985, plus an additional dollar amount calculated by multiplying the increase during the current year of the assessed value in the taxing district due to new construction, improvements to property, and the increase in the value of state assessed property by the levy rate of that district for the preceding year, or the last year the taxing district levied taxes.

(i) For purposes of the levy limit, the phrase "highest amount of regular property taxes that could have been lawfully levied" means the maximum amount that could have been levied by a taxing district under the limitation set forth in chapter 84.55 RCW unless the highest amount that could have been levied was actually restricted by the taxing district's statutory dollar rate limit. If the taxing district's levy was restricted by the statutory dollar rate limit, the highest amount that could have been lawfully levied is the amount produced by multiplying the assessed value of the taxing district by the statutory dollar rate.

(ii) The levy limit for the state is the limit factor multiplied by the highest amount of regular property taxes lawfully levied in the three most recent years, plus an additional dollar amount attributable to new construction, improvements to property, and any increase in the assessed value of state assessed property.

(o) "Levy rate" means the dollar amount per thousand dollars of assessed value applied to taxable property within a taxing district and is calculated by dividing the total amount of a statutorily authorized levy of a taxing district by the total assessed value of that district((, divided by one thousand,)) and is expressed in dollars and cents per ((one)) thousand dollars of assessed value.

(((14))) (p) "Limit factor" means:

(i) For taxing districts with a population of less than ten thousand in the calendar year immediately prior to the assessment, one hundred one percent;

(ii) For taxing districts having made a finding of substantial need in accordance with RCW 84.55.0101, the lesser of the substantial need factor or one hundred one percent; or

(iii) For all other taxing districts, including the state, the lesser of one hundred one percent or one hundred percent plus inflation.

(q) "New construction" means the construction or alteration of any property for which a building permit was issued, or should have been issued, under chapter 19.27, 19.27A, or 19.28 RCW or other laws providing for building permits, which results in an increase in the value of the property.

(((15) "One hundred six percent limit" is the statutorily established limit that prohibits a taxing district other than the state from levying regular property taxes in any year that exceed one hundred six percent of the highest amount of regular property taxes that could have been lawfully levied in that taxing district in any year since 1985, plus an additional dollar amount calculated by multiplying the increase during the current year of the assessed value in the taxing district due to new construction, improvements to property and the increase in the value of state assessed property by the levy rate of that district for the preceding year.

(a) For purposes of the one hundred six percent limit, the phrase "highest amount of regular property taxes that could have been lawfully levied" means the maximum levy amount that could have been produced by a taxing district under the one hundred six percent limit unless the highest levy amount that could have been produced was actually restricted by the taxing district's statutory dollar rate limit.

(b) The state is prohibited from levying regular property taxes in any year that exceed one hundred six percent of the amount of regular property taxes lawfully levied in the highest of the three most recent years, plus the additional dollar amount calculated in the same manner as for other taxing districts.

(16))) (r) "Regular property tax levy" or "regular levy" means a property tax levy by or for a taxing district that is subject to the statutory aggregate dollar rate limit set forth in RCW 84.52.043 ((and)), the constitutional one percent ((levy)) limit set forth in RCW 84.52.050, or is a levy imposed by or for a port district or a public utility district.

(((17))) (s) "Regular property taxes" ((are)) means those taxes resulting from regular property tax levies.

(((18))) (t) "Senior taxing district" means the state (for support of common schools), a county, a county road district, a city, or a town.

(((19))) (u) "Statutory aggregate dollar rate limit" or "statutory aggregate limit" means the maximum aggregate regular property tax levy rate within a county established by law for senior and junior taxing districts, other than the state. See WAC 458-19-070 for the current limit.

(((20))) (v) "Substantial need limit factor" means a limit factor approved by a taxing district's legislative authority that exceeds one hundred percent plus inflation. This limit cannot exceed one hundred one percent.

(w) "Statutory dollar rate limit" means the maximum regular property tax levy rate established by law for a particular class of taxing district.

(((21))) (x) "Super majority" means a majority of at least three-fifths of the registered voters of a taxing district approving a proposition authorizing a levy, at which election the number of persons voting "yes" on the proposition ((shall)) constitutes three-fifths of a number equal to forty percent of the total votes cast in ((such)) the taxing district in the last preceding general election; or by a majority of at least three-fifths of the registered voters of the taxing district voting on the proposition when the number of registered voters voting on the proposition exceeds forty percent of the total votes cast in ((such)) the taxing district in the last preceding general election.

(((22))) (y) "Tax code area" means a geographical area made up of a unique mix of one or more taxing districts, which is established for the purpose of properly calculating, collecting, and distributing taxes. Only one tax code area will have the same combination of taxing districts, with limited exceptions.

(((23))) (z) "Taxing district" means the state and any county, city, town, ((township,)) port district, school district, road district, metropolitan park district, water-sewer district, or other municipal corporation, now or hereafter existing, having the power or authorized by law to impose burdens upon property within the district on an ad valorem basis, for the purpose of obtaining revenue for public purposes, as distinguished from municipal corporations authorized to impose burdens, or for which burdens may be imposed for public purposes, upon property in proportion to the benefits accruing thereto.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-005, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-010   Levy limit and levy rate calculations.   (((1) Assessor sets levy rates. The county assessor shall calculate the certified property tax levy rate necessary to collect the amount of taxes authorized in the certified property tax levy of each taxing district, within the limitations provided by law.

(2) Joint taxing district. For a joint taxing district, the assessor of the county in which is located the greatest amount of assessed value of the joint taxing district shall calculate the levy rate for the joint taxing district.

(3) Intercounty rural library district. The board of trustees of an intercounty rural library district shall calculate the levy rate for such district in consultation with the respective county assessors and certify that rate to the respective county legislative authorities.)) (1) Introduction. This rule explains two of the basic steps in the levy setting process. First, who determines the levy limit for all taxing districts and second, who calculates the levy rate for the various taxing districts.

(2) Who determines the levy limit? The assessor generally determines the levy limit for all taxing districts levying regular property taxes. However, the levy limit for joint taxing districts, intercounty rural library districts, and the state is determined as follows:

(a) Joint taxing districts. The levy limit for joint taxing districts is determined by the assessor of the county in which the greatest amount of assessed value of the joint taxing district is located;

(b) Intercounty rural library districts. The levy limit for intercounty rural library districts is determined by the board of trustees of the intercounty rural library district in consultation with the assessors of the counties served by the district; and

(c) State levy. The levy limit for the state is determined by the department.

(3) Who sets levy rates? The assessor generally calculates the property tax levy rate necessary to collect the amount of taxes levied by or for each taxing district, within the limitations provided by law. However, the levy rate for joint taxing districts and intercounty rural library districts is calculated as follows:

(a) Joint taxing districts. The assessor of the county in which the greatest amount of assessed value of the joint taxing district is located calculates the levy rate; and

(b) Intercounty rural library districts. The board of trustees of an intercounty rural library district calculates the levy rate for the intercounty rural library district in consultation with the assessors of the counties served by the district and certifies that rate to the respective county legislative authorities.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-010, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-020   ((One hundred six percent)) Levy limit -- Method of calculation.   (((RCW 84.55.010 and 84.55.092)))

(1) Introduction. This rule explains the general method used to calculate the levy limit for the state and all other taxing districts in accordance with RCW 84.55.010 and 84.55.092. Except for the state levy, the same method is generally used to calculate the amount of regular property taxes that can be levied by a taxing district in any year. This rule also describes what occurs when a taxing district makes a finding of substantial need in accordance with RCW 84.55.0101 to use a limit factor in excess of one hundred percent plus inflation. This rule does not attempt to include all special circumstances that may affect the applicable limit under chapter 84.55 RCW.

(2) Increase in tax revenues - Ordinance or resolution required. No taxing district, other than the state, may authorize an increase in property tax revenue, other than one resulting from an increase in assessed value of the district attributable to new construction, improvements to property, or any increase in state assessed property except by holding a public hearing and adopting an ordinance or resolution. The ordinance or resolution may cover a period of up to two years, but the ordinance or resolution must specifically state for each year the dollar increase and percentage change in the levy from the previous year. The dollar increase and percentage change should reflect everything included in the levy limit and should not reflect anything excluded under chapter 84.55 RCW (such as, but not limited to, a levy for property tax refunds paid under the provisions of chapter 84.68 or 84.69 RCW).

(a) A majority of the legislative authority of a taxing district must approve an ordinance or resolution authorizing an increase in the taxing district's levy as calculated in subsection (3) of this rule.

(b) Upon making a finding of substantial need to increase its levy by an amount greater than the rate of inflation, the legislative authority of a taxing district may adopt a second ordinance or resolution establishing a limit factor greater than one hundred percent plus inflation. But the substantial need limit factor can never exceed one hundred one percent.

(i) In districts with legislative authorities of four members or less, two-thirds of the members must approve an ordinance or resolution supporting a substantial need to increase the limit factor.

(ii) In districts with more than four members, a majority plus one must approve an ordinance or resolution supporting a substantial need to increase the limit factor.

(3) Calculation of levy limit for all taxing districts other than the state. The amount of regular property taxes that can be levied by a taxing district other than the state in any year ((shall be)) is limited to an amount that will not exceed the amount resulting from the following calculation, except as otherwise provided ((in WAC 458-19-045 (Lid lift))) by statute:

(a) ((Multiply)) The highest amount that could have been lawfully levied by the taxing district (((other than the state))) in any year since 1985 for 1986 collection, multiplied by ((one hundred six percent; add)) the limit factor; plus

(b) A dollar component calculated by multiplying the increase in assessed value of the district from the previous year attributable to new construction, improvements to property, and any increase in the assessed value of state assessed property, by the actual regular property tax levy rate of that district for the preceding year, or the last year the taxing district levied taxes.

(((2))) (4) Calculation of levy limit for the state levy. The ((one hundred six percent)) levy limit for the state ((shall be)) is calculated in the same manner as for other taxing districts except that ((one hundred six percent)) the limit factor is multiplied by the highest amount that was lawfully levied by the state in the three most recent years in which such taxes were levied.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-020, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-025   ((One hundred six percent levy limit -- )) Restoration of regular levy.   (((RCW 84.55.015)))

(1) ((When a taxing district elects to impose a regular property tax levy, after not having imposed such a levy in any one of the three most recent years)) Introduction. This rule explains how a taxing district restores a regular property tax levy if it has not levied since 1985 and it elects to restore a regular property tax levy in accordance with RCW 84.55.015.

(2) Calculation of restored regular levy. If a taxing district has not levied since 1985 and it elects to restore a regular property tax levy, the first regular property tax payable as a result of the restored levy ((shall not)) cannot exceed the lesser of:

(a) The combination of the following:

(i) The amount ((that could have been lawfully levied in 1973)) last levied plus,

(ii) A dollar component calculated by ((adding)) multiplying the increase in assessed value of property in the district attributable to new construction((,)) and improvements to property((, and any increase in the assessed value of state assessed property, starting with 1974)) since the last levy through the current year((. Multiply that total)) by the levy rate that is proposed to be restored. The levy rate that is proposed to be restored ((shall be)) is determined by dividing the total dollar amount ((of the levy that could have been made in 1973)) that was last levied by the district by the current year's assessed value after deducting the accumulated assessed value attributable to new construction((,)) and improvements to property((, and any increase in the assessed value of state assessed property since 1974)) since the last levy; or

(b) The maximum amount which could be lawfully levied by that district in the year ((such a)) the restored levy is proposed, subject to the ((statutory aggregate dollar rate limit, the constitutional limit, and the)) statutory dollar rate limit contained in the taxing district's authorizing statute, without considering the calculation used in subsection (((1))) (2)(a) of this ((section)) rule.

(((c))) (3) Example. Taxing district "A" has not levied a regular levy ((in any of the three most recent years. Taxing district "A" could have)) since 1985 when it levied $10,000 ((in 1973)) based upon ((1973)) 1985 assessed values and all lawful limitations at that time. The total ((of)) increase((s)) since the 1985 assessment year in assessed value of property ((resulting from)) in the district as a result of new construction((,)) and improvements to property((, and increase in the assessed value of state assessed property)) beginning in ((1974)) 1986 through the current assessment year is $3,000,000. The assessed value of taxing district "A" for the current year is $15,000,000. The calculation for (a) of this subsection is as follows:


Current year A.V. - $15,000,000
((Subtract)) Minus increases in new construction((, etc.)) and improvements to property

since ((1973)) 1985 -

- 3,000,000

$12,000,000

((Levy amount allowable)) Amount levied in ((1973)) 1985 - $10,000
Current year A.V. less increases in new

construction and improvements to property -

$12,000,000

Levy rate proposed to be restored - .000833
Increases in new construction((, etc.)) and improvements to property - x $3,000,000
Calculated dollar amount - $2,500
Allowable ((1973)) 1985 levy - + 10,000
Allowable levy for current year

(under (a)) -

$12,500

The amount calculated under (a) of this subsection must be compared to the amount determined under (b) of this subsection and the lesser of the two amounts is the maximum amount that can be levied ((under this section)).

(((2))) (4) Assessor to maintain taxing district records. Records of value increases attributable to new construction((,)) and improvements to property, and increases in the value of state assessed property ((shall)) are to be maintained each year by the county assessor for each taxing district whether or not the district imposes a regular property tax levy.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-025, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-030   ((One hundred six percent)) Levy limit -- Consolidation of districts.   (((RCW 84.55.020)))

(1) Introduction. This rule describes the method used to calculate the first levy for a taxing district created by the consolidation of similar taxing districts in accordance with RCW 84.55.020.

(2) Calculation of the first levy of a consolidated taxing district. The first regular property tax levy made by a taxing district, created by the consolidation of two or more similar taxing districts, ((shall not)) cannot exceed ((one hundred six percent of the following amount)):

(a) The sum of the product of the limit factor multiplied by the highest amount of regular property taxes ((that could have been)) lawfully levied by each of the component districts ((since 1985 for 1986 collection)) during the three most recent years in which taxes were levied; plus

(b) The sum of each of the amounts calculated by multiplying the increase in assessed value of property attributable to new construction((,)) and improvements to property((, and increases in the assessed value of state assessed property)) in each of the component districts ((in)) since the preceding year by the regular property tax rate of each component district in the preceding year.

(((2))) (3) Example. ((Following is an example of the calculation prescribed in subsections (1)(a) and (1)(b) of this section. Taxing district "A" and taxing district "B" consolidate, becoming one taxing district. The highest amount of regular property taxes that could have been lawfully levied by district "A" since 1985 for 1986 collection is $100,000. The highest amount of regular property taxes that could have been lawfully levied by district "B" since 1985 for 1986 collection is $150,000. The increase in assessed value due to new construction, improvements to property, and increase in assessed value of state assessed property in district "A" in the year prior to consolidation was $600,000. The increase in assessed value due to new construction, improvements to property, and increase in assessed value of state assessed property in district "B" in the year prior to consolidation was $900,000. The regular property tax rate for district "A" in the year prior to consolidation was $.50 per $1,000 of assessed value. The regular property tax rate for district "B" in the year prior to consolidation was $.45 per $1,000 of assessed value.)) Taxing district "A" and taxing district "B" consolidate, becoming one taxing district. The highest amount of regular property taxes lawfully levied by district "A" during the three most recent years is $100,000. The highest amount of regular property taxes lawfully levied by district "B" during the three most recent years is $150,000. The increase in assessed value due to new construction and improvements to property in district "A" since the year prior to consolidation was $600,000. The increase in assessed value due to new construction and improvements to property in district "B" since the year prior to consolidation was $900,000. The regular property tax rate for district "A" in the year prior to consolidation was $.50 per $1,000 of assessed value. The regular property tax rate for district "B" in the year prior to consolidation was $.45 per $1,000 of assessed value. Assume the limit factor for this example is 101% because it is the lesser of one hundred one percent and one hundred percent plus the rate of inflation. The maximum amount of regular property taxes that can be levied in the year of consolidation, for taxes payable the following year, by the new consolidated taxing district is calculated as follows:

Highest regular levy
District "A" - $100,000
District "B" - 150,000
Total - $250,000 x ((1.06)) 1.01 = (($265,000)) $252,500
Increases in assessed value multiplied by levy rate:
District "A" - $600,000 x $.50 $1,000 = $300
District "B" - $900,000 x $.45 $1,000 = $405
$705
Maximum regular property taxes that can be levied in the year of consolidation, payable in the year following consolidation:

(($265,000)) $252,500 + $705 = (($265,705)) $253,205

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-030, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-035   ((One hundred six percent)) Levy limit -- Annexation.   (((RCW 84.55.030 and 84.55.110)))

(1) Introduction. One taxing district may annex territory or another dissimilar taxing district from outside the annexing taxing district's boundary. This rule sets forth the method used to calculate the first regular property tax levy made after a taxing district has annexed territory or a dissimilar taxing district in accordance with RCW 84.55.030 and 84.55.110. This rule also explains what occurs when the department of natural resources (DNR) discontinues forest fire patrol assessments on parcels of forest land.

(2) Increase in territory due to annexation. The first regular property tax levy of a taxing district after ((annexation by that district of other)) it annexes territory or a dissimilar taxing district ((shall not)) cannot exceed the amount calculated as follows:

(a) Multiply the highest amount of regular property taxes that could have been lawfully levied since 1985 for 1986 collection, of the annexing district as though no annexation had occurred, by ((one hundred six percent.)) the limit factor as defined in RCW 84.55.005 and WAC 458-19-005;

(b) Multiply the increase in assessed value in the annexing district since the preceding year attributable to new construction, improvements to property, and increase in assessed value of state assessed property by the regular property tax levy rate of the annexing district for the preceding year((.)); and

(c) Multiply the current year assessed value of the annexed territory or district by the levy rate that would have been used for the current year by the annexing district had there been no annexation.

(d) ((Add the amounts calculated in subsections (1)(b) and (1)(c) of this section to the amount determined in subsection (1)(a) of this section.

(2))) Add together the result of each of the calculations set forth in subsection (2)(a), (b), and (c) of this rule to determine the maximum amount of the first regular levy of a taxing district after annexation.

(3) Example. Following is an example of the calculations prescribed in subsection (((1))) (2) of this ((section)) rule. Taxing district "A" annexes a portion of taxing district "B" that takes effect before March 1st in ((1993)) 2002. The highest amount of regular property taxes that could have been levied by district "A" since 1985 for 1986 collection is $100,000. The increase in assessed value from ((1992)) 2001 to ((1993)) 2002 in district "A" due to new construction, improvements to property, and increase in the value of state assessed property is $700,000. The levy rate for district "A" for ((1992)) 2001 was $.50 per $1,000 of assessed value. The ((1993)) 2002 levy rate for district "A", had there been no annexation, would have been $.48 per $1,000 of assessed value. The ((1993)) 2002 assessed value of the portion of taxing district "B" that was annexed by taxing district "A" is $5,000,000, which includes the value of new construction and improvements to property. Assume the levy limit for this example is 101% because it is the lesser of one hundred one percent and one hundred percent plus the rate of inflation. The first regular levy by taxing district "A" after annexation ((shall not)) cannot exceed the amount calculated as follows (((for purposes of this example, "new construction" includes improvements to property and increase in the value of state assessed property))):


District "A" highest levy since 1985 - $100,000

x ((1.06)) 1.01

(($106,000)) $101,000

A.V. of new construction* in district "A" -

District "A" levy rate for ((1992)) 2001 -

Divide by $1,000 -

Levy amount for new construction -

$700,000

x .50

$350,000

1,000

$350

((1993)) 2002 A.V. of annexed portion of district

"B" -

District "A" levy rate that would have been

used in ((1993)) 2002, absent annexation -

Divide by $1,000 -

Levy amount for annexed part of district

"B" -

$5,000,000

x .48

$2,400,000

1,000

$2,400

Maximum levy amount for district "A"

after annexation -

(($106,000)) $101,000

((2,400)) 350

+ ((350)) 2,400

(($108,750)) $103,750


(((3)))* For purposes of this example, "new construction" includes improvements to property and increases in the value of state assessed property.

(4) Loss of territory due to annexation. When a taxing district loses a portion of its territory as a result of annexation to another district, the ((calculation of the one hundred six percent)) levy limit for the taxing district that loses part of its territory is calculated by multiplying the highest amount that could have been lawfully levied by that taxing district since 1985 for 1986 collection by ((one hundred six percent)) the limit factor as defined in RCW 84.55.005 and WAC 458-19-005. However, only the increase in assessed value from the preceding year, attributable to new construction, improvements to property, and increase in assessed value of state assessed property that is actually situated in the remaining territory of the taxing district is added to the amount thus determined, to calculate the ((one hundred six percent)) levy limit. In no case, absent voter approval of an excess levy, can the levy rate ((shall in no case)) exceed the statutory dollar rate limit for that class of taxing district.

(5) Forest fire patrol protection assessments discontinued by DNR - Effect. If an owner of forest land within a forest protection zone neglects or fails to provide adequate fire protection as required by RCW 76.04.600, DNR will provide this protection and impose an annual assessment on each parcel of forest land in accordance with RCW 76.04.610. When DNR discontinues the forest fire patrol assessment by dissolving the forest protection assessment areas and an existing fire district assumes protection services and property tax levying authority for this unimproved land within its existing boundaries, the assessed value of the fire district will increase and effectively be an annexation for property tax purposes. In order to be included in the assessed value of the fire district, all details of the dissolution and annexation must be completed and the county assessor's office must receive formal notice from the fire district and DNR prior to March 1st of the assessment year. This notice must specify the forest fire patrol assessment areas being dissolved, the fire district(s) assuming the levying and fire protection responsibilities, and the forest land impacted by the change.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-035, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-040   ((One hundred six percent)) Levy limit -- Newly formed taxing district.   (((RCW 84.55.035)

The one hundred six percent levy limit does not apply to)) (1) Introduction. This rule explains how the levy limit is determined for any taxing district that is created by means other than by consolidation or annexation.

(2) RCW 84.55.035 specifically states that the first regular levy made by a newly formed taxing district created other than by consolidation or annexation is not subject to the levy limit set forth in chapter 84.55 RCW. The newly formed taxing district may levy up to the lesser of the statutory dollar rate limit for that class of district, or the amount approved by the voters when the district was formed, subject to the statutory aggregate dollar rate limit and the constitutional one percent limit. The second regular levy by the district and all subsequent regular levies are subject to the ((one hundred six percent)) levy limit or, if applicable, the limit described in WAC 458-19-025 regarding the restoration of a regular property tax levy.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-040, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-045   ((One hundred six percent)) Levy limit -- Removal of limit (lid lift).   (((RCW 84.55.050)))

(1) Introduction. The ((one hundred six percent)) levy limit may be exceeded when authorized by a majority of the voters voting on a proposition to "lift the lid" of the ((one hundred six percent)) levy limit in accordance with RCW 84.55.050. This "lid lift" is intended to allow the ((one hundred six percent)) levy limit to be exceeded for the levy made immediately following the vote on the proposition. The purpose of the lid lift is to allow additional property taxes to be collected at a time when the ((statutory aggregate dollar rate limit, the statutory dollar rate limit, and the constitutional limit are not the limitations restricting the raising of additional taxes; the lid lift vote is most effective at a time when the one hundred six percent limit is the limitation that is currently restricting the raising of additional property taxes)) levy limit in chapter 84.55 RCW is the effective legal constraint to the collection of additional property taxes. This rule explains the procedures for implementing a lid lift ballot ((proposition)) measure when a taxing district wants to ask its voters for the authority to exceed the levy limit.

(2) ((Ballot proposition)) Election for approval of lid lift proposition -- when held. The election to approve a lid lift proposition must be held within the taxing district and may be held at the time of a general election, or at a special election called by the governing body of the taxing district for that purpose. ((A simple majority vote is required for approval.)) The election must be held not more than twelve months prior to the date the proposed levy is to be made. For purposes of this rule, a levy is "made" when the taxing district's budget is certified. The ballot title and measure proposing the lid lift is prepared by the county prosecutor or city attorney, as applicable, in accordance with RCW 29.27.066. RCW 29.27.066 requires a ballot title to include a concise description of the measure, not to exceed seventy-five words. A simple majority vote is required for approval of a lid lift.

(3) Ballot title and contents of ballot measure. The text of a ballot title and measure for a lid lift contains the following:

(a) The ((ballot of the proposition shall state the)) dollar rate of the proposed levy so that it reflects the total dollar rate for the taxing district, which ((rate)) may be less than the maximum statutory dollar rate ((limit)) allowed for the particular class of taxing district((.)); and

(b) ((The ballot may contain the following conditions or a combination of them and shall clearly state the conditions that apply)) Any of the following limitations that are applicable:

(i) The ((ballot may limit the)) number of years the increased levy ((will continue)) is to be made by the taxing district; however, if one of the purposes of the increased levy is to make redemption payments on bonds of the taxing district, the duration of the increased levy ((shall not)) cannot exceed nine years; and/or

(ii) The ((ballot may limit the)) purpose or purposes of the increased levy.

(((c) The ballot of the proposition shall be prepared by the county prosecutor or city attorney, as applicable, in accordance with the provisions of RCW 29.27.060.))

(4) Permanent lid lift. (((a))) A permanent lid lift ((is one where)) occurs when the ballot ((of the proposition)) title and the ballot measure contain((s)) none of the ((conditions)) limitations stated in subsection (3)(b) of this ((section)) rule. Approval of a permanent lid lift permanently increases the base used to calculate the levy limit.

(((b))) (a) The first regular levy of a taxing district made after voter approval of a permanent lid lift proposition ((shall be)) is calculated on the basis of the dollar rate stated in the ballot ((proposition)) title, but that dollar rate ((shall be)) is subject to the constitutional one percent limit and the statutory aggregate dollar rate limit and any applicable prorationing.

(((c))) (b) The ((one hundred six percent)) levy limit on regular levies of a taxing district made subsequent to the first regular levy made after voter approval of a permanent lid lift proposition ((shall be)) is calculated ((as stated in WAC 458-19-020; however, instead of)) by multiplying the highest amount that could have been lawfully levied since 1985 ((by one hundred six percent)), including the dollar amount of the regular levy calculated in accordance with (((b))) (a) of this subsection ((is multiplied)) by ((one hundred six percent)) the limit factor.

(5) Temporary lid lift. (((a))) A temporary lid lift ((is one where)) occurs when the ballot ((of the proposition)) title and the ballot measure contain((s)) a time limit ((on)) for the increased levy or contains a limited purpose or purposes for the increased levy, or both.

(((b))) (a) The first regular levy of a taxing district made after voter approval of a temporary lid lift proposition ((shall be)) is calculated on the basis of the dollar rate stated in the ballot ((proposition)) title, but that dollar rate ((shall be)) is subject to the constitutional one percent limit and the statutory aggregate dollar rate limit and any applicable prorationing.

(((c))) (b) The ((one hundred six percent)) levy limit on regular levies of a taxing district made subsequent to the first regular levy made after voter approval of a temporary lid lift proposition ((shall be)) is calculated ((as stated in WAC 458-19-020; however, instead of)) by multiplying ((one hundred six percent by)) the highest amount that could have been lawfully levied since 1985, including the dollar amount of the regular levy calculated in accordance with (((b))) (a) of this subsection ((is multiplied)) by ((one hundred six percent)) the limit factor.

(((d))) (c) After expiration of the time limit authorized or satisfaction of the limited purpose for which the lid lift was authorized, whichever comes first, the levy limit as defined in RCW 84.55.005 on the taxing district's subsequent regular levies ((shall be)) is calculated ((using the maximum amount allowed under the one hundred six percent limit during the years the levies were made under the ballot proposition,)) as if ((there had been no)) the lid lift proposition had not been approved.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-045, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-050   Port district levies.   (1) Introduction. This rule describes the various port district levies and the limitations to which they are subject. Port district levies are not limited by the constitutional one percent limit nor by the statutory aggregate dollar rate limit. As set forth in RCW 84.04.140, all port district levies are regular levies((, by statutory definition (RCW 84.04.140),)) regardless of whether they are voted levies.

(2) Levy for general port purposes. Port districts may annually levy taxes for general port purposes, including the establishment of a capital improvement fund for future capital improvements. This levy ((shall not)) cannot exceed forty-five cents per thousand dollars of assessed value of the port district. This levy may be made without an authorizing vote of the voters of the district.

(3) Levy for bond repayment. Port districts may levy taxes for the purpose of ((payment of)) paying the principal and interest on any general bonded indebtedness of the port district. Even though this levy is not subject to any dollar rate limitation, the limitations on the amount of indebtedness that a port district may incur by contract or borrowing((,)) and the ((one hundred six percent)) levy limit do apply.

(4) Levy for dredging, canal construction, or land leveling or filling purposes. Port districts may annually levy taxes for dredging, canal construction, or land leveling or filling purposes, and the proceeds of any such levy must be used exclusively for ((such)) these purposes. This levy ((shall not)) cannot exceed forty-five cents per thousand dollars of assessed value of the port district. This levy must first be authorized by a ((vote of a)) majority of the ((electors)) voters of the district voting on whether to make such a levy, submitted at an election held under ((the provisions of)) RCW 29.13.020.

(5) Levy for industrial development district purposes. Port districts that have adopted a comprehensive scheme of harbor improvements and industrial development may annually levy taxes to be used exclusively for purposes of industrial development districts as described in chapter 53.25 RCW((; however,)). Any excess revenue collected but not required to complete projects under chapter 53.25 RCW ((shall)) must be used solely ((for the retirement of)) to retire the general obligation bonded indebtedness of the district. This levy ((shall not)) cannot exceed forty-five cents per thousand dollars of assessed value of the port district. This levy need not be authorized by a vote of the people of the district, except as provided in (b) of this subsection.

(a) Levy for limited time period. This levy is limited to a period of ((twelve)) six years ((only)), and a second six years if the procedures in (b) of this subsection are followed. A third six-year period is authorized for a port district located in a county bordering the Pacific Ocean that has adopted a comprehensive scheme of harbor improvements and industrial developments when approved by a simple majority of the voters in the port district.

(b) Notice to be given if levy to last more than six years. If this levy is intended to extend beyond the first six years ((authorized)) these levies were imposed, the port commission ((shall)) must publish notice of this intention, in one or more newspapers of general circulation in the district, after January 1 and not later than June 1 of the year in which the seventh annual levy is to be made. If, within ninety days of the date of publication of this notice, a petition by the required number of registered voters in the port district in accordance with RCW 53.36.100 is filed ((within ninety days of the date of publication of the notice,)) with the county auditor and certified in the manner prescribed in RCW 29.79.200, the proposition to make these levies in the seventh through twelfth year period must be submitted to the voters of the port district at a special election called for this purpose no later than the date on which a primary election would be held under RCW 29.13.070. Levies may be made during the seventh through twelfth years ((may)) only ((be made)) if approved by a majority of the voters of the port district voting on the proposition.

(6) Calculation of the ((one hundred six percent)) levy limit for port districts.

(a) The levies described in subsections (2), (3), and (4) of this ((section)) rule are subject to the ((one hundred six percent)) levy limit. For purposes of ((the calculation of that)) calculating the levy limit, the dollar amount of those levies are combined and the ((one hundred six percent)) levy limit is calculated as provided in WAC 458-19-020.

(b) ((For purposes of the one hundred six percent limit, the levy described in subsection (5) shall be treated in the same manner as though it were a separate regular property tax levy made by or for a separate taxing district. The first levy of a port district under subsection (5) shall not be subject to the one hundred six percent limit.

(7) Limit of indebtedness.

(a) Without voter approval. Port districts, other than those described in (a)(i) and (a)(ii) of this subsection, may contract indebtedness or borrow money in an amount not exceeding one-fourth of one percent of the actual value of the taxable property in the district plus the timber assessed value for the district, as "timber assessed value" is defined in RCW 84.33.035(8), without voter approval.

(i) Port districts having less than eight hundred million dollars in value of taxable property may not incur indebtedness, combined with existing indebtedness not authorized by the voters, in excess of three-eighths of one percent of the value of the taxable property of the district.

(ii) Port districts having less than two hundred million dollars in value of taxable property and operating a municipal airport, may contract indebtedness or borrow money not exceeding an additional one-eighth of one percent of the value of the taxable property of the district above that authorized in (a) and (a)(i) of this subsection, without authorization by the voters.

(b) With voter approval.

(i) Port districts may contract indebtedness or borrow money for district purposes in an amount not to exceed three-fourths of one percent of the taxable value in the district, with the assent of three-fifths of the voters voting at a general or special election called for that purpose.

(ii) Port districts described in (a)(ii) of this subsection may contract indebtedness or borrow money for airport capital improvement purposes up to an additional three-eighths of one percent of the taxable value in the district with the assent of three-fifths of the voters voting at a general or special election called for that purpose, provided the total indebtedness of the district shall not exceed one and one-fourth percent of the taxable property in the district.)) The levy for industrial development district purposes described in subsection (5) will be treated as though it were a separate regular property tax levy made by or for a separate taxing district. The first such levy by a port district is not subject to the levy limit.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-050, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-055   ((One hundred six percent)) Levy limit -- Proration of earmarked funds.   (1) Introduction. ((Certain levies may be "earmarked" for specific purposes even though they are part of, or in addition to, the general regular levy made by a taxing district. This rule describes when and how the levy rate of the earmarked levies may be reduced as a result of the operation of the one hundred six percent levy limit.

(2) Firemen's pension fund. The legislative authority of a city or town having a regularly organized full time, paid, fire department employing firefighters may reduce the levy rate of a levy made under the authority of RCW 41.16.060 allocated to the firemen's pension fund. The levy rate of this levy allocated to this purpose may be reduced in the same proportion as the regular property tax levy rate of such a city or town is reduced by the one hundred six percent limit.

(3) Mental health services levy. Under the authority of RCW 71.20.110, the county legislative authority shall annually levy a tax at a rate of two and one-half cents per thousand dollars of assessed value of the property in the county for the purposes of providing funds for the coordination of community mental retardation and other developmental disability services and to provide community mental retardation, other developmental disability, or mental health services. The levy rate of this levy allocated to these purposes may be reduced in the same proportion as the regular property tax levy rate of the county is reduced by the one hundred six percent limit.

(4) Veteran's assistance fund. Under the authority of RCW 73.08.080, the county legislative authority shall annually levy a tax at a rate not less than one and one-eighth cents per thousand dollars of assessed value of the taxable property of the county, unless a lesser amount is levied as provided in that statute, and not to exceed twenty-seven cents per thousand dollars of assessed value for the purpose of providing revenue for a veteran's assistance fund. The levy rate of this levy allocated to this purpose may be reduced in the same proportion as the regular property tax levy of the county is reduced by the one hundred six percent limit.

(5) Earmarked levies to be reduced only when regular levy affected. The reduction of these earmarked levies, as described in this section, shall only be made when the general regular levy of the taxing district involved is affected by the one hundred six percent levy limit.

(6) Affect of voluntary reduction below one hundred six percent levy limit by taxing district. If a taxing district levying a tax for an earmarked fund voluntarily reduces its regular levy below the maximum levy allowed by the one hundred six percent limit, there shall be no resulting reduction in the levy rate for earmarked funds.)) Certain taxing districts are authorized to make "earmarked" levies for specific purposes. An "earmarked levy" is not a taxing district in and of itself; the levy is included within, or is in addition to, the general regular levy made by a taxing district. Because these levies are generally placed within a taxing district treasury as a separately identified fund, they are often referred to as "earmarked funds." A taxing district is either directed by statute to levy or is authorized by statute to levy, but is not required to levy, for these earmarked funds; that is, some of the underlying statutes are mandatory while others are permissive in nature. This rule only discusses those taxing districts with the statutory authority to reduce their earmarked levies from their budgeted levy amount when they are up against their general levy limit; that is, the levy limit contained in chapter 84.55 RCW. Only those taxing districts having specific authorization to reduce the earmarked levy as a result of the levy limit under this chapter are addressed in this rule.

(2) Earmarked funds to be reduced only when regular levy affected. Cities having a regularly organized full-time, paid, fire department may levy an additional amount for a firemen's pension fund under RCW 41.16.060. Counties are required to annually levy amounts for the developmental disabilities or mental health services fund under RCW 71.20.110 and for veteran's assistance fund under RCW 73.08.080. These earmarked levies may be reduced if the taxing district's general regular levy is restricted by the levy limit contained in chapter 84.55 RCW. If a reduction is necessary, the earmarked levy may be reduced from its budgeted levy amount in the same proportion as the district's general levy is reduced from its budgeted amount.

In other words, if the taxing district is unable to levy its total budgeted amount because it is restricted by the levy limit under chapter 84.55 RCW, the amount levied for the earmarked fund may be reduced proportionately to the reduction in the taxing district's general regular levy. For example, if the overall budget of the county or city/town is limited by the levy limit, and that levy includes specific amounts earmarked for special purposes, the county or city/town may take the total amount it receives from property taxes and allocate "x" amount to the earmarked fund and the remainder to its general purposes.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-055, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-060   Emergency medical service levy.   (((RCW 84.52.069)))

(1) Introduction. ((The emergency medical service (EMS) levy is a regular levy approved by a super majority of registered voters at a general or special election held in accordance with the provisions of RCW 84.52.069. The ballot proposition shall conform to the provisions of RCW 29.30.111. Only a county, emergency medical service district, city, town, public hospital district, or fire protection district is authorized to impose a regular levy for emergency medical care or emergency medical services. The EMS levy, in each year for six consecutive years, shall not exceed fifty cents per thousand dollars of assessed value of the property of the taxing district.

(2) County-wide EMS levy. A county-wide EMS levy shall not be placed on the ballot without first obtaining the approval of the legislative authority of any city within the county having a population exceeding fifty thousand. No other taxing district within the county may hold an election on a proposed EMS levy at the same time as the election on a proposed county-wide EMS levy. To the extent feasible, emergency medical care and services shall be provided throughout the county whenever the county levies an EMS levy. In addition, if a county levies an EMS levy, the following conditions apply:

(a) A taxing district within the county, authorized to levy an EMS levy may do so, but only if the taxing district's EMS levy rate does not exceed the difference between the county's EMS levy rate and fifty cents per thousand dollars of assessed value of the property of the taxing district; and

(b) When a taxing district within the county levies an EMS levy and the voters of the county subsequently approve an EMS levy, then the taxing district shall reduce its EMS levy rate to the extent the combined EMS levy rate of the county and the taxing district exceeds fifty cents per thousand dollars of assessed value in the taxing district; and

(c) An EMS levy of a taxing district within the county, authorized by the voters subsequent to an EMS levy by a county, shall expire concurrently with the county EMS levy.

(3) EMS levy of taxing district other than county. If a taxing district within the county, authorized to levy an EMS levy has done so, no other taxing district, other than the county, may concurrently levy an EMS levy within the boundaries of the taxing district.

(4) EMS levy -- constitutional one percent limit. In the event that a reduction of the EMS levy rate is required under the constitutional one percent limit, it shall be reduced in accordance with the procedure specified in WAC 458-19-075.

(5) EMS levy -- one hundred six percent limit. The one hundred six percent levy limit does not apply to the first EMS levy following authorization by the voters, but does apply to each EMS levy made in the next five years or until the EMS levy is reauthorized by the voters. The EMS levy shall be calculated separately from a taxing district's regular levy for purposes of calculating the one hundred six percent limit.)) This rule explains the criteria contained in RCW 84.52.069 relative to a taxing district imposing a limited or permanent regular levy for emergency medical care or emergency medical services. It describes the permitted duration of this levy, the ballot title and measure that must be presented to and approved by the voters, the maximum rate for this levy, and the applicable limits.

(2) Purpose - voter approval required - who may levy. An emergency medical service (EMS) levy is a regular voter approved levy. Any taxes collected as a result of this levy can only be used to provide emergency medical care or emergency medical services, including related personnel costs, training for such personnel and related equipment, supplies, vehicles, and structures needed to provide this care or service. An EMS levy must be approved by a super majority of registered voters at a general or special election. Only a county, emergency medical service district, city, town, public hospital district, urban emergency medical service district, or fire protection district is authorized to impose an EMS levy.

(3) Duration - maximum rate. An EMS levy is imposed each year for six consecutive years, each year for ten consecutive years, or permanently. If approved, a taxing district can impose a regular property tax levy in an amount that cannot exceed fifty cents per thousand dollars of assessed value of the property of the taxing district.

(4) Contents of ballot title and measure. Any ballot title and measure seeking authorization of an EMS levy must conform to the requirements of RCW 29.30.111. A taxing district cannot submit to the voters at the same election multiple propositions to impose a levy under RCW 84.52.069. If the approved ballot title and measure did not authorize the maximum allowable levy rate (fifty cents) for the EMS levy, any future proposition to increase the rate up to the maximum allowable must be specifically authorized by voters at a general or special election. That is, a taxing district may impose a levy rate up to, but no greater than, the rate contained in the approved ballot measure without obtaining additional voter approval. The ballot title and measure authorizing a taxing district to impose:

(a) An EMS levy for a limited duration must state the name of the taxing district, the maximum rate per thousand dollars of assessed value to be imposed, and the maximum number of years the levy is to be allowed; or

(b) A permanent EMS levy must state the name of the taxing district and the maximum rate per thousand dollars of assessed value to be permanently imposed. A ballot title for this type of levy must include wording to indicate that it is a permanent EMS levy. A taxing district that seeks to impose a permanent levy must also provide for a referendum procedure to apply to the ordinance or resolution imposing the tax. The detailed specifics of this procedure are set forth in RCW 84.52.069(4).

(5) County-wide EMS levy. A county-wide EMS levy cannot be placed on the ballot without first obtaining the approval of the legislative authority of any city within the county having a population exceeding fifty thousand. No other taxing district within the county may hold an election on a proposed EMS levy at the same time as the election on a proposed county-wide EMS levy. To the extent feasible, emergency medical care and services must be provided throughout the county whenever the county levies an EMS levy. In addition, if a county levies an EMS levy, the following conditions apply:

(a) Any other taxing district within the county, authorized to levy an EMS levy may do so, but only if the taxing district's EMS levy rate does not exceed the difference between the county's EMS levy rate and fifty cents per thousand dollars of assessed value of the property of the taxing district; and

(b) When a taxing district within the county levies an EMS levy and the voters of the county subsequently approve a county-wide EMS levy, the taxing district must then reduce its EMS levy rate so that the combined EMS levy rate of the county and the taxing district does not exceed fifty cents per thousand dollars of assessed value in the taxing district; and

(c) An EMS levy of limited duration of a taxing district within the county, authorized by the voters subsequent to a county-wide EMS levy of limited duration, will expire concurrently with the county EMS levy.

(6) EMS levy of taxing district other than county. Once a taxing district that has the authority to levy an EMS levy has done so within the county, only the county may concurrently levy an EMS levy within the boundaries of that taxing district; all other taxing districts are prohibited from levying an EMS levy within that taxing district's boundaries while it collects an EMS levy.

(7) Constitutional one percent limit is applicable. An EMS levy is subject to the constitutional one percent limit for regular property taxes. If a reduction of the rate of an EMS levy is required because this limit is exceeded, it is to be reduced in the manner set forth in RCW 84.52.010(1) and WAC 458-19-075.

(8) Statutory aggregate dollar rate limit is not applicable. An EMS levy is not subject to the statutory aggregate dollar rate limit of five dollars and ninety cents per thousand dollars of assessed value (see RCW 84.52.043).

(9) Applicability of limit factor to EMS levy. The first year an EMS levy is made following voter approval, the levy limit set forth in RCW 84.55.010 does not apply. However, after the first year any EMS levy made is subject to this limit. In other words, beginning the second year this levy is made it cannot exceed the limit factor multiplied by the highest amount of regular property taxes that could have lawfully been levied since the voters last approved such a levy plus an additional dollar amount calculated by multiplying the increase in assessed value in that district resulting from new construction, improvements to property, and any increase in the assessed value of state-assessed property by the regular property tax rate for the district in the preceding year. The EMS levy is calculated separately from any other levies made by the taxing district for purposes of calculating the levy limit.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-060, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-065   ((One hundred six percent)) Levy limit -- Protection of future levy capacity.   (1) Introduction. This rule explains what occurs when a taxing district levies taxes in an amount less than the maximum allowed under the levy limit for any year and how future levies of the district will be calculated.

(2) Use of maximum lawful levy amount. In any year when a taxing district other than the state levies taxes in an amount less than the maximum amount allowed by the ((one hundred six percent)) levy limit, whether voluntarily or as a result of the operation of the statutory aggregate dollar rate limit or constitutional one percent limit reducing or eliminating the taxing district's levy rate, the ((one hundred six percent)) levy limit for succeeding years after 1985 will be calculated as though the maximum lawful levy amount allowed by the ((one hundred six percent)) levy limit or the taxing district's statutory dollar rate limit had been levied.

(((2))) (3) Examples.

(((a) ())These examples do not include any amounts for new construction, improvements to property, or increases in the value of state assessed property.(()))

(a) In ((1993)) 2001, the highest amount of regular property taxes that could have been lawfully levied by taxing district "A" as restricted by the ((one hundred six percent)) levy limit was $100,000. But in ((1993)) 2001 taxing district "A" is otherwise limited by the statutory aggregate dollar rate limit to a maximum levy of $95,000. The ((one hundred six percent)) levy limit for the ((1994)) 2002 levy will be calculated on the basis of what could have been the highest levy amount ((for 1994)) since 1985, that is $100,000 ((x 1.06 = $106,000; not $95,000 x 1.06 = $100,700)) multiplied by the limit factor. The amount actually levied in ((1993)) 2001 is not controlling.

(b) ((In this same)) Using the same basic facts from the previous example, if the levy amount of district "A" had been limited by the statutory dollar rate limit in ((1993)) 2001 to $95,000, and $95,000 was the highest amount of regular property taxes that could have been lawfully levied since 1985, then the ((one hundred six percent)) levy limit for ((1994 would)) 2002 will be calculated on the basis of $95,000, that is $95,000 ((x 1.06 = $100,700)) multiplied by the limit factor.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-065, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-070   Procedure to adjust consolidated levy rate for taxing districts when ((limits)) the statutory aggregate dollar rate limit is exceeded.   (((RCW 84.52.010 and 84.52.050)

(1) Introduction. The aggregate of all regular levy rates of junior taxing districts and senior taxing districts other than the state, shall not exceed five dollars and ninety cents per thousand dollars of assessed value. The aggregate of all regular tax levies by the state and all taxing districts other than port districts or public utility districts shall not exceed one percent of the true and fair value of any taxable property. When the county assessor finds that either of these limits has been exceeded, the assessor shall recompute the levy rate and establish a new consolidated levy rate in the following manner:

(2) Beginning with the five dollar and ninety cents per thousand dollars of assessed value consolidated levy rate limit, subtract the levy rates of the county and the county road district if the tax code area includes the unincorporated portion of the county, or the levy rates of the county and the city or town if the tax code area includes an incorporated area, as applicable. The levy rate reductions or eliminations shall be made on a pro rata basis within each tier and, as necessary, proceeding until the consolidated levy rate no longer exceeds either of the two limits, beginning with:

(a) The levy rates, if any, by a park and recreation district under RCW 36.69.145, a park and recreation service area under RCW 36.68.525, and a cultural arts, stadium and convention district under RCW 67.38.130;

(b) The levy rate, if any, by a flood control zone district under RCW 86.15.160;

(c) The levy rates, if any, by all other junior taxing districts, except fire protection districts, library districts, and the first fifty cents per thousand dollars of assessed valuation levies for metropolitan park districts and public hospital districts;

(d) The levy rates, if any, by fire protection districts as authorized by RCW 52.16.140 and 52.16.160; and

(e) The levy rates, if any, by fire protection districts as authorized by RCW 52.16.130, library districts, and the first fifty cents per thousand dollars of assessed valuation levies for public hospital districts and metropolitan park districts.

(3) Example.

ORIG PRO- FINAL
LEVY RATE LEVY
DISTRICT
RATE
FACTOR
RATE
County 1.8000 NONE 1.8000
Road 2.2500 NONE 2.2500
Library .5000 NONE .5000
Fire .7000 NONE .7000
Hospital .5000 NONE .5000
Cemetery .1125 .4138 .0466
Hospital .2500 .4138 .1034
Totals 6.1125 5.9000

Beginning with the limit of $5.90, subtract the original levy rates for the county and county road taxing districts, leaving $1.85 available. Subtract $1.70 for the library's $.50, the fire district's $.70 and the hospital's $.50, leaving $.15 available to be shared by the cemetery's $.1125 and the hospital's $.25. The proration factor is arrived at by dividing the amount available ($.15) by the original amount ($.3625) within that tier ((c) of subsection (2) of this section) resulting in a proration factor of .4138. This factor is then applied to the original levy rates in this tier of $.1125 and $.25 for the cemetery and hospital respectively.)) (1) Introduction. The aggregate of all regular levy rates of junior taxing districts and senior taxing districts, other than the state and other specifically identified districts, cannot exceed five dollars and ninety cents per thousand dollars of assessed value in accordance with RCW 84.52.043. When the county assessor finds that this limit has been exceeded, the assessor recomputes the levy rates and establishes a new consolidated levy rate in the manner set forth in RCW 84.52.010. This rule describes the prorationing process used to establish a consolidated levy rate when the assessor finds the statutory aggregate levy rate exceeds five dollars and ninety cents. If prorationing is required, the five dollar and ninety cents limit is reviewed before the constitutional one percent limit.

(2) Levies not subject to statutory aggregate dollar rate limit. The following levies are not subject to the statutory aggregate dollar rate limit of five dollars and ninety cents per thousand dollars of assessed value:

(a) Levies by the state;

(b) Levies by or for port or public utility districts;

(c) Excess property tax levies authorized in Article VII, section 2 of the state Constitution;

(d) Levies for acquiring conservation futures under RCW 84.34.230;

(e) Levies for emergency medical care or emergency medical services imposed under RCW 84.52.069;

(f) Levies to finance affordable housing for very low income households under RCW 84.52.105; and

(g) The portion of metropolitan park district levies protected under RCW 84.52.120.

(3) Prorationing under consolidated levy rate limitation. RCW 84.52.010 sets forth the prorationing order in which the regular levies of taxing districts will be reduced or eliminated by the assessor to comply with the statutory aggregate dollar rate limit of five dollars and ninety cents per thousand dollars of assessed value. The order contained in the statute lists which taxing districts are the first to either reduce or eliminate their levy rate. Taxing districts that are at the same level within the prorationing order are grouped together in tiers. Reductions or eliminations in levy rates are made on a pro rata basis within each tier of taxing district levies until the consolidated levy rate no longer exceeds the statutory aggregate dollar rate limit of five dollars and ninety cents.

As opposed to the order contained in RCW 84.52.010, which lists the taxing districts that are the first to have their tax rates reduced or eliminated, this rule is written in reverse order; that is, it lists the taxing districts that must be first either fully or partially funded. If the statutory aggregate dollar rate is exceeded, then the levy rates for taxing districts within a particular tier must be reduced or eliminated on a pro rata basis. The proration factor, which is multiplied by each levy rate within the tier, is obtained by dividing the dollar rate remaining available to the taxing districts in that tier as a group by the sum of the levy rates originally certified by or for all of the taxing districts within the tier.

(a) Step one: Total the aggregate levy rates requested by all affected taxing districts in the tax code area. If this total is less than five dollars and ninety cents per thousand dollars of assessed value, no prorationing is necessary. If this total is more than five dollars and ninety cents, the assessor must proceed through the following steps until the aggregate dollar rate is brought within that limit.

(b) Step two: Subtract from $5.90 the levy rates of the county and the county road district if the tax code area includes an unincorporated portion of the county, or the levy rates of the county and the city or town if the tax code area includes an incorporated area, as applicable.

(c) Step three: Subtract from the remaining levy capacity the levy rates, if any, by fire protection districts under RCW 52.16.130, library districts, the first fifty cents per thousand dollars of assessed valuation for public hospital districts, and the first fifty cents per thousand dollars of assessed valuation for metropolitan park districts created before January 1, 2002.

(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.

(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.

(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step four.

(d) Step four: Subtract from the remaining levy capacity the levy rates, if any, by fire protection districts under RCW 52.16.140 and 52.16.160.

(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.

(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.

(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step five.

(e) Step five: Subtract from the remaining levy capacity the levy rate, if any, of the fifty cents per thousand dollars of assessed valuation for metropolitan park districts created on or after January 1, 2002.

(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.

(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.

(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step six.

(f) Step six: Subtract from the remaining levy capacity the twenty-five cent levy for metropolitan park districts if it is not protected under RCW 84.52.120, the twenty-five cent levy for public hospital districts under RCW 70.44.060, and the levy rates, if any, for all other junior taxing districts if those levies are not listed in steps three through five or seven or eight of subsection (3) of this rule.

(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.

(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.

(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step seven.

(g) Step seven: Subtract from the remaining levy capacity the levy rate, if any, by a flood control zone district under RCW 86.15.160.

(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.

(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.

(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step eight.

(h) Step eight: Subtract from the remaining levy capacity the levy rates, if any, of a park and recreation district under RCW 36.69.145, a park and recreation service area under RCW 36.68.525, a cultural arts, stadium and convention district under RCW 67.38.130, and a city transportation authority under chapter 248, Laws of 2002 on a pro rata basis until the remaining levy capacity equals zero.

(4) Example.

DISTRICT ORIGINAL LEVY RATE PRORATION FACTOR FINAL LEVY RATE REMAINING LEVY CAPACITY
County Road 1.8000

2.2500

NONE

NONE

1.8000

2.2500

1.850

Library

Fire

Hospital

.5000

.5000

.5000

NONE

NONE

NONE

.5000

.5000

.5000

.350

Fire .2000 NONE .2000 .150
Cemetery

Hospital

.1125

.2500

.4138

.4138

.0466

.1034

Totals 6.1125 5.90

1. Beginning with the limit of $5.90, subtract the original certified levy rates for the county and county road taxing districts leaving $1.85 available for the remaining districts.

2. Subtract the total of the levy rates for each district within the next tier: The library's $.50, the fire district's $.50 and the hospital's $.50 = $1.50, which leaves $.35 available for the remaining districts.

3. Subtract the fire district's additional $.20 levy rate, which leaves $.15 available for the remaining districts.

4. The remaining $.15 must be shared by the cemetery and the hospital districts within the next tier of levies. The cemetery district originally sought to levy $.1125 and the hospital district sought to levy $.25. The proration factor is arrived at by dividing the amount available ($.15) by the original levy rates ($.3625) requested within that tier resulting in a proration factor of .4138. And finally, the original levy rates in this tier of $.1125 and $.25 for the cemetery and hospital respectively are multiplied by the proration factor.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-070, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-075   Constitutional one percent ((levy)) limit calculation.   (1) Introduction. The total amount of all regular property tax levies that can be applied ((to)) against taxable property is limited to ((no more than)) one percent of the true and fair value of ((such)) the property in money. The one percent limit is stated in Article VII, section 2 of the state Constitution and the enabling statute, RCW 84.52.050. The constitutional one percent limit is based upon the amount of taxes actually levied on the true and fair value of ((such)) the property, not the dollar rate used in computing ((those)) property taxes. ((In order)) This rule explains how to determine if the constitutional one percent limit is being exceeded and the sequence in which levy rates will be reduced or eliminated in accordance with RCW 84.52.010 if the constitutional one percent limit is exceeded. The constitutional one percent calculation is made after the assessor ensures that the statutory aggregate dollar rate limit is not exceeded.

(2) Preliminary calculations. To determine ((whether)) if the constitutional one percent limit is being exceeded, the following calculations are made:

(((2))) (a) First, add all the regular levy rates in the tax code area, including the state school levy at the local rate, any conservation futures levy imposed ((pursuant to)) under RCW 84.34.230, any emergency medical service levy imposed ((pursuant to)) under RCW 84.52.069, any metropolitan park district levy protected under RCW 84.52.120, and any affordable housing levy imposed ((pursuant to)) under RCW 84.52.105 to arrive at a combined levy rate for that tax code area. The levy rate for ((a)) any port or public utility district is not included in this computation as they are not subject to the constitutional one percent limit.

(((3))) (b) Second, multiply the ((sum)) combined levy rate obtained in subsection (2)(a) of this ((section)) rule by the higher of the real or personal property ratio of the county for ((that levy)) the assessment year in which the levy is made to determine the effective ((one percent)) levy rate. If the ((sum of the)) effective regular levy rate((s)) exceeds ten dollars per thousand dollars of assessed value, the individual levy rates ((shall)) must be reduced or eliminated until the ((sum)) effective levy rate is equal to ten dollars per thousand dollars of assessed value((, in the following sequence:

(a) The levy rates, if any, for conservation futures under RCW 84.34.230, for affordable housing under RCW 84.52.105, and any portion of a levy for emergency medical services under RCW 84.52.069 in excess of thirty cents shall be reduced on a pro rata basis or eliminated.

(b) The levy rates, if any, by a park and recreation district under RCW 36.69.145, a park and recreation service area under RCW 36.68.525, and a cultural arts, stadium and convention district under RCW 67.38.130 shall be reduced on a pro rata basis or eliminated.

(c) The levy rate, if any, by a flood control zone district under RCW 86.15.160 shall be reduced or eliminated.

(d) The levy rates, if any, by all other junior taxing districts, except fire protection districts, library districts, and the first fifty cents per thousand dollars of assessed valuation levies for metropolitan park districts and public hospital districts shall be reduced on a pro rata basis or eliminated.

(e) The levy rates, if any, by fire protection districts under RCW 52.16.140 and 52.16.160 shall be reduced on a pro rata basis or eliminated.

(f) The levy rates, if any, by fire protection districts under RCW 52.16.130, library districts under RCW 27.12.050 and [27.12.]150, and the first fifty cents per thousand dollars of assessed valuation levies for public hospital districts under RCW 70.44.060(6) and metropolitan park districts under RCW 35.61.210 shall be reduced or eliminated.

(g) The remainder of the levy rate, if any, after the reduction pursuant to (a) of this subsection, for emergency medical services shall be reduced or eliminated.

(h) The levy rates, if any, by the county, county road, and a city or town shall be reduced or eliminated.

(i) The levy rate, if any, by the state, for the support of common schools shall be reduced)).

(3) Prorationing - constitutional one percent limit. RCW 84.52.010 sets forth the prorationing order in which levy rates are to be reduced or eliminated when the constitutional one percent limit is exceeded. The order contained in this statute begins with the taxing districts that are the first to have their levy rates either reduced or eliminated. Taxing districts that are at the same level within the prorationing order are grouped together in tiers. Levy rates are reduced or eliminated on a pro rata basis within each tier of taxing district levies until the combined levy rate no longer exceeds one percent of the true and fair value of property.

If the constitutional one percent limit is exceeded, the following levies are to be reduced or eliminated in the following order until the effective rate no longer exceeds ten dollars per thousand dollars of assessed value:

(a) The twenty-five cent levy for metropolitan park district protected under RCW 84.52.120.

(b) The levy rates for conservation futures under RCW 84.34.230, for affordable housing under RCW 84.52.105, and any portion of a levy for emergency medical services under RCW 84.52.069 in excess of thirty cents per thousand dollars of assessed value are reduced on a pro rata basis or eliminated.

(c) The levy for the first thirty cents per thousand dollars for emergency medical services under RCW 84.52.069.

(d) The levy rates for a park and recreation district under RCW 36.69.145, a park and recreation service area under RCW 36.68.525, a cultural arts, stadium and convention district under RCW 67.38.130, and a city transportation authority under section 11, chapter 248, Laws of 2002, are reduced on a pro rata basis or eliminated.

(e) The levy rate for a flood control zone district under RCW 86.15.160.

(f) The levy rates for all other junior taxing districts, except fire protection districts, library districts, and the first fifty cents per thousand dollars of assessed valuation for metropolitan park districts, and the first fifty cents per thousand dollars of assessed valuation for public hospital districts are reduced on a pro rata basis or eliminated.

(g) The levy rate of fifty cents per thousand dollars of assessed valuation for metropolitan park districts created on or after January 1, 2002.

(h) The levy rates for fire protection districts under RCW 52.16.140 and 52.16.160 are reduced on a pro rata basis or eliminated.

(i) The levy rates for fire protection districts under RCW 52.16.130, library districts under RCW 27.12.050 and 27.12.150, the first fifty cents per thousand dollars of assessed valuation for public hospital districts under RCW 70.44.060(6), and the first fifty cents per thousand dollars of assessed valuation for metropolitan park districts under RCW 35.61.210 created before January 1, 2002, are reduced on a pro rata basis or eliminated.

(j) The levy rates for the county, county road, and a city or town are reduced on a pro rata basis or eliminated.

(k) The levy rate for the state for the support of common schools.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-075, filed 3/14/94, effective 4/14/94.]


AMENDATORY SECTION(Amending WSR 94-07-066, filed 3/14/94, effective 4/14/94)

WAC 458-19-080   City annexed by fire protection and/or library districts.   (((RCW 52.04.081 and 27.12.390)))

(1) Introduction. When a city or town is annexed to a fire protection and/or a library district, the city or town is ((authorized)) entitled under RCW 52.04.081 and 27.12.390 to levy up to three dollars and sixty cents per thousand dollars of assessed value less the regular levy made by the fire protection and/or library district. However, the limitations upon regular property taxes imposed by chapter 84.55 RCW are still applicable. This rule explains how the first levy following annexation is calculated, how the levy limit is calculated, and the order of any prorationing that may be required.

(2) The assessor ((shall)) will calculate the first levy following annexation as follows:

(a) Calculate the levy and rate for the fire protection and/or library district, including the assessed value of the annexed city or town; and

(b) Subtract the fire protection and/or library district levy rate from the statutory rate ($3.60 per $1,000 A.V.) of the city or town. The resulting rate is the maximum levy rate for the city or town even if the fire and/or library district rate is later reduced as a result of prorationing ((pursuant to)) under RCW 84.52.010 to prevent the consolidated levy rate from exceeding the statutory aggregate dollar rate limit or the constitutional one percent limit.

(((2) Calculate the one hundred six percent levy limit for the city or town independently of the calculations performed in subsection (1) of this section.))

(3) Levy limit calculation. The levy limit for the city or town is calculated independently of the calculation performed in subsection (2) of this rule.

(4) Subtraction of fire protection or library district levy rate. The fire protection and/or library district levy rate is subtracted from the city or town statutory levy rate before any prorated reduction under RCW 84.52.010.

[Statutory Authority: RCW 84.55.060 and 84.08.070. 94-07-066, 458-19-080, filed 3/14/94, effective 4/14/94.]


NEW SECTION
WAC 458-19-085   Refunds -- Procedures -- Applicable limits.   (1) Introduction. Chapters 84.68 and 84.69 RCW both set out procedures and conditions under which property taxes are refunded. This rule explains the differences between the types of refunds authorized under each chapter, the procedures related to the refunds, and the effect the refunds have on levy limits and the levy setting process in general.

(2) Court ordered refunds under chapter 84.68 RCW - County tax refund fund levy. Any person who believes that the taxes levied against their property are unlawful or excessive may pay the taxes under protest, setting forth all the grounds upon which the tax is claimed to be unlawful or excessive, and bring an action in superior court or in any federal court of competent jurisdiction against the state, county, or municipality. RCW 84.68.020. If the court determines that the taxes were indeed unlawful or excessive, it will enter a judgment in favor of the taxpayer who paid the tax under protest and determine the amount to be refunded to the taxpayer. When such a judgment is entered, the law provides a specific procedure for refunding the money to the taxpayer in RCW 84.68.030 and for taxing districts to generate the moneys to be refunded in RCW 84.68.040. Any and all taxing districts that were levying taxes against the property at the time for which a refund is directed by court order under RCW 84.68.020 must levy, or have levied for them, an amount for the county tax refund fund. The county tax refund fund is a regular levy that is subject to all the applicable levy limitations provided in law for regular levies. However, the law specifically exempts a refund fund levy from the levy limit set forth in RCW 84.55.010.

(a) Method used to make refunds. When a court judgment is entered in favor of a taxpayer, RCW 84.68.030 states that the refund is to be paid via warrants drawn against the "county tax refund fund." If, at the time the judgment is entered, there are no moneys in that fund, then the warrants bear interest and are "callable under such conditions as are provided by law for county warrants."

(b) Process used to generate funds for the county tax refund fund. RCW 84.68.040 provides that as part of the annual levying of taxes for county purposes, the county is required to make and enter a tax levy or levies for the county tax refund fund. The purpose of the refund fund levy is to produce moneys to be deposited into a fund from which a taxpayer, who paid taxes that were later adjudged to be unlawful or excessive, can be repaid, without unduly affecting the operating funds of the taxing districts. This levy has precedence over all other tax levies for county and/or taxing district purposes.

(c) Who makes and enters the tax levies for the refund fund levy? Officers of local taxing districts, the county legislative authority, the county assessor, and any other person or entity that would normally be involved in the levy making process are required to make and enter the refund fund levy. However, if a taxing district is required to levy for the county tax refund fund and fails to do so, or if a taxing district is required to levy for the county tax refund fund and does not have a regular nonvoted levy, then the county legislative authority levies the tax for or on behalf of the district, the assessor sets the rate, and the treasurer collects the tax.

(d) What limitations apply to the county tax refund fund levy? There are four basic levy limitations that need to be taken into consideration: The levy limit set forth in RCW 84.55.010; the constitutional (Article VII, section 2) and statutory (RCW 84.52.010) one percent limit; the statutory dollar rate limit for the various taxing districts; and the aggregate dollar rate limit contained in RCW 84.52.043.

(i) The levy limit set forth in RCW 84.55.010 does not apply to the county tax refund fund levy, regardless of which taxing district is involved (see RCW 84.55.070). Therefore, a taxing district(s) can levy the amount to be refunded even if that amount will cause the total levy of the taxing district to exceed the levy limit. For example, a court orders County A to refund $10,000 to a Taxpayer. The proper county officials in County A must determine what portion of the $10,000 is attributable to Taxing District No. 1. For purposes of this example, Taxing District No. 1 owes the Taxpayer $1,000. Taxing District No. 1's levy last year was $30,000. Without considering new construction, improvements to property, and increase in value of state assessed property the levy for this year under the levy limit would be $30,300. However, Taxing District No. 1's levy for this year, including the refund fund levy, can be $31,300.

(ii) The constitutional one percent limit, the statutory dollar rate limit, and the aggregate dollar rate limit apply to any refund fund levy. Consequently, any refund fund levy must be contained within the maximum dollar rate authorized by law for any taxing district. For example, if under the levy limit, the county current expense levy rate is $1.80/$1,000 and the refund fund levy rate is $.10/$1,000 A.V., then only $1.70 may go to the current expense fund. Similarly, if the current expense levy rate, as limited by the levy limit, is $1.50/$1,000 A.V., then the $.10/$1,000 is added to the $1.50 making a levy rate that is $1.60/$1,000 A.V. Any combination is possible as long as the total of the two does not exceed the statutory dollar rate maximum of $1.80/$1,000 A.V. for levies made for county purposes. All moneys levied for the county tax refund fund levy are allocated first, without consideration of any delinquency, and then whatever balance is remaining goes to the district's operating fund.

(e) Refund fund's relationship to excess levies. Because the refund fund levy is the direct result of a court ordered judgment in a specific amount, it does not matter whether the judgment amount is derived from taxes paid on regular, excess, or bond levies, or any combination of these levies. The refund fund levy is separate and independent of the levies from which it arose. The levy includes an additional amount deemed necessary to meet the obligations of the county tax refund fund, taking into consideration the probable portions of the taxes that will not be collected or collectible during the year in which they are due and payable, as well as any unobligated cash in hand in this fund.

(f) Applicability to school district levies and state school levy. All taxing districts for which, and within which, taxes were collected unlawfully are required to levy for the refund fund. A refund fund for the school district would not be limited by a dollar rate limit. However, the school district refund fund levy would be subject to the constitutional one percent limit because the refund fund is a regular levy subject to all applicable limits. The state school levy will include a refund fund levy, which will be calculated by the department at the time it levies the state school levy. The state, as a taxing district itself, follows the same procedures that apply to any other taxing district, to the extent that those procedures are applicable.

(g) Separate account in county treasury. The county treasurer must keep a separate account for each district for which a refund fund is created and can only disburse money from that account to the taxpayer(s) entitled to receive a court ordered refund.

(3) Administrative refunds under chapter 84.69 RCW. Property taxes may be refunded on the order of the county treasurer before or after delinquency if the property taxes were paid under one of the circumstances listed in RCW 84.69.020. These circumstances include errors, changes in valuation or status by a county board of equalization or the state board of tax appeals, and delays in applying for a senior citizen exemption or deferral.

(a) Levy limit set forth in RCW 84.55.010 does not apply. RCW 84.55.070 states that the limitations contained in chapter 84.55 RCW do not apply to property tax refunds paid or to be paid under the provisions of chapter 84.69 RCW. Therefore, an amount necessary to fund any refund paid in accordance with RCW 84.69.020 may be added to the levy for a taxing district without regard to the levy limit. A refund fund levy is not subject to the levy limit. However, the statutory dollar rate limit still applies to each taxing district, as well as the five dollar and ninety cent limit set forth in RCW 84.52.043 and the constitutional one percent limit set forth in Article VII, section 2 of the state Constitution and RCW 84.52.050.

(b) Refunds include interest. Refunds authorized under RCW 84.69.020 must include interest that is payable from the time the taxes were paid. The rate of interest is calculated in accordance with RCW 84.69.100, established annually by the department, and published in WAC 458-18-220.

(c) Examples. Both examples assume that the base for computing the allowable levy is $10,000 and refer to the county current expense levy rate that may not exceed one dollar and eighty cents per thousand dollars of assessed value in accordance with RCW 84.52.043.

(i) Statutory rate requested does not exceed the dollar rate allowable:


The allowable levy for the county current expense fund

$10,000

Refunds paid or to be paid 2,000
Total amount of levy $12,000
Assessed value $7,000,000
Levy rate $1.714/$1,000
The levy rate is within the statutory rate limit of $1.80/$1,000

(ii) Statutory rate requested exceeds the dollar rate allowable:


Allowable levy $10,000
Refunds paid or to be paid 2,000
Total amount of levy $12,000
Assessed value $6,500,000
Levy rate $1.846/$1,000
The dollar rate cannot exceed $1.80/$1,000; therefore, the maximum that can be levied is $6,500,000 x $1.80/$1,000

$11,700

Amount to be refunded $2,000
Amount to be credited to current expense $9,700

(d) The base for computing the following year's levy limit does not include the refund levy amount. In the preceding examples, the base for the following year's levy limit calculation is $10,000. However, when calculating the additional levy amount based on the value of new construction, improvements to property and any increase in the value of state assessed property, the actual regular levy rate (including the refund levy) is used.

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AMENDATORY SECTION(Amending Order PT 82-2, filed 2/19/82)

WAC 458-19-550   State levy -- Apportionment between counties.   (((1) The department of revenue is empowered by statute to formulate such rules and processes as will ensure the equalization of taxation and uniformity of administration of the property tax laws of this state. The department is further directed to apportion the amount of the state property tax levy among the counties in proportion to the equalized value of taxable property in each county in order that each county shall pay its due and just proportion of the state tax. The application of the 106 percent limit to the state levy necessitates reasonable measures by the department to achieve the statutory requirement of just apportionment. This rule provides for adjustment in the apportionment of the next following year state levy when changes in property values are effected, in the manner described below, after the certification of the state levy by the department for the previous year. This rule also provides for adjustment for errors as defined herein which are not otherwise correctable in a timely and orderly manner in the year of levy through the exercise or enforcement of the department's supervisory powers. This rule shall be applied in the manner provided below to preserve an equitable and uniform apportionment of the state levy and to ensure the collection of the proper portion of the state levy from within each county.

(2) The levy rate for the state property tax levy is the lesser of (a) $3.60 per thousand dollars of the full true and fair value of the taxable property in the state, or (b) that rate which, when applied to the valuation figures specified in (3) below, will produce a total amount equal to one hundred and six percent of the base amount, i.e., of the highest state tax levy of the most recent three annual state levies, plus an amount calculated by multiplying the value of a new construction, improvements to real property, and increases in the value of centrally assessed property as determined by the department of revenue, by the levy rate of the state tax applicable in the year prior to the current year for which the tax levy is being computed.

(3) When determining the amount of the state levy with reference to the calculations under (b) above, the dollar amount apportioned to each county shall be computed based upon those valuation figures made available to the department by each county by October 1 of the levy year. If the use of certification of the counties' assessed values for state levy purposes results in an erroneous apportionment among the counties by reason of changes or errors in valuation within a county, the department of revenue shall adjust the following year's levy apportionment to correct for such changes or errors. Such adjustment shall continue in effect until implemented by the appropriate county officials, and the department shall utilize the powers contained in chapter 84.08 RCW to assure such implementation. For purposes of this rule a change in valuation shall include any adjustment effected by a reviewing body (county board of equalization, state board of tax appeals, or court of competent jurisdiction) and may also include additions of omitted property and other additions to or deletions from the assessment and tax rolls. Errors for purposes of adjustments under this rule shall include errors corrected by a final reviewing body and such other errors which have come to the attention of the department and which would otherwise be a subject for correction in the exercise of its supervisory powers.

(4) Correction required by reason of changes or errors relating to that valuation used in apportioning the current levy shall be made by adjusting the apportionment of the next following year's levy. The department shall recompute the apportionment of the previous year's levy with reference to taxable values corrected for changes and errors and equalized to true and fair value for such previous year's levy. Each county's apportioned amount for the current year's state levy shall be adjusted by the difference between the dollar amounts of state levy due from each county as shown by the original and revised levy computations for the previous year.

(5) Nothing in this rule shall relieve a county from its obligation to correct any error immediately upon discovery, including the calculation of an erroneous rate or the levy of an incorrect amount of tax, when such correction may be timely made to avoid distortion in the true apportionment of the state levy between counties.)) (1) Introduction. The department is charged with levying the state taxes authorized by law. As part of this task, the department apportions the amount of tax levied for state purposes among the counties in proportion to the value of taxable property in each county for the year to ensure that each county pays its due and just share of the state tax. This rule explains how the state property tax levy rate is determined, how the department adjusts the previous year's apportionment because of changes and errors in taxable values reported to the department after October 1 of the preceding year, and how the limit factor set forth in RCW 84.55.010 is applied to the state levy.

(2) Calculation of state levy rate. The levy rate for the state property tax levy is the lesser of:

(a) $3.60 per thousand dollars of the full true and fair value of the taxable property in the state; or

(b) The rate that, when applied to the valuation figures specified in subsection (3) of this rule, will produce a total amount equal to the levy limit set forth in RCW 84.55.010. This levy limit equals the limit factor multiplied by the highest state property tax levy of the most recent three annual state levies, plus an amount calculated by multiplying increases in value due to new construction, improvements to real property, and the increase in value of state-assessed property by the state levy rate applicable in the year prior to the current year for which the tax levy is being computed.

(3) Apportionment between the counties - Adjustment for changes or errors. When determining the amount of the state levy using the calculations set forth in subsection (2)(b) above, the dollar amount apportioned to each county is based upon the valuation figures reported to the department by each county by October 1 of the levy year. If use of the counties' certified assessed values for state levy purposes causes an erroneous apportionment among the counties because of later changes or later-identified errors in valuation within a county, the department will adjust the following year's levy apportionment to reflect these changes and the corrections for these errors.

(a) For purposes of this rule, a change in taxable value includes any final adjustment made by a reviewing body (county board of equalization, state board of tax appeals, or court of competent jurisdiction) and may also include additions of omitted property, other additions to or deletions from the assessment or tax rolls, any assessment return submitted by a county to the department subsequent to December 1st, or a change in the indicated ratio of a county.

(b) Errors requiring adjustments under this rule include errors corrected by a final reviewing body or any other error that may have come to the department's attention and would otherwise be a subject for correction in the exercise of its supervisory powers.

(4) Changes or errors in current levy - Adjust apportionment for the following year's levy. If there are any changes or errors relating to the values used in apportioning the current levy, the apportionment for the following year's levy will be adjusted. For purposes of this apportionment, the department will recalculate the previous year's levy and the apportionment thereof to correct any changes or errors in taxable values reported to the department after October 1 of the preceding year. The department will adjust the apportioned amount of the current year's state levy for each county by the difference between the dollar amounts of state levy due from each county as shown by the original and revised levy computations for the previous year.

(5) County required to correct any error upon discovery. Nothing in this rule relieves a county from its obligation to correct any error immediately upon discovery when the correction may be timely made to avoid distortion in the true apportionment of the state levy between counties.

[Statutory Authority: RCW 84.48.080, 84.55.060 and 84.08.010. 82-06-006 (Order PT 82-2), 458-19-550, filed 2/19/82. Statutory Authority: RCW 84.48.080 and 84.55.060. 81-04-055 (Order PT 81-4), 458-19-550, filed 2/4/81.]


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 458-19-015 Assessor to determine one hundred six percent levy limit -- Exceptions.

Washington State Code Reviser's Office