BP BHEAD INT H

AN ACT Relating to property tax reform; amending RCW 84.55.010, 84.55.020, 84.40.0301, 84.40.045, 84.56.050, 84.52.054, 84.41.030, and 84.41.041; reenacting and amending RCW 84.56.020; adding a new section to chapter 84.41 RCW; creating new sections; repealing RCW 84.56.022; prescribing penalties; providing an effective date; and declaring an emergency.

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

PART I - FINDINGS AND INTENT

NEW SECTION. Sec. 1. The legislature finds that:

(1) The current system of property taxation in the state of Washington is fundamentally sound because it is based on the principle of valuing and assessing property at one hundred percent of true and fair value;

(2) Because the property tax is so visible and is paid in lump sums, intensified reliance on the property tax has contributed directly to "taxpayer revolts" in the state of Washington and many other states and there is increasing public sentiment to further restrict property taxes in this state;

(3) Despite attempts to place constitutional and statutory control mechanisms on property tax rates, taxing districts are allowed to collect taxes based on limits that do not necessarily reflect the cost of their services nor the economic factors within the taxing district;

(4) The correlation of the actual cost of voter-approved property tax levies to increasing property tax burdens has not been clearly articulated to property taxpayers;

(5) Property taxpayers must be assured that assessment practices and billing procedures are fair, equitable, and reasonable; and

(6) Property taxes can cause severe hardship to some property owners, especially those on fixed incomes.

NEW SECTION. Sec. 2. It is the intent of this act to:

(1) Affirm the concept of valuing and assessing property at one hundred percent of its true and fair value for the purposes of determining property tax liability;

(2) Strengthen the statutory limitation on property tax rates;

(3) Provide for clarification of billing schedules;

(4) Reduce the burden of proof placed upon property taxpayers when challenging property tax valuations;

(5) Provide for clear communication of the cost of voter-approved property taxes through more detailed information on ballot propositions and on notifications pertaining to property tax assessments; and

(6) Provide for annual revaluation cycles to lessen the impact of property value increases on property tax bills and to promote increased equity among all property taxpayers.

PART II - STATUTORY LIMITATIONS STRENGTHENED

Sec. 3. RCW 84.55.010 and 1979 ex.s. c 218 s 2 are each amended to read as follows:

Except as provided in this chapter, the levy for a taxing district in any year shall be set so that the regular property taxes payable in the following year shall not exceed one hundred six percent of the amount of regular property taxes lawfully levied for such district in the highest of the three most recent years in which such taxes were levied for such district ((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 levy rate of that district for the preceding year)).

Sec. 4. RCW 84.55.020 and 1971 ex.s. c 288 s 21 are each amended to read as follows:

Notwithstanding the limitation set forth in RCW 84.55.010, the first levy for a taxing district created from consolidation of similar taxing districts shall be set so that the regular property taxes payable in the following year shall not exceed one hundred six percent of the sum of the amount of regular property taxes lawfully levied for each component taxing district in the highest of the three most recent years in which such taxes were levied for such district ((plus the additional dollar amount calculated by multiplying the increase in assessed value in each component district resulting from new construction and improvements to property by the regular property tax rate of each component district for the preceding year)).

PART III - CLARIFY BILLING CYCLES

Sec. 5. RCW 84.56.020 and 1991 c 245 s 16 and 1991 c 52 s 1 are each reenacted and amended to read as follows:

(1) The county treasurer shall be the receiver and collector of all taxes extended upon the tax rolls of the county, whether levied for state, county, school, bridge, road, municipal or other purposes, and also of all fines, forfeitures or penalties received by any person or officer for the use of his or her county.

(2) All taxes upon real and personal property made payable by the provisions of this title shall be due and payable to the county treasurer ((~~on or before the thirtieth day of April and shall be delinquent after that date: PROVIDED, That~~)) in the following manner and during the year in which the tax bill was received:

(a) One-half of the taxes shall be due and payable on or before the thirtieth day of April and shall be delinquent after that date.

(b) The remaining one-half of the taxes plus any applicable interest and penalties shall be due and payable on or before the thirty-first day of October and shall be delinquent after that date.

(c) If, however, the total amount of taxes due on real and personal property by one person is at or below three hundred dollars, that amount must be paid in total on or before the thirtieth day of June and shall be delinquent after that date.

(3) Each tax statement shall include a notice that checks for payment of taxes due under this title may be made payable to "Treasurer of . . . . . . County" or other appropriate office, but tax statements shall not include any suggestion that checks may be made payable to the name of the individual holding the office of treasurer nor any other individual((: PROVIDED FURTHER, That when the total amount of tax or special assessments on personal property or on any lot, block or tract of real property payable by one person is thirty dollars or more, and if one-half of such tax be paid on or before the thirtieth day of April, the remainder of such tax shall be due and payable on or before the thirty-first day of October following and shall be delinquent after that date: PROVIDED FURTHER, That when the total amount of tax or special assessments on any lot, block or tract of real property payable by one person is thirty dollars or more, and if one-half of such tax be paid after the thirtieth day of April but before the thirty-first day of October, together with the applicable interest and penalty on the full amount of such tax, the remainder of such tax shall be due and payable on or before the thirty-first day of October following and shall be delinquent after that date)).

((~~(2)~~)) (4) Delinquent taxes under this section are subject to interest at the rate of twelve percent per annum computed on a monthly basis from the date of delinquency until paid. Interest shall be calculated at the rate in effect at the time of payment of the tax, regardless of when the taxes were first delinquent. In addition, delinquent taxes under this section are subject to penalties as follows:

(a) A penalty of three percent shall be assessed on the amount of tax delinquent on the first day of June ((~~1st~~)) of the year in which the tax is due.

(b) An additional penalty of eight percent shall be assessed on the total amount of tax delinquent on the first day of December ((~~1st~~)) of the year in which the tax is due.

(((3) Subsection (2) of this section notwithstanding, no interest or penalties may be assessed for the period April 30, 1991, through December 31, 1991, on delinquent 1991 taxes which are imposed on personal residences owned by military personnel who participated in the situation known as "Operation Desert Shield," "Operation Desert Storm," or any following operation from August 2, 1990, to a date specified by an agency of the federal government as the end of such operations.

~~(4)~~)) (5) For purposes of this chapter, "interest" means both interest and penalties.

((~~(5)~~)) (6) All collections of interest on delinquent taxes shall be credited to the county current expense fund; but the cost of foreclosure and sale of real property, and the fees and costs of distraint and sale of personal property, for delinquent taxes, shall, when collected, be credited to the operation and maintenance fund of the county treasurer prosecuting the foreclosure or distraint or sale; and shall be used by the county treasurer as a revolving fund to defray the cost of further foreclosure, distraint and sale for delinquent taxes without regard to budget limitations.

PART IV - REDUCTION OF BURDEN OF PROOF STANDARD

Sec. 6. RCW 84.40.0301 and 1994 c 301 s 35 are each amended to read as follows:

Upon review by any court, or appellate body, of a determination of the valuation of property for purposes of taxation, it shall be presumed that the determination of the public official charged with the duty of establishing such value is correct but this presumption shall not be a defense against any correction indicated by ((~~clear, cogent and convincing~~)) a preponderance of the evidence.

PART V - FULL TAX DISCLOSURE PROVISIONS

Sec. 7. RCW 84.40.045 and 1994 c 301 s 36 are each amended to read as follows:

(1) The assessor shall give notice to the taxpayer of any change in the true and fair value of real property for the tract or lot of land and any improvements thereon no later than thirty days after appraisal((~~: PROVIDED, That~~)). However, no such notice shall be mailed during the period from January 15 to February 15 of each year((~~: PROVIDED FURTHER, That~~)). In addition, no notice need be sent with respect to changes in valuation of forest land made pursuant to chapter 84.33 RCW.

(2) The notice provided for in this section shall contain the following information and this information shall be separately stated on the notice:

(a) A statement of both the ((~~prior~~)) immediately preceding year's and the ((~~new~~)) current year's true and fair value ((~~and~~)), stating separately land and improvement values;

(b) The ratio of the assessed value to the true and fair value on which the assessment of the property is based((~~, stating separately land and improvement values,~~)); and

(c) A brief statement of the procedure for appeal to the board of equalization and the time, date, and place of the meetings of the board.

(3) The notice shall be mailed by the assessor to the taxpayer. For the purposes of this section, "taxpayer" means any person charged, or whose property is charged, with property tax.

(4) If any taxpayer, as shown by the tax rolls, holds solely a security interest in the real property which is the subject of the notice provided for in this section, pursuant to a mortgage, contract of sale, or deed of trust, such taxpayer shall((~~, upon written request of the assessor,~~)) supply((~~, within thirty days of receipt of such request,~~)) to the assessor for the county in which the parcel is located for inclusion on the tax rolls the name and address of the person making payments for property tax purposes pursuant to the mortgage, contract of sale, or deed of trust, and thereafter such person shall also receive a copy of the notice provided for in this section. Willful failure to comply with ((~~such request within the time limitation provided for herein~~)) the requirements of this subsection shall make such taxpayer subject to a maximum civil penalty of five thousand dollars. The penalties provided for ((~~herein~~)) in this subsection shall be recoverable in an action by the county prosecutor, and when recovered shall be deposited in the county current expense fund. ((~~The assessor shall make the request provided for by this section during the month of January.~~))

Sec. 8. RCW 84.56.050 and 1991 c 245 s 17 are each amended to read as follows:

(1) On receiving the tax rolls the county treasurer shall post all real and personal property taxes from the rolls to the treasurer's tax roll, and shall carry forward to the current tax rolls a memorandum of all delinquent taxes on each and every description of property, and enter the same on the property upon which the taxes are delinquent showing the amounts for each year.

(2) The treasurer shall notify each taxpayer in the county, at the expense of the county, of the total amount of ((~~the~~)) real and personal property((~~, and the current and delinquent amount of tax due on the same; and the treasurer shall have printed on the notice the name of each tax and the levy made on the same~~)) taxes due and payable. The notice mailed to the taxpayer shall at a minimum contain the following information and this information must be separately stated on the notice:

(a) The name and address of the taxpayer;

(b) The name, address, and telephone number of the county issuing the notice;

(d) The legal property address and description;

(e) The year for which the assessment is being made;

(f) The assessed valuation for the identified parcel's land value and improvement value as reported by the county assessor's office;

(g) Current billing information containing the name of each taxing jurisdiction levying a tax on the identified parcel, the amount of that jurisdiction's levy rate, and the total amount due for each taxing jurisdiction;

(h) The total taxes due as a result of regular property taxes together with an indication of the percentage increase from the previous year's total;

(i) The total taxes due as a result of excess levies approved by the voters and any special assessments together with an indication of the percentage increase from the previous year's total;

(j) The total taxes due and payable from the taxpayer, including any delinquent taxes and any interest or penalties due; and

(k) A notice of the payment due dates and possible delinquency penalties and interest.

(3) The county treasurer shall be the sole collector of all delinquent taxes and all other taxes due and collectible on the tax rolls of the county((~~: PROVIDED, That~~)).

(4) For the purposes of this section, the term "taxpayer" ((~~as used in this section shall~~)) means any person charged, or whose property is charged, with property tax((~~; and~~)).

(5) The person to be officially notified under subsection (2) of this section is ((~~that~~)) the person whose name appears on the tax rolls ((~~herein mentioned: PROVIDED, FURTHER, That~~)) of the county issuing the notice. If no name so appears the person to be officially notified is that person shown by the treasurer's tax rolls or duplicate tax receipts of any preceding year as the payer of the tax last paid on the property in question.

(6) The county assessor shall include on the tax rolls the name and address of the person making payments for property tax purposes pursuant to a mortgage, contract of sale, or deed of trust that has been provided by a taxpayer as required in RCW 84.40.045(4). If this information is included on the tax rolls for any parcel, the treasurer shall provide a duplicate of the notice provided for in this section to that person. The duplicate notice shall clearly state in bold-face type that it is not a bill and is for informational purposes only.

Sec. 9. RCW 84.52.054 and 1986 c 133 s 2 are each amended to read as follows:

(1) Any ballot proposition submitted to the voters requesting the additional tax provided for in ((~~subparagraph (a) of the seventeenth amendment to~~)) Article VII, section 2 (a) and (b) of the state Constitution ((~~as amended by Amendment 59 and as thereafter amended,~~)) and specifically authorized by RCW 84.52.052((~~, as now or hereafter amended, and RCW~~)), 84.52.053 ((~~and~~)), 84.52.0531, and 84.52.056, or any other proposition submitted to the voters for regular or excess property tax levies shall ((be set forth in terms of dollars on the ballot of the proposition to be submitted to the voters, together with an estimate of the dollar rate of tax levy that will be required to produce the dollar amount; and)) contain the following information in the official ballot title submitted to the voters:

(a) The total dollar amount proposed to be collected during the entire period of the levy;

(b) An estimate of the dollar rate of the tax levy that will be required for each one thousand dollars of assessed value to produce the total dollar amount proposed in (a) of this subsection;

(c) An estimate of the total tax liability for one hundred thousand dollars of taxable value based on the estimated dollar amount of tax levy in (b) of this subsection for each year of the period for which the tax levy is proposed; and

(d) A summary of the proposed uses of the tax levies requested.

(2) Any ballot proposition submitted to the voters requesting the additional tax provided for in Article VII, section 2 (a) and (b) of the state Constitution and specifically authorized by RCW 84.52.052, 84.52.053, 84.52.0531, and 84.52.056, or any other proposition submitted to the voters for regular or excess property tax levies lasting longer than one year shall contain the following information in the official ballot title submitted to the voters:

(a) The total dollar amount proposed to be collected during the entire period of the levy;

(b) The total dollar amount proposed to be collected during each year of the period for which the tax levy is proposed. The total dollar amount for each annual levy in the period may be equal or in different amounts;

(c) An estimate of the dollar rate of the tax levy that will be required for each one thousand dollars of assessed value to produce the total dollar amounts proposed in (b) of this subsection;

(d) An estimate of the total tax liability for one hundred thousand dollars of taxable value based on the estimated dollar amount of tax levy in (b) of this subsection for each year of the period for which the tax levy is proposed; and

(e) A summary of the proposed uses of the tax levies requested.

(3) The county assessor, in spreading ((~~this~~)) any voter-approved tax upon the rolls, shall determine the eventual dollar rate required to produce the amount of dollars so voted upon, regardless of the estimate of dollar rate of tax levy carried in said proposition. ((In the case of a school district proposition for a particular period, the dollar amount and the corresponding estimate of the dollar rate of tax levy shall be set forth for each of the years in that period. The dollar amount for each annual levy in the particular period may be equal or in different amounts.))

PART VI - ANNUAL REVALUATIONS

Sec. 10. RCW 84.41.030 and 1982 1st ex.s. c 46 s 1 are each amended to read as follows:

Each county assessor shall maintain an active and systematic program of revaluation on a continuous basis, and shall establish a revaluation schedule which will result in revaluation of all taxable real property within the county at least once each ((~~four~~)) year((s)) and physical inspection of all taxable real property within the county at least once each six years.

Sec. 11. RCW 84.41.041 and 1987 c 319 s 4 are each amended to read as follows:

Each county assessor shall cause all taxable real property to be revalued each year and physically inspected ((~~and valued~~)) at least once every six years in accordance with RCW 84.41.030, and in accordance with a plan filed with and approved by the department of revenue except that the department shall approve for counties with populations under two hundred thousand a plan that provides for revaluation every four years. Such revaluation plan shall provide that a reasonable portion of all taxable real property within a county shall be ((~~revalued and these newly-determined~~)) physically inspected and newly determined values based on these physical inspections shall be placed on the assessment rolls each year. ((The department may approve a plan that provides that all property in the county be revalued every two years. If the revaluation plan provides for physical inspection at least once each four years, during the intervals between each physical inspection of real property, the valuation of such property may be adjusted to its current true and fair value, such adjustments to be based upon appropriate statistical data.)) If the revaluation plan provides for physical inspection less frequently than once each ((~~four~~)) year((s)), during the intervals between each physical inspection of real property, the valuation of such property shall be adjusted to its current true and fair value, such adjustments to be made once each year and to be based upon appropriate statistical data.

The assessor may require property owners to submit pertinent data respecting taxable property in their control including data respecting any sale or purchase of said property within the past five years, the cost and characteristics of any improvement on the property and other facts necessary for appraisal of the property.

NEW SECTION. Sec. 12. A new section is added to chapter 84.41 RCW to read as follows:

(1) Each county assessor shall file an implementation plan for RCW 84.41.041 with the department by July 1, 1996.

(2) The department may approve a revaluation plan that provides for phased-in compliance with the annual statistical update requirement provided in RCW 84.41.041. A phased-in compliance plan must provide statistical updates for a reasonable portion of all taxable real property within a county each year, with full compliance with the annual statistical update requirement not later than for taxes levied for collection in 2000.

(3) Department approval of requests for phased-in compliance with the annual statistical update requirement shall be determined by the extent to which the requirement creates an undue burden or hardship upon the county requesting the approval. For the purposes of this section, "undue burden or hardship" means that the costs of complying with the annual statistical update requirement by 1996 would be prohibitive or that the county does not at the time of application have the adequate tools or methods of valuation to ensure a smooth transition to annual statistical updates by 1996.

NEW SECTION. Sec. 13. RCW 84.56.022 and 1994 c 301 s 48 are each repealed.

NEW SECTION. Sec. 14. PART HEADINGS AND CAPTIONS. Part headings and captions as used in this act constitute no part of the law.

NEW SECTION. Sec. 15. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 16. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995.