FINAL BILL REPORT

                 EHB 1417

                          C 2 L 97

                     Synopsis as Enacted

Brief Description:  Reducing total state levy amounts by 4.7187 percent.

Sponsors:  Representatives B. Thomas, Carrell, Cairnes, Dyer, L. Thomas, Mulliken, Sheldon, Robertson, Thompson, Cooke, Mielke and Van Luven.

Background:  The state annually levies a statewide property tax.  The state property tax is limited to a rate no greater than $3.60 per $1,000 of market value.  The state property tax is also limited by the 106 percent levy limit.  The 106 percent levy limit requires reduction of property tax rates as necessary to limit the total amount of property taxes received by a taxing district.  The limit for each year is the sum of (a) 106 percent of the highest amount of property taxes levied in the three most recent years, plus (b) an amount equal to last year's levy rate multiplied by the value of new construction.

The state property tax for collection in 1996 was reduced 4.7187 percent by legislation enacted during the 1995 session.  This reduction affected only the 1996 levy.  Therefore, for purposes of the 106 percent limit, state levies after 1996 will be set at the amount that would otherwise be allowed as if the reduction in 1996 had never occurred.

Summary: The one-time 4.7187 percent reduction of the 1996 state property tax is extended to 1997.  In addition, a 4.7187 percent reduction in 1998 is referred to the voters.  If approved by the voters, the reduced 1998 levy will be used for future state levy calculations under the 106 percent levy limit.

Votes on Final Passage:

House  61 32

Senate 30 17

Effective:  January 30, 1997 (Section 1)

     July 27, 1997 (Sections 3-5)

     December 4, 1997 (Section 2), upon voter approval at the next general election