BP BHEAD INT S

AN ACT Relating to the deferral of property taxes for senior citizens; amending RCW 84.38.020 and 84.38.030; adding a new section to chapter 84.38 RCW; adding a new chapter to Title 84 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. With the rapid rise in residential property values, it has become increasingly difficult for many older homeowners to pay the increased taxes resulting from this rise in valuation and they are being forced to either borrow money to pay the unexpected increases in the tax or to sell their homes because of an inability to pay the tax. The legislature intends to allow these senior citizens to defer payment of property taxes on their residences to the extent that the taxes exceed a reasonable increase. This deferral program is intended to assist persons in maintaining their homes by easing the increases in tax.

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

(1) "Claimant" means a person who elects to defer payment of the real property taxes accrued on his or her residence by filing a declaration to defer as provided in this chapter. When two or more individuals of a household file or seek to file a declaration to defer, they may determine between them as to whom the claimant shall be.

(2) "Cotenant" means a person who resides with the claimant and who has an ownership interest in the residence.

(3) "Department" means the state department of revenue.

(4) "Equity value" means the amount by which the fair market value of a residence as determined from the records of the county assessor exceeds the total amount of any liens or other obligations against the property.

(5) "Real property" includes a mobile home which has substantially lost its identity as a mobile unit by virtue of its being fixed in location upon land owned or leased by the owner of the mobile home and placed on a foundation (posts or blocks) with fixed pipe connections with sewer, water, or other utilities: PROVIDED, That a mobile home located on land leased by the owner of the mobile home shall be subject, for tax billing, payment, and collection purposes, only to the personal property provisions of chapter 84.56 RCW and RCW 84.60.040.

(6) "Real property taxes" means ad valorem property taxes levied on a residence in this state in the preceding calendar year.

(7) "Residence" has the meaning given in RCW 84.36.383 except that it includes land in excess of one acre if the land cannot be subdivided under existing zoning laws.

NEW SECTION. Sec. 3. (1) A claimant may defer that portion of the real property taxes on the claimant's principal residence that exceeds the authorized tax limit. The authorized tax limit is the amount of tax levied on the property for the previous year, plus an increase equal to the rate of inflation for the previous year, plus an increase equal to the amount of tax levied on physical improvements made on the property in the previous year. For property that is not revaluated annually, the authorized tax limit shall be computed for each year of the revaluation cycle assuming that the amount of tax paid in the preceding year equaled the authorized tax limit. The department shall determine the rates of inflation under this chapter for each year. In making the determination, the department may use any recognized inflation index, including the consumer price index as published by the bureau of labor statistics of the federal department of labor.

(2) Deferral of taxes under this chapter is subject to the following conditions:

(a) The claimant must be sixty-five years of age or older on December 31st of the year in which the claim is filed.

(b) The claimant must have owned, at the time of filing, the residence on which the real property taxes have been imposed. For purposes of this subsection, a residence owned by a marital community or owned by cotenants shall be deemed to be owned by each spouse or cotenant. A claimant who has only a share ownership in cooperative housing, a life estate, a lease for life, or a revocable trust does not satisfy the ownership requirement.

(c) The property taxes must have been imposed upon a residence which was occupied by the claimant as a principal place of residence as of January 1st of the year for which the deferral is claimed.

(d) The claimant must have and keep in force fire and casualty insurance in sufficient amount to protect the interest of the state in the claimant's equity value. If the claimant fails to keep fire and casualty insurance in force to the extent of the state's interest in the claimant's equity value, the amount deferred shall not exceed one hundred percent of the claimant's equity value in the land or lot only.

(e) The total amount of taxes deferred under this chapter and chapter 84.38 RCW, including interest thereon, must not exceed eighty percent of the claimant's equity value in the residence.

NEW SECTION. Sec. 4. (1) Each claimant electing to defer payment of real property tax obligations under this chapter shall file with the county assessor, on forms prescribed by the department and supplied by the assessor, a written declaration thereof. The declaration to defer real property taxes for any year shall be filed no later than thirty days before the tax is due. The department may waive this requirement for good cause.

(2) The declaration shall designate the property to which the deferral applies and shall include a statement setting forth (a) a list of all members of the claimant's household who have an ownership interest in the residence, (b) the claimant's equity value in the residence, and (c) any other relevant information required by the rules of the department. Each copy shall be signed by the claimant subject to the penalties for false swearing under RCW 9A.72.040.

(3) The county assessor shall determine if each claimant shall be granted a deferral for each year, but the claimant is entitled to appeal this determination to the county board of equalization whose decision shall be final as to the deferral of that year.

NEW SECTION. Sec. 5. A declaration of deferral may be made by a duly authorized agent or by a guardian or other person charged with care of the person or property of a claimant.

NEW SECTION. Sec. 6. If the claimant declaring his or her intention to defer real property taxes under this chapter ceases to reside permanently on the property for which the declaration to defer is made between the date of filing the declaration and December 15th of that year, the deferral otherwise allowable under this chapter shall not be allowed for that claimant. However, this section shall not apply where the claimant dies, leaving a surviving spouse, or other cotenant, who would have qualified for the deferral and who elects to continue the deferral.

NEW SECTION. Sec. 7. If any residence is under mortgage or purchase contract requiring accumulation of reserves out of which the holder of the mortgage or contract is required to pay real estate taxes, the holder shall cosign the declaration of deferral either before a notary public or the county assessor or the county assessor's deputy in the county where the real property is located.

NEW SECTION. Sec. 8. Whenever a person's real property taxes are deferred under this chapter, the amount deferred and required to be paid pursuant to section 11 of this act shall become a lien in favor of the state upon his or her property and shall have priority as provided in chapters 35.50 and 84.60 RCW: PROVIDED, That the interest of a mortgage or purchase contract holder who is required to cosign a declaration of deferral under section 7 of this act shall have priority to the deferred lien. This lien may accumulate up to eighty percent of the amount of the claimant's equity value in the property and shall bear interest from the time it could have been paid before delinquency until the obligation is paid. The rate of interest shall be variable and shall be computed as provided in RCW 82.32.050(2).

In the case of a mobile home, the department of licensing shall show the state's lien on the certificate of ownership for the mobile home. In the case of all other property, the department of revenue shall file a notice of the deferral with the county recorder or auditor.

NEW SECTION. Sec. 9. The county assessor shall:

(1) Immediately transmit one copy of each declaration to defer to the department. The department may audit any declaration and shall notify the assessor as soon as possible of any claim where any factor appears to disqualify the claimant for the deferral sought.

(2) Compute the dollar tax rate for the county as if any deferrals provided by this chapter did not exist.

(3) As soon as possible notify the department of revenue and the county treasurer of the amount of real property taxes deferred for that year.

NEW SECTION. Sec. 10. After receipt of the notification from the county assessor of the amount of deferred real property taxes, the department shall pay, from amounts appropriated for that purpose, to the treasurers of such taxing districts the amounts, equivalent to the amount of real property taxes deferred, to be distributed to the taxing districts which levied the taxes so deferred.

NEW SECTION. Sec. 11. Real property tax obligations deferred under this chapter shall become payable together with interest as provided in section 8 of this act:

(1) Upon the sale of property which has a deferred real property tax lien upon it;

(2) Upon the death of the claimant with an outstanding deferred real property tax lien, except as provided in section 13 of this act;

(3) Upon the condemnation of property with a deferred real property tax lien upon it by a public or private body exercising eminent domain power, except as otherwise provided in RCW 84.60.070;

(4) At such time as the claimant ceases to reside permanently in the residence upon which the deferral has been granted; or

(5) Upon the failure of any condition set forth in section 3(2) of this act.

NEW SECTION. Sec. 12. (1) The county treasurer shall collect all the amounts deferred together with interest under this chapter, in the manner provided for in chapter 84.56 RCW. For purposes of collection of deferred taxes, the provisions of chapters 84.56, 84.60, and 84.64 RCW shall be applicable.

(2) When any deferred real property taxes together with interest are collected the moneys shall be credited to a special account in the county treasury. The county treasurer shall remit the amount of deferred real property taxes together with interest to the department within thirty days from the date of collection.

(3) The department shall deposit the deferred taxes in the state general fund.

NEW SECTION. Sec. 13. (1) Upon the death of the claimant, a surviving spouse of the claimant or other cotenant may elect to continue the property in its deferred tax status if the property is the residence of the spouse or cotenant and the spouse or cotenant meets the requirements of this chapter.

(2) The election under this section to continue the property in its deferred status shall be filed in the same manner as an original claim for deferral is filed under this chapter, not later than ninety days from the date of the claimant's death. Thereupon, the property with respect to which the deferral of real property taxes is claimed shall continue to be treated as deferred property.

NEW SECTION. Sec. 14. Any person may at any time pay a part or all of the deferred taxes, but such payment shall not affect the deferred tax status of the property.

NEW SECTION. Sec. 15. Nothing in this chapter is intended to prevent the collection, by foreclosure, of personal property taxes which become a lien against tax‑deferred property.

NEW SECTION. Sec. 16. The department and each local assessor shall publicize the benefits authorized under this chapter and the qualifications and manner of making claims under this chapter through communications media, including such paid advertisements or notices as it deems appropriate. Notice of the benefits, qualifications, method of making applications, and availability of further information shall be included on or with property tax statements and revaluation notices for all residential property including mobile homes, except rental properties.

NEW SECTION. Sec. 17. The department shall design forms and adopt rules under chapter 34.05 RCW to administer this chapter.

NEW SECTION. Sec. 18. A new section is added to chapter 84.38 RCW to read as follows:

The department and each local assessor shall publicize the benefits authorized under this chapter and the qualifications and manner of making claims under this chapter through communications media, including such paid advertisements or notices as it deems appropriate. Notice of the benefits, qualifications, method of making applications, and availability of further information shall be included on or with property tax statements and revaluation notices for all residential property including mobile homes, except rental properties.

Sec. 19. RCW 84.38.020 and 1991 c 213 s 1 are each amended to read as follows:

Unless a different meaning is plainly required by the context, the following words and phrases as hereinafter used in this chapter shall have the following meanings:

(1) "Claimant" means a person who either elects or is required under RCW ((~~84.64.030 or~~)) 84.64.050 to defer payment of the special assessments and/or real property taxes accrued on the claimant's residence by filing a declaration to defer as provided by this chapter.

When two or more individuals of a household file or seek to file a declaration to defer, they may determine between them as to who the claimant shall be.

(2) "Department" means the state department of revenue.

(3) "Equity value" means the amount by which the fair market value of a residence as determined from the records of the county assessor exceeds the total amount of any liens or other obligations against the property.

(4) "Special assessment" means the charge or obligation imposed by a city, town, county, or other municipal corporation upon property specially benefited by a local improvement, including assessments under chapters 35.44, 36.88, 36.94, 53.08, 54.16, 56.20, 57.16, 86.09, and 87.03 RCW and any other relevant chapter.

(5) "Real property taxes" means ad valorem property taxes levied on a residence in this state in the preceding calendar year.

(6) "Residence" has the meaning given in RCW 84.36.383 except that it includes land in excess of one acre if the land cannot be subdivided under existing zoning laws.

Sec. 20. RCW 84.38.030 and 1991 c 213 s 2 are each amended to read as follows:

A claimant may defer payment of special assessments and/or real property taxes on up to eighty percent of the amount of the claimant's equity value in the claimant's residence if the following conditions are met:

(1) The claimant must meet all requirements for an exemption for the residence under RCW 84.36.381, other than the income limits.

(2) The claimant must have a combined disposable income, as defined in RCW 84.36.383, of thirty thousand dollars or less.

(3) The claimant must have owned, at the time of filing, the residence on which the special assessment and/or real property taxes have been imposed. For purposes of this subsection, a residence owned by a marital community or owned by cotenants shall be deemed to be owned by each spouse or cotenant. A claimant who has only a share ownership in cooperative housing, a life estate, a lease for life, or a revocable trust does not satisfy the ownership requirement.

(4) The claimant must have and keep in force fire and casualty insurance in sufficient amount to protect the interest of the state in the claimant's equity value: PROVIDED, That if the claimant fails to keep fire and casualty insurance in force to the extent of the state's interest in the claimant's equity value, the amount deferred shall not exceed one hundred percent of the claimant's equity value in the land or lot only.

(5) In the case of special assessment deferral, the claimant must have opted for payment of such special assessments on the installment method if such method was available.

(6) The total amount of taxes deferred under this chapter and chapter 84.-- RCW (sections 1 through 16 of this act), including interest thereon, must not exceed eighty percent of the claimant's equity value in the residence.

NEW SECTION. Sec. 21. This act shall apply to taxes payable in 1994, and thereafter.

NEW SECTION. Sec. 22. Sections 1 through 17 of this act shall constitute a new chapter in Title 84 RCW.