H 2006

H‑2006.1 _____________________________________________

SUBSTITUTE HOUSE BILL 1011

_____________________________________________

State of Washington 57th Legislature 2001 Regular Session

By House Committee on Finance (originally sponsored by Representatives Campbell, Conway, Benson, Mielke, Skinner, Pennington, DeBolt, Delvin, Ogden, Esser, Reardon, Linville, Pearson, Alexander, Barlean, Ericksen, Carrell, Morell, Dunn, Van Luven, O'Brien, Ahern and Talcott)

READ FIRST TIME 02/26/01.

_1 AN ACT Relating to property tax exemptions for persons with

_2 disabilities related to the performance of military duties;

_3 amending RCW 84.36.379, 84.36.381, and 84.36.383; and creating a

_4 new section.

_5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_6 Sec. 1. RCW 84.36.379 and 2000 c 103 s 25 are each amended to read

_7 as follows:

_8 The legislature finds that the property tax exemption

_9 authorized by Article VII, section 10 of the state Constitution

10 should be made available on the basis of a retired person's

11 ability to pay property taxes((~~. The legislature further finds~~))

12 and that the best measure of a retired person's ability to pay

13 taxes is that person's disposable income as defined in RCW

14 84.36.383. The legislature further finds that veterans with one

15 hundred percent service-connected disabilities have given so much

16 to our country that they deserve property tax relief.

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_1 Sec. 2. RCW 84.36.381 and 1998 c 333 s 1 are each amended to read

_2 as follows:

_3 A person shall be exempt from any legal obligation to pay all

_4 or a portion of the amount of excess and regular real property

_5 taxes due and payable in the year following the year in which a

_6 claim is filed, and thereafter, in accordance with the following:

_7 (1) The property taxes must have been imposed upon a residence

_8 which was occupied by the person claiming the exemption as a

_9 principal place of residence as of the time of filing: PROVIDED,

10 That any person who sells, transfers, or is displaced from his or

11 her residence may transfer his or her exemption status to a

12 replacement residence, but no claimant shall receive an exemption

13 on more than one residence in any year: PROVIDED FURTHER, That

14 confinement of the person to a hospital or nursing home shall not

15 disqualify the claim of exemption if:

16 (a) The residence is temporarily unoccupied;

17 (b) The residence is occupied by a spouse and/or a person

18 financially dependent on the claimant for support; or

19 (c) The residence is rented for the purpose of paying nursing

20 home or hospital costs;

21 (2) The person claiming the exemption must have owned, at the

22 time of filing, in fee, as a life estate, or by contract purchase,

23 the residence on which the property taxes have been imposed or if

24 the person claiming the exemption lives in a cooperative housing

25 association, corporation, or partnership, such person must own a

26 share therein representing the unit or portion of the structure in

27 which he or she resides. For purposes of this subsection, a

28 residence owned by a marital community or owned by cotenants shall

29 be deemed to be owned by each spouse or cotenant, and any lease

30 for life shall be deemed a life estate;

31 (3) The person claiming the exemption must be sixty-one years

32 of age or older on December 31st of the year in which the

33 exemption claim is filed, or must have been, at the time of

34 filing, retired from regular gainful employment by reason of

35 physical disability: PROVIDED, That any surviving spouse of a

36 person who was receiving an exemption at the time of the person's

37 death shall qualify if the surviving spouse is fifty-seven years

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_1 of age or older and otherwise meets the requirements of this

_2 section;

_3 (4) Except for veterans of the armed forces of the United

_4 States with one hundred percent service-connected disabilities,

_5 the amount that the person shall be exempt from an obligation to

_6 pay shall be calculated on the basis of combined disposable

_7 income, as defined in RCW 84.36.383. If the person claiming the

_8 exemption was retired for two months or more of the assessment

_9 year, the combined disposable income of such person shall be

10 calculated by multiplying the average monthly combined disposable

11 income of such person during the months such person was retired by

12 twelve. If the income of the person claiming exemption is reduced

13 for two or more months of the assessment year by reason of the

14 death of the person's spouse, or when other substantial changes

15 occur in disposable income that are likely to continue for an

16 indefinite period of time, the combined disposable income of such

17 person shall be calculated by multiplying the average monthly

18 combined disposable income of such person after such occurrences

19 by twelve. If it is necessary to estimate income to comply with

20 this subsection, the assessor may require confirming documentation

21 of such income prior to May 31 of the year following application;

22 (5)(a) A person who otherwise qualifies under this section and

23 has a combined disposable income of thirty thousand dollars or

24 less or who is a veteran of the armed forces of the United States

25 with a one hundred percent service-connected disability shall be

26 exempt from all excess property taxes; and

27 (b)(i) A person who otherwise qualifies under this section and

28 has a combined disposable income of twenty-four thousand dollars

29 or less but greater than eighteen thousand dollars shall be exempt

30 from all regular property taxes on the greater of forty thousand

31 dollars or thirty-five percent of the valuation of his or her

32 residence, but not to exceed sixty thousand dollars of the

33 valuation of his or her residence; or

34 (ii) A person who otherwise qualifies under this section and

35 has a combined disposable income of eighteen thousand dollars or

36 less or who is a veteran of the armed forces of the United States

37 with a one hundred percent service-connected disability shall be

38 exempt from all regular property taxes on the greater of fifty

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_1 thousand dollars or sixty percent of the valuation of his or her

_2 residence; and

_3 (6) For a person who otherwise qualifies under this section and

_4 has a combined disposable income of thirty thousand dollars or

_5 less or who is a veteran of the armed forces of the United States

_6 with a one hundred percent service-connected disability, the

_7 valuation of the residence shall be the assessed value of the

_8 residence on the later of January 1, 1995, or January 1st of the

_9 assessment year the person first qualifies under this section. If

10 the person subsequently fails to qualify under this section only

11 for one year because of high income, this same valuation shall be

12 used upon requalification. If the person fails to qualify for more

13 than one year in succession because of high income or fails to

14 qualify for any other reason, the valuation upon requalification

15 shall be the assessed value on January 1st of the assessment year

16 in which the person requalifies. If the person transfers the

17 exemption under this section to a different residence, the

18 valuation of the different residence shall be the assessed value

19 of the different residence on January 1st of the assessment year

20 in which the person transfers the exemption.

21 In no event may the valuation under this subsection be greater

22 than the true and fair value of the residence on January 1st of

23 the assessment year.

24 This subsection does not apply to subsequent improvements to

25 the property in the year in which the improvements are made.

26 Subsequent improvements to the property shall be added to the

27 value otherwise determined under this subsection at their true and

28 fair value in the year in which they are made.

29 Sec. 3. RCW 84.36.383 and 1999 c 358 s 18 are each amended to read

30 as follows:

31 As used in RCW 84.36.381 through 84.36.389, except where the

32 context clearly indicates a different meaning:

33 (1) The term "residence" means a single family dwelling unit

34 whether such unit be separate or part of a multiunit dwelling,

35 including the land on which such dwelling stands not to exceed one

36 acre. The term shall also include a share ownership in a

37 cooperative housing association, corporation, or partnership if

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_1 the person claiming exemption can establish that his or her share

_2 represents the specific unit or portion of such structure in which

_3 he or she resides. The term shall also include a single family

_4 dwelling situated upon lands the fee of which is vested in the

_5 United States or any instrumentality thereof including an Indian

_6 tribe or in the state of Washington, and notwithstanding the

_7 provisions of RCW 84.04.080 and 84.04.090, such a residence shall

_8 be deemed real property.

_9 (2) The term "real property" shall also include a mobile home

10 which has substantially lost its identity as a mobile unit by

11 virtue of its being fixed in location upon land owned or leased by

12 the owner of the mobile home and placed on a foundation (posts or

13 blocks) with fixed pipe, connections with sewer, water, or other

14 utilities. A mobile home located on land leased by the owner of the

15 mobile home is subject, for tax billing, payment, and collection

16 purposes, only to the personal property provisions of chapter

17 84.56 RCW and RCW 84.60.040.

18 (3) "Department" means the state department of revenue.

19 (4) "Combined disposable income" means the disposable income of

20 the person claiming the exemption, plus the disposable income of

21 his or her spouse, and the disposable income of each cotenant

22 occupying the residence for the assessment year, less amounts paid

23 by the person claiming the exemption or his or her spouse during

24 the assessment year for:

25 (a) Drugs supplied by prescription of a medical practitioner

26 authorized by the laws of this state or another jurisdiction to

27 issue prescriptions; and

28 (b) The treatment or care of either person received in the home

29 or in a nursing home.

30 (5) "Disposable income" means adjusted gross income as defined

31 in the federal internal revenue code, as amended prior to January

32 1, 1989, or such subsequent date as the director may provide by

33 rule consistent with the purpose of this section, plus all of the

34 following items to the extent they are not included in or have

35 been deducted from adjusted gross income:

36 (a) Capital gains, other than gain excluded from income under

37 section 121 of the federal internal revenue code to the extent it

38 is reinvested in a new principal residence;

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_1 (b) Amounts deducted for loss;

_2 (c) Amounts deducted for depreciation;

_3 (d) Pension and annuity receipts;

_4 (e) Military pay and benefits other than attendant-care and

_5 medical-aid payments;

_6 (f) Veterans benefits, other than attendant-care and medical-

_7 aid payments and benefits for disabilities related to the

_8 performance of military duties;

_9 (g) Federal social security act and railroad retirement

10 benefits;

11 (h) Dividend receipts; and

12 (i) Interest received on state and municipal bonds.

13 (6) "Cotenant" means a person who resides with the person

14 claiming the exemption and who has an ownership interest in the

15 residence.

16 NEW SECTION. Sec. 4. This act applies to taxes levied for

17 collection in 2002 and thereafter.

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