BILL REQ. #:  S-4409.1 

Read first time 02/02/2004.   Referred to Committee on Ways & Means.

     AN ACT Relating to the determination of assessed value for property taxes; adding a new section to chapter 84.40 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 84.40 RCW to read as follows:
     (1) Unless the context clearly requires otherwise, the following definitions apply throughout this section.
     (a) "Base value" means the true and fair value of real property on January 1, 2004, or the true and fair value on January 1st of any year in which there is a change in ownership.
     (b) "Adjusted value" means the base value of real property, plus the true and fair value of new construction and improvements to real property occurring after January 1st of the year used to determine base value.
     (c)(i) "Change of ownership" means a transfer of a present interest in real property, including a transfer of the beneficial use of real property.
     (ii) "Change of ownership" includes, except as provided in (c) of this subsection:
     (A) Contracting to convey the title to or ownership of real property upon the fulfillment of one or more stated conditions if the right to possession of the property is transferred currently;
     (B) The creation, transfer, or termination of a joint tenancy interest;
     (C) The creation, transfer, or termination of a tenancy-in-common interest;
     (D) The vesting of a right of possession or enjoyment of a remainder or reversionary interest that occurs upon the termination of a life estate or other similar precedent property interest;
     (E) An interest that vests in persons other than the trustor if a revocable trust becomes irrevocable; and
     (F) The transfer of stock of a cooperative housing corporation, vested with legal title to real property, that conveys to the transferee the exclusive right to occupancy and possession of the property or a portion of the property.
     (iii) "Change of ownership" does not include:
     (A) A transfer between co-owners that results in a change in the method of holding title to the real property transferred without changing the proportional interests of the co-owners in the real property, such as a partition of a tenancy in common;
     (B) A transfer for the purpose of merely perfecting title to the real property;
     (C) The creation, assignment, termination, or reconveyance of a security interest in real property, or the substitution of a trustee under a security instrument;
     (D) A transfer of real property by the trustor, or by the trustor's spouse, or by both, into a trust for so long as the transferor is the sole present beneficiary of the trust, or the trust is revocable, or any transfer of real property by a trustee of such trust back to the trustor;
     (E) A transfer of real property by an instrument whose terms reserve to the transferor an estate for years or an estate for life. However, the termination of an estate for years or life estate constitutes a change of ownership;
     (F) A transfer of real property between or among the same parties for the purpose of correcting or reforming a deed to express the true intention of the parties, if the original relationship between the grantor and grantee is not changed; or
     (G) An interspousal transfer of real property, including, but not limited to:
     (I) Transfers to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of the trust to the spouse of the trustor;
     (II) Transfers that take effect upon the death of a spouse;
     (III) Transfers to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of marriage or legal separation; and
     (IV) The creation, transfer, or termination, solely between spouses, of any co-owner's interest.
     (2) The assessed value of real property shall be its adjusted value.

NEW SECTION.  Sec. 2   This act applies to taxes levied for collection in 2006 and thereafter.