"NEW SECTION.  Sec. 2   A new section is added to chapter 84.36 RCW to read as follows:
     (1) Eligible regulated real property is exempt from taxation from the state tax levy. Eligible regulated real property means real property for which the land value has been reduced by ten percent or more after November 20, 2002, as a result of regulation under a shoreline master program adopted under chapter 90.58 RCW or under an amendment to or new comprehensive plan or development regulations adopted under chapter 36.70A RCW. The exemption continues until the cumulative tax savings due to the exemption equals or exceeds the reduction in value.
     (2) A claim for exemption shall be made and filed on or before March 31st with the county assessor. The claim for exemption must be filed within two years of the adoption of the regulation. To establish the value reduction, the property owner may petition the county assessor under RCW 84.40.039. The value reduction shall be determined with reference to the value on January 1st of the year in which the regulation under subsection (1) of this section is adopted.
     (3) When a value reduction is established by the assessor, the owner may petition the county board of equalization for a change in the value reduction within thirty days of being notified of the assessor's valuation.
     (4) The assessor shall either approve or deny the exemption and notify the property owner in writing by August 1st. The property owner may appeal the assessor's determination under the provisions of RCW 84.48.010.
     (5) The levy for the state in any year shall be reduced as necessary to prevent exemptions under this section from resulting in a higher tax rate than would have occurred in the absence of the exemptions under this section.
     (6) This section applies to taxes levied for collection in 2006 and thereafter."