BP BHEAD INT H

AN ACT Relating to limiting increases in valuation for property tax purposes; amending RCW 84.40.040, and 84.70.010; adding a new section to chapter 84.40 RCW; and creating new sections.

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

NEW SECTION. Sec. 1. As used in section 2 of this act, "change of ownership" means a transfer of a present interest in real property, including a transfer of the beneficial use of real property.

(1) "Change of ownership" includes, except as provided in subsections (2) and (3) of this section, the following:

(a) Contracting to convey the title to or ownership of real property upon the fulfillment of one or more stated conditions where the right to possession of the property is transferred currently.

(b) The creation, transfer, or termination of a joint tenancy interest.

(d) The vesting of a right of possession or enjoyment of a remainder or reversionary interest that occurs upon the termination of a life estate or other similar precedent property interest.

(e) An interest that vests in persons other than the trustor where a revocable trust becomes irrevocable.

(f) The transfer of stock of a cooperative housing corporation, vested with legal title to real property, that conveys to the transferee the exclusive right to occupancy and possession of such property, or a portion of the property.

(2) "Change of ownership" does not include:

(a) A transfer between co-owners that results in a change in the method of holding title to the real property transferred without changing the proportional interests of the co-owners in the real property, such as a partition of a tenancy-in-common.

(b) A transfer for the purpose of merely perfecting title to the real property.

(c) The creation, assignment, termination, or reconveyance of a security interest in real property; or the substitution of a trustee under a security instrument.

(d) A transfer of real property by the trustor, or by the trustor's spouse, or by both, into a trust for so long as the transferor is the sole present beneficiary of the trust, or the trust is revocable; or any transfer of real property by a trustee of such trust back to the trustor.

(e) A transfer of real property by an instrument whose terms reserve to the transferor an estate for years or an estate for life. However, the termination of such an estate for years or life estate shall constitute a change of ownership.

(f) A transfer of real property between or among the same parties for the purpose of correcting or reforming a deed to express the true intention of the parties, if the original relationship between the grantor and grantee is not changed.

(3) "Change of ownership" also does not include an interspousal transfer of real property, including, but not limited to:

(a) Transfers to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of such trust to the spouse of the trustor;

(b) Transfers that take effect upon the death of a spouse;

(c) Transfers to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of marriage or legal separation; and

(d) The creation, transfer, or termination, solely between spouses, of any co-owner's interest.

NEW SECTION. Sec. 2. A new section is added to chapter 84.40 RCW to read as follows:

The assessed value of real property shall not be increased unless there has been a change of ownership since the previous valuation of the property. If there has been a change of ownership since the previous valuation of the property, the property shall be revalued as otherwise provided by law.

Sec. 3. RCW 84.40.040 and 1988 c 222 s 15 are each amended to read as follows:

The assessor shall begin the preliminary work for each assessment not later than the first day of December of each year in all counties in the state. The assessor shall also complete the duties of listing and placing valuations on all property by May 31st of each year, except that the listing and valuation of construction ((~~under RCW 36.21.040 through 36.21.080~~)) shall be completed by August 31st of each year as provided in RCW 36.21.080, and in the following manner, to wit:

The assessor shall actually determine as nearly as practicable the true and fair value of each tract or lot of land listed for taxation and of each improvement located thereon and shall enter one hundred percent of the true and fair value of such land and of the total true and fair value of such improvements, together with the total of such one hundred percent valuations, opposite each description of property on the assessment list and tax roll.

The assessor shall determine the assessed value for each tract or lot of land listed for taxation, including improvements located thereon, and shall also enter this value opposite each description of property on the assessment list and tax roll.

The assessor shall make an alphabetical list of the names of all persons in the county liable to assessment of personal property, and require each person to make a correct list and statement of such property according to the standard form prescribed by the department of revenue, which statement and list shall include, if required by the form, the year of acquisition and total original cost of personal property in each category of the prescribed form, and shall be signed and verified under penalty of perjury by the person listing the property: PROVIDED, That the assessor may list and value improvements on publicly owned land in the same manner as real property is listed and valued, including conformance with the revaluation program required under chapter 84.41 RCW. Such list and statement shall be filed on or before the last day of April. The assessor shall on or before the 1st day of January of each year mail a notice to all such persons at their last known address that such statement and list is required, such notice to be accompanied by the form on which the statement or list is to be made: PROVIDED, That the notice mailed by the assessor to each taxpayer each year shall, if practicable, include the statement and list of personal property of the taxpayer for the preceding year. Upon receipt of such statement and list the assessor shall thereupon determine the true and fair value of the property included in such statement and enter one hundred percent of the same on the assessment roll opposite the name of the party assessed; and in making such entry in the assessment list, the assessor shall give the name and post office address of the party listing the property, and if the party resides in a city the assessor shall give the street and number or other brief description of the party's residence or place of business. The assessor may, after giving written notice of the action to the person to be assessed, add to the assessment list any taxable property which should be included in such list.

Sec. 4. RCW 84.70.010 and 1994 c 301 s 56 are each amended to read as follows:

(1) If, on or before December 31 in any calendar year, any real or personal property placed upon the assessment roll of that year is destroyed in whole or in part, or is in an area that has been declared a disaster area by the governor and has been reduced in value by more than twenty percent as a result of a natural disaster, the true and ((~~fair~~)) assessed value of such property shall be reduced for that year by an amount determined as follows:

(a) First take the true and fair value of such taxable property before destruction or reduction in value and deduct therefrom the true and fair value of the remaining property after destruction or reduction in value.

(b) Then multiply any amount remaining by the ratio of the assessed value of the property to the true and fair value of the property.

(c) Then divide ((~~any amount remaining~~)) the result under (b) of this subsection by the number of days in the year and multiply the quotient by the number of days remaining in the calendar year after the date of the destruction or reduction in value of the property.

(2) No reduction in the ((~~true and fair~~)) assessed value shall be made more than three years after the date of destruction or reduction in value.

(3) The assessor shall make such reduction on his or her own motion; however, the taxpayer may make application for reduction on forms prepared by the department and provided by the assessor. The assessor shall notify the taxpayer of the amount of reduction.

(4) If destroyed property is replaced prior to the valuation dates contained in RCW 36.21.080 and 36.21.090, the total taxable value for that year shall not exceed the value as of the appropriate valuation date in RCW 36.21.080 or 36.21.090, whichever is appropriate.

(5) The taxpayer may appeal the amount of reduction to the county board of equalization within thirty days of notification or July 1st of the year of reduction, whichever is later. The board shall reconvene, if necessary, to hear the appeal.

NEW SECTION. Sec. 5. This act shall be effective for taxes levied for collection in 1996 and thereafter.