2213-S

AN ACT Relating to property tax reform; amending RCW 84.38.010, 84.38.050, 84.41.030, 84.41.041, 84.40.045, 84.56.050, and 84.48.010; reenacting and amending RCW 84.56.020; adding a new section to chapter 84.38 RCW; creating new sections; repealing RCW 84.56.022; and making an appropriation.

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

NEW SECTION. Sec. 1. This act may be known and cited as the taxpayer protection act of 1996.

NEW SECTION. Sec. 2. The legislature finds that large and unanticipated increases in taxes on residential property cause hardships for many homeowners. The legislature intends to allow distressed taxpayers to defer taxes due so that they will be able to remain in their homes while still paying an equitable share of the overall property tax burden. The legislature also finds that infrequent revaluations are inconsistent with the purposes of maintaining an equitable and uniform property tax system, and often result in sharp and unanticipated increases in assessments that cause unnecessary financial distress for taxpayers. The legislature intends that more frequent revaluations be conducted in all areas of the state to prevent or mitigate such increases in assessments. The legislature finds that taxation of property by numerous taxing districts makes difficult public understanding of the amounts and purposes of property taxes, and intends that the taxpayer be provided with sufficient information to understand a property tax bill and to make informed decisions on proposed property tax levies. The legislature intends that taxpayers not be dissuaded from exercising the right to appeal a property tax assessment by fear that such an appeal will result in a higher assessment.

PART I

DEFERRAL OF LARGE PROPERTY TAX INCREASES

Sec. 101. RCW 84.38.010 and 1975 1st ex.s. c 291 s 26 are each amended to read as follows:

(1) The legislature finds that savings once deemed adequate for retirement living have been rendered inadequate by increased tax rates, increased property values, and the failure of pension systems to adequately reflect such factors. It is therefore deemed necessary that the legislature, in addition to that tax exemption as provided for in RCW 84.36.381 through 84.36.389 as now or hereafter amended, allow retired persons to defer payment of special assessments on their residences, and to defer their real property tax obligations on their residences, an amount of up to eighty percent of their equity in said property. ((~~This deferral program~~)) The deferral provided under RCW 84.38.030 is intended to assist retired persons in maintaining their dignity and a reasonable standard of living by residing in their own homes, providing for their own needs, and managing their own affairs without requiring assistance from public welfare programs.

(2) The legislature also finds that large and unanticipated increases in taxes on residential property, usually attributable to rapid increases in property values, cause undue and excessive hardships for many homeowners. These increased tax burdens put many of these homeowners at risk of being unable to remain in their residences and maintain their property. Temporary financial hardships, such as unemployment or medical costs, may also cause some homeowners to have insufficient resources to pay property tax bills. The legislature therefore intends to provide such distressed taxpayers with the ability to defer taxes due so that they will be able to remain in their homes while still paying an equitable share of the overall property tax burden.

NEW SECTION. Sec. 102. A new section is added to chapter 84.38 RCW to read as follows:

A claimant may defer payment of that amount of real property taxes that exceeds six percent of the claimant's combined disposable income, but not to exceed two thousand five hundred dollars per year, if the following conditions are met:

(1) The property taxes must have been imposed upon a residence that was occupied by the claimant as a principal place of residence as of January 1st of the year in which the taxes are due, subject to the exceptions allowed under RCW 84.36.381(1);

(2) The total amount deferred by a claimant under this chapter must not exceed eighty percent of the claimant's equity value in the claimant's residence; and

(3) The claimant must meet the conditions of RCW 84.38.030 (3) and (4).

Sec. 103. RCW 84.38.050 and 1979 ex.s. c 214 s 8 are each amended to read as follows:

(1)(a) Declarations to defer property taxes for all years following the first year under RCW 84.38.030 may be made by filing with the county assessor no later than thirty days before the tax is due a renewal form in duplicate, prescribed by the department of revenue and supplied by the county assessor, which affirms the continued eligibility of the claimant.

(b) In January of each year, the county assessor shall send to each claimant who has been granted deferral of ad valorem taxes for the previous year under RCW 84.38.030 renewal forms and notice to renew.

(2) Declarations to defer special assessments shall be made by filing with the assessor no later than thirty days before the special assessment is due on a form to be prescribed by the department of revenue and supplied by the county assessor. Upon approval, the full amount of special assessments upon such claimant's residence shall be deferred but not to exceed an amount equal to eighty percent of the claimant's equity value in said property.

PART II

REVALUATIONS OF PROPERTY

Sec. 201. 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 years and physical inspection of all taxable real property within the county at least once each six years~~)) as required under this chapter.

Sec. 202. 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 at least once every 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. 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 years~~)) year, 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. 203. The sum of . . . . . dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1997, from the general fund to the department of revenue for the purpose of assisting counties in complying with RCW 84.41.041.

PART III

PROPERTY TAX NOTICES AND DISCLOSURES

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

(1) The assessor shall give notice 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 no such notice shall be mailed during the period from January 15 to February 15 of each year: PROVIDED FURTHER, That no notice need be sent with respect to changes in valuation of forest land made pursuant to chapter 84.33 RCW.

(2) The notice shall contain a statement of both the prior and the new true and fair value and 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 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. 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, 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~~)) entering into the security agreement, to the assessor the name and address of the person making payments 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~~)) this subsection within the time limitation provided for herein shall make such taxpayer subject to a maximum civil penalty of five thousand dollars. The penalties provided for herein 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. 302. RCW 84.56.050 and 1991 c 245 s 17 are each amended to read as follows:

(1) On receiving the tax rolls the 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 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 requirements of subsection (2) of this section for disclosures of increases from the previous year do not apply in respect to parcels that have been segregated or subdivided since the previous year.

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

The person to be notified under this section is that person whose name appears on the tax roll ((~~herein mentioned: PROVIDED, FURTHER, That~~)). If no name ((so)) appears on the tax roll the person to be 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. If any taxpayer, as shown by the tax rolls, holds solely a security interest in the real property that is the subject of the notice, the person making payments under the security agreement, as identified under RCW 84.40.045, shall also receive a copy of the notice provided for in this section.

NEW SECTION. Sec. 303. RCW 84.56.022 and 1995 c 180 s 1 & 1994 c 301 s 48 are each repealed.

PART IV

PROPERTY TAX APPEALS

Sec. 401. RCW 84.48.010 and 1988 c 222 s 20 are each amended to read as follows:

Prior to July 15th, the county legislative authority shall form a board for the equalization of the assessment of the property of the county. The members of said board shall receive a per diem amount as set by the county legislative authority for each day of actual attendance of the meeting of the board of equalization to be paid out of the current expense fund of the county: PROVIDED, That when the county legislative authority constitute the board they shall only receive their compensation as members of the county legislative authority. The board of equalization shall meet in open session for this purpose annually on the 15th day of July and, having each taken an oath fairly and impartially to perform their duties as members of such board, they shall examine and compare the returns of the assessment of the property of the county and proceed to equalize the same, so that each tract or lot of real property and each article or class of personal property shall be entered on the assessment list at its true and fair value, according to the measure of value used by the county assessor in such assessment year, which is presumed to be correct pursuant to RCW 84.40.0301, and subject to the following rules:

First. They shall raise the valuation of each tract or lot or item of real property which is returned below its true and fair value to such price or sum as to be the true and fair value thereof, after at least five days' notice shall have been given in writing to the owner or agent. The board shall not raise the valuation of any property that is the subject of a petition filed under RCW 84.40.038 by the owner or person responsible for payment of taxes.

Second. They shall reduce the valuation of each tract or lot or item which is returned above its true and fair value to such price or sum as to be the true and fair value thereof.

Third. They shall raise the valuation of each class of personal property which is returned below its true and fair value to such price or sum as to be the true and fair value thereof, and they shall raise the aggregate value of the personal property of each individual whenever the aggregate value is less than the true valuation of the taxable personal property possessed by such individual, to such sum or amount as to be the true value thereof, after at least five days' notice shall have been given in writing to the owner or agent thereof. The board shall not raise the valuation of any property that is the subject of a petition filed under RCW 84.40.038 by the owner or person responsible for payment of taxes.

Fourth. They shall reduce the valuation of each class of personal property enumerated on the detail and assessment list of the current year, which is returned above its true and fair value, to such price or sum as to be the true and fair value thereof; and they shall reduce the aggregate valuation of the personal property of such individual who has been assessed at too large a sum to such sum or amount as was the true and fair value of the personal property.

Fifth. The board may review all claims for either real or personal property tax exemption as determined by the county assessor, and shall consider any taxpayer appeals from the decision of the assessor thereon to determine (1) if the taxpayer is entitled to an exemption, and (2) if so, the amount thereof.

The clerk of the board shall keep an accurate journal or record of the proceedings and orders of said board showing the facts and evidence upon which their action is based, and the said record shall be published the same as other proceedings of county legislative authority, and shall make a true record of the changes of the descriptions and assessed values ordered by the county board of equalization. The assessor shall correct the real and personal assessment rolls in accordance with the changes made by the said county board of equalization, and the assessor shall make duplicate abstracts of such corrected values, one copy of which shall be retained in the office, and one copy forwarded to the department of revenue on or before the eighteenth day of August next following the meeting of the county board of equalization.

The county board of equalization shall meet on the 15th day of July and may continue in session and adjourn from time to time during a period not to exceed four weeks, but shall remain in session not less than three days: PROVIDED, That the county board of equalization with the approval of the county legislative authority may convene at any time when petitions filed exceed twenty-five, or ten percent of the number of appeals filed in the preceding year, whichever is greater.

No taxes, except special taxes, shall be extended upon the tax rolls until the property valuations are equalized by the department of revenue for the purpose of raising the state revenue.

County legislative authorities as such shall at no time have any authority to change the valuation of the property of any person or to release or commute in whole or in part the taxes due on the property of any person.

PART V

PROPERTY TAX DUE DATES

Sec. 501. 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~~)) as follows:

(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 less than thirty dollars, the total amount must be paid on or before the thirtieth day of April 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 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 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.

(7) As used in this section, "tax" includes special assessments.

PART VI

MISCELLANEOUS

NEW SECTION. Sec. 601. Part headings as used in this act constitute no part of the law.

NEW SECTION. Sec. 602. This act is effective for taxes levied for collection in 1997 and thereafter.