HOUSE BILL REPORT

HB 1634

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Passed House:

April 18, 2013

Title: An act relating to including the value of solar, biomass, and geothermal facilities in the property tax levy limit calculation.

Brief Description: Including the value of solar, biomass, and geothermal facilities in the property tax levy limit calculation.

Sponsors: Representatives Warnick and Manweller.

Brief History:

Committee Activity:

Finance: 2/15/13, 2/27/13 [DP].

Floor Activity:

Passed House: 4/18/13, 93-0.

Brief Summary of Bill

  • Allows a taxing district to add the value of new solar, biomass, and geothermal facilities that generate electricity to the property tax revenue limit calculation.

HOUSE COMMITTEE ON FINANCE

Majority Report: Do pass. Signed by 12 members: Representatives Carlyle, Chair; Tharinger, Vice Chair; Nealey, Ranking Minority Member; Orcutt, Assistant Ranking Minority Member; Condotta, Fitzgibbon, Hansen, Lytton, Pollet, Reykdal, Springer and Vick.

Staff: Jeff Olsen (786-7175).

Background:

A district's regular property tax levy is limited by a statutory maximum growth rate in the amount of tax revenue that may be collected from year to year. The limit requires a reduction of property tax rates as necessary to limit the growth in the total amount of property tax revenue received to the lesser of 1 percent or inflation. The revenue limitation does not apply to new value placed on tax rolls attributable to new construction, improvements to existing property, changes in state-assessed valuation, or to construction of certain wind turbines.

Solar, biomass, and geothermal facilities are personal property unless the same person owns both the facilities and the land upon which they are located. Solar, biomass, and geothermal facilities owned by utilities that operate in more than one county are state assessed. Property taxes resulting from new state-assessed facilities increase revenues to taxing districts because taxes resulting from increases in the value of state-assessed property are added to the amount that may be levied under the levy limit.Solar, biomass, and geothermal facilities owned by utilities that operate entirely within a single county are assessed by the county assessor. Property taxes resulting from new county-assessed facilities do not increase revenues to taxing districts because they are not considered "new construction" or an "improvement to property."

Summary of Bill:

The property tax revenue limit for a taxing district is increased by the value resulting from new solar, biomass, and geothermal facilities that generate electricity.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

Staff Summary of Public Testimony:

(In support) Central Washington has seen a significant amount of wind turbines, and much of this development has occurred on leased land. With potentially more alternative energy development coming, this bill would help local governments pay for the impacts of these projects. By adding these additional energy sources, it will create a level playing field and allow the county to generate additional revenues, similar to other kinds of new construction.

(Opposed) None.

Persons Testifying: Representative Warnick, prime sponsor; Gary Berendt, Kittitas County Commissioner; and Diane Dorey, Lewis County Assessor.

Persons Signed In To Testify But Not Testifying: None.