S-0558

AN ACT Relating to property tax relief; amending RCW 84.52.080, 84.56.050, 84.36.383, 84.36.385, 84.36.387, and 84.36.389; adding a new section to chapter 84.52 RCW; adding a new section to chapter 84.55 RCW; creating a new section; repealing RCW 84.55.---; repealing 1997 c . . . s 9 (uncodified); prescribing penalties; providing a contingent effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. A new section is added to chapter 84.52 RCW to read as follows:

(1) There is allowed a credit against the state regular real property tax equal to the tax imposed on the first sixty-two thousand dollars of assessed valuation of owner-occupied residential property, multiplied by the indicated ratio fixed by the state department of revenue. The credit in any tax year shall not exceed the amount of state property tax imposed on the property.

(2) The credit in this section is in addition to any other property tax relief that may be provided by law.

(3) The following conditions apply to credit under this section:

(a) The residence must be occupied by the person claiming the credit as a principal place of residence as of January 1st of the year in which taxes are due. A person who sells, transfers, or is displaced from the person's residence may transfer the person's credit status to a replacement residence, but a claimant may not receive a credit on more than one residence in any year. Confinement of the person to a hospital or nursing home does not disqualify the claim of credit if:

(i) The residence is temporarily unoccupied;

(ii) The residence is occupied by either or both a spouse or a person financially dependent on the claimant for support; or

(iii) The residence is rented for the purpose of paying nursing home or hospital costs.

(b) The person claiming the credit must have owned, at the time of filing, in fee, as a life estate, or by contract purchase, the residence on which the property taxes have been imposed or if the person claiming the credit lives in a cooperative housing association, corporation, or partnership, the person must own a share therein representing the unit or portion of the structure in which the person resides. For purposes of this subsection, a residence owned by a marital community or owned by cotenants is deemed to be owned by each spouse or cotenant, and any lease for life is deemed a life estate.

(4) RCW 84.36.383, 84.36.385, 84.36.387, and 84.36.389 apply to this section.

Sec. 2. RCW 84.52.080 and 1989 c 378 s 16 are each amended to read as follows:

(1) The county assessor shall extend the taxes upon the tax rolls in the form herein prescribed. The rate percent necessary to raise the amounts of taxes levied for state and county purposes, and for purposes of taxing districts coextensive with the county, shall be computed upon the assessed value of the property of the county; the rate percent necessary to raise the amount of taxes levied for any taxing district within the county shall be computed upon the assessed value of the property of the district; all taxes assessed against any property shall be added together and extended on the rolls in a column headed consolidated or total tax. In extending any tax, whenever it amounts to a fractional part of a cent greater than five mills it shall be made one cent, and whenever it amounts to five mills or less than five mills it shall be dropped. The amount of all taxes shall be entered in the proper columns, as shown by entering the rate percent necessary to raise the consolidated or total tax and the total tax assessed against the property.

(2) After entering the amounts under subsection (1) of this section, the county assessor shall compute the amount of credit authorized under section 1 of this act for each parcel of property. The credit allowed for any property shall be extended on the rolls in a column headed tax credit. The county treasurer shall subtract the amount of the credit from the total tax and enter this amount in a column headed tax payable.

(3) For the purpose of computing the rate necessary to raise the amount of any excess levy in a taxing district which has classified or designated forest land under chapter 84.33 RCW, other than the state, the county assessor shall add the district's timber assessed value, as defined in RCW 84.33.035, to the assessed value of the property: PROVIDED, That for school districts maintenance and operations levies only one-half of the district's timber assessed value or eighty percent of the timber roll of such district in calendar year 1983 as determined under chapter 84.33 RCW, whichever is greater, shall be added.

((~~(3)~~)) (4) Upon the completion of such tax extension, it shall be the duty of the county assessor to make in each assessment book, tax roll or list a certificate in the following form:

I, . . . . . ., assessor of . . . . . . county, state of Washington, do hereby certify that the foregoing is a correct list of taxes levied on the real and personal property in the county of . . . . . . for the year ((~~one thousand nine hundred and~~)) . . . . . .

Witness my hand this . . . . day of . . . . . ., ((19)). . . .

.................. , County Assessor

((~~(4)~~)) (5) The county assessor shall deliver said tax rolls to the county treasurer, on or before the fifteenth day of January, taking receipt therefor, and at the same time the county assessor shall provide the county auditor with an abstract of the tax rolls showing the total amount of taxes collectible in each of the taxing districts.

Sec. 3. 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. 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, the amount of any credit under section 1 of this act, and the tax payable. The state tax credit authorized in section 1 of this act shall be credited against any state tax payable on the property. 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~~)).

(2) 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 is that person whose name appears on the tax roll herein mentioned((~~: PROVIDED, FURTHER, That~~)). If no name so appears 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.

Sec. 4. RCW 84.36.383 and 1995 1st sp.s. c 8 s 2 are each amended to read as follows:

As used in RCW 84.36.381 through 84.36.389 and section 1 of this act, except where the context clearly indicates a different meaning:

(1) The term "residence" shall mean a single family dwelling unit whether such unit be separate or part of a multiunit dwelling, including the land on which such dwelling stands not to exceed one acre. The term shall also include a share ownership in a cooperative housing association, corporation, or partnership if the person claiming exemption can establish that his or her share represents the specific unit or portion of such structure in which he or she resides. The term shall also include a single family dwelling situated upon lands the fee of which is vested in the United States or any instrumentality thereof including an Indian tribe or in the state of Washington, and notwithstanding the provisions of RCW 84.04.080 and 84.04.090, such a residence shall be deemed real property.

(2) The term "real property" shall also include 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.

(3) "Department" shall mean the state department of revenue.

(4) "Combined disposable income" means the disposable income of the person claiming the exemption, plus the disposable income of his or her spouse, and the disposable income of each cotenant occupying the residence for the assessment year, less amounts paid by the person claiming the exemption or his or her spouse during the assessment year for:

(a) Drugs supplied by prescription of a medical practitioner authorized by the laws of this state or another jurisdiction to issue prescriptions; and

(b) The treatment or care of either person received in the home or in a nursing home.

(5) "Disposable income" means adjusted gross income as defined in the federal internal revenue code, as amended prior to January 1, 1989, or such subsequent date as the director may provide by rule consistent with the purpose of this section, plus all of the following items to the extent they are not included in or have been deducted from adjusted gross income:

(a) Capital gains, other than nonrecognized gain on the sale of a principal residence under section 1034 of the federal internal revenue code, or gain excluded from income under section 121 of the federal internal revenue code to the extent it is reinvested in a new principal residence;

(b) Amounts deducted for loss;

(d) Pension and annuity receipts;

(e) Military pay and benefits other than attendant-care and medical-aid payments;

(f) Veterans benefits other than attendant-care and medical-aid payments;

(g) Federal social security act and railroad retirement benefits;

(h) Dividend receipts; and

(i) Interest received on state and municipal bonds.

(6) "Cotenant" means a person who resides with the person claiming the exemption and who has an ownership interest in the residence.

Sec. 5. RCW 84.36.385 and 1992 c 206 s 13 are each amended to read as follows:

(1) A claim for exemption under RCW 84.36.381 ((~~as now or hereafter amended,~~)) or a credit under section 1 of this act shall be made and filed at any time during the year for exemption or credit from taxes payable the following year and thereafter and solely upon forms as prescribed ((~~and furnished~~)) by the department of revenue. However, an exemption from tax under RCW 84.36.381 shall continue for no more than four years unless a renewal application is filed as provided in subsection (3) of this section. The county assessor may also require, by written notice, a renewal application following an amendment of the income requirements set forth in RCW 84.36.381. Renewal applications shall be on forms prescribed and furnished by the department of revenue. A credit under section 1 of this act shall continue each year as long as the residence is eligible for credit.

(2) A person granted an exemption under RCW 84.36.381 or a credit under section 1 of this act shall inform the county assessor of any change in status affecting ((~~the person's~~)) entitlement to the exemption or credit on forms prescribed and furnished by the department of revenue.

(3) Each person exempt from taxes under RCW 84.36.381 in 1993 and thereafter, shall file with the county assessor a renewal application not later than December 31 of the year the assessor notifies such person of the requirement to file the renewal application.

(4) Beginning in 1992 and in each of the three succeeding years, the county assessor shall notify approximately one-fourth of those persons exempt from taxes under RCW 84.36.381 in the current year who have not filed a renewal application within the previous four years, of the requirement to file a renewal application.

(5) If the assessor finds that the applicant does not meet the qualifications as set forth in RCW 84.36.381((~~, as now or hereafter amended~~)) or section 1 of this act, the claim or exemption shall be denied but such denial shall be subject to appeal under the provisions of RCW 84.48.010(5). If the applicant had received exemption or credit in prior years based on erroneous information, the taxes shall be collected subject to penalties as provided in RCW 84.40.130 for a period of not to exceed three years.

(6) The department and each local assessor is hereby directed to publicize the qualifications and manner of making claims under RCW 84.36.381 through 84.36.389 and section 1 of this act, through communications media, including such paid advertisements or notices as it deems appropriate. Notice of the qualifications, method of making applications, the penalties for not reporting a change in status, 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. 6. RCW 84.36.387 and 1992 c 206 s 14 are each amended to read as follows:

(1) All claims for exemption under RCW 84.36.381 or a credit under section 1 of this act shall be made and signed by the person entitled to the exemption or credit, by his or her attorney in fact or in the event the residence of such person 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, by such holder or by the owner, either before two witnesses or the county assessor or his or her deputy in the county where the real property is located: PROVIDED, That if a claim for exemption or credit is made by a person living in a cooperative housing association, corporation, or partnership, such claim shall be made and signed by the person entitled to the exemption or credit and by the authorized agent of such cooperative.

(2) If the taxpayer is unable to submit his or her own claim, the claim shall be submitted by a duly authorized agent or by a guardian or other person charged with the care of the person or property of such taxpayer.

(3) All claims for exemption and renewal applications under RCW 84.36.381 shall be accompanied by such documented verification of income as shall be prescribed by rule adopted by the department of revenue.

(4) Any person signing a false claim with the intent to defraud or evade the payment of any tax shall be guilty of the offense of perjury.

(5) The tax liability of a cooperative housing association, corporation, or partnership shall be reduced by the amount of tax exemption or credit to which a claimant residing therein is entitled and such cooperative shall reduce any amount owed by the claimant to the cooperative by such exact amount of tax exemption or credit or, if no amount be owed, the cooperative shall make payment to the claimant of such exact amount of exemption or credit.

(6) A remainderman or other person who would have otherwise paid the tax on real property that is the subject of an exemption granted under RCW 84.36.381 or a credit granted under section 1 of this act for an estate for life shall reduce the amount which would have been payable by the life tenant to the remainderman or other person to the extent of the exemption or credit. If no amount is owed or separately stated as an obligation between these persons, the remainderman or other person shall make payment to the life tenant in the exact amount of the exemption or credit.

Sec. 7. RCW 84.36.389 and 1979 ex.s. c 214 s 4 are each amended to read as follows:

(1) The director of the department of revenue shall adopt such rules ((~~and regulations~~)) and prescribe such forms as may be necessary and appropriate for implementation and administration of this chapter subject to chapter 34.05 RCW, the administrative procedure act.

(2) The department may conduct such audits of the administration of RCW 84.36.381 through 84.36.389 and section 1 of this act and the claims for exemption or credit filed thereunder as it considers necessary. The powers of the department under chapter 84.08 RCW apply to these audits.

(3) Any information or facts concerning confidential income data obtained by the assessor or the department, or their agents or employees, under subsection (2) of this section shall be used only to administer RCW 84.36.381 through 84.36.389. Notwithstanding any provision of law to the contrary, absent written consent by the person about whom the information or facts have been obtained, the confidential income data shall not be disclosed by the assessor or the assessor's agents or employees to anyone other than the department or the department's agents or employees nor by the department or the department's agents or employees to anyone other than the assessor or the assessor's agents or employees except in a judicial proceeding pertaining to the taxpayer's entitlement to the tax exemption under RCW 84.36.381 through 84.36.389 or credit under section 1 of this act. Any violation of this subsection is a misdemeanor.

NEW SECTION. Sec. 8. A new section is added to chapter 84.55 RCW to read as follows:

The state property tax levy for collection in 1997 shall be reduced by 5.0 percent of the levy amount that would otherwise be allowed under this chapter without regard to this section.

NEW SECTION. Sec. 9. Section 8 of this act is effective for taxes levied in 1997 and thereafter.

NEW SECTION. Sec. 10. The following acts or parts of acts are each repealed:

(1) RCW 84.55.--- and 1997 c . . . s 8 (section 8 of this act); and

(2) 1997 c . . . s 9 (section 9 of this act) (uncodified).

NEW SECTION. Sec. 11. 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. 12. (1) Sections 8 and 9 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect immediately.

(2) Sections 1 through 7 and 10 of this act take effect for taxes payable in 1998 if the proposed amendment to Article VII of the state Constitution providing tax credits for owner-occupied residential housing (SJR 8200) is validly submitted to and is approved and ratified by the voters at a general election held in November 1997. If the proposed amendment is not approved and ratified, sections 1 through 7 and 10 of this act are null and void in their entirety.