HOUSE BILL REPORT
SB 5136
As Reported by House Committee On:
Local Government
Finance
Title: An act relating to fire protection district property tax levies.
Brief Description: Modifying fire protection district property tax levies.
Sponsors: Senators Doumit, Mulliken, Zarelli and Rasmussen.
Brief History:
Local Government: 3/21/05 [DP];
Finance: 3/29/05, 3/30/05 [DP].
Brief Summary of Bill |
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HOUSE COMMITTEE ON LOCAL GOVERNMENT
Majority Report: Do pass. Signed by 7 members: Representatives Simpson, Chair; Clibborn, Vice Chair; Schindler, Ranking Minority Member; Ahern, Assistant Ranking Minority Member; B. Sullivan, Takko and Woods.
Staff: CeCe Clynch (786-7168).
Background:
Property taxes are imposed by state and local governments. The county assessor determines
assessed value for each property. The county assessor also calculates the tax rate necessary to
raise the correct amount of property taxes for each taxing district. The assessor calculates the
rate so the individual district rate limit, the district revenue limit, and the aggregate rate limits
are all satisfied. The property tax bill for an individual property is determined by multiplying
the assessed value of the property by the tax rate for each taxing district in which the property
is located. The assessor delivers the county tax roll to the county treasurer. The county
treasurer collects property taxes based on the tax roll starting February 15 each year.
The sum of property tax rates is limited by the State Constitution to a maximum of 1 percent
of true and fair value, or $10 per $1,000 of market value. Property taxes that are subject to
this 1 percent limitation are referred to as regular property tax levies. The Constitution
provides a procedure for voter approval for tax rates that exceed the 1 percent limit. These
taxes are called "excess" levies.
The Legislature has established individual district rate maximums and aggregate rate
maximums to keep the total tax rate for regular property taxes within the constitutional limit.
For example, the state levy rate is limited to $3.60 per $1,000 of assessed value, county
general levies are limited to $1.80 per $1,000, county road levies are limited to $2.25 per
$1,000, and city levies are limited to $3.375 per $1,000. These districts are known as
"senior" districts. Junior districts such as fire, library, and hospital districts each have
specific rate limits as well. The tax rates for most of these senior and junior districts must fit
within an overall rate limit of $5.90 per $1,000 of value. There is a complex system of
prorating the various levies so that the total rate does not exceed $5.90. State statutes contain
schedules specifying the preferential order in which the various junior taxing district levies
will be prorated in the event that the $5.90 limit is exceeded. Under this prorationing system
senior districts are given preference over junior districts.
A few regular property tax levies are not placed into the $5.90 aggregate rate limit:
emergency medical service, affordable housing, conservation futures, and a portion of a
metropolitan park district's rate. However, these districts are subject to reduction if the rates
for these districts, the state property tax, and the districts subject to the $5.90 limit together
exceed the constitutional limit of $10 per $1,000 of market value.
As noted earlier, fire districts are categorized as "junior districts" and, therefore, are subject
to the statutory provisions that include such districts within the $5.90 aggregate rate limit.
However, in the statutory schedule determining the order of proration, fire districts are treated
preferentially, insofar as they are listed last among the junior districts in the order of
proration.
Summary of Bill:
Special protection against proration of fire district tax levies.
Fire district tax levies receive partial protection in the event proration becomes necessary
among the various junior and senior taxing districts. Specifically, should proration be
required, fire districts are allowed to continue to receive a total of 25 cents per $1,000 of the
assessed value of the applicable tax levies even if the total amount of the junior and senior
tax levies exceed the $5.90 aggregate rate limit.
Exception to fire district tax levy protections.
However, the act specifies that the special protection afforded fire district tax levies, as
described above, will be reduced to the extent necessary to ensure that the total tax rate does
not exceed the 1 percent per $1,000 of assessed value limit prescribed by the Washington
State Constitution.
The act applies to taxes levied for collection in 2006 and thereafter.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is
passed.
Testimony For: This is the third time that this bill has been before the House. Each time it passed the House unanimously. This is the first year it has also passed the Senate. The bill protects up to 25 cents of fire district levy money in a prorationing situation.
Testimony Against: None.
Persons Testifying: Ryan Spiller, Washington Fire Commissioners.
HOUSE COMMITTEE ON FINANCE
Majority Report: Do pass. Signed by 9 members: Representatives McIntire, Chair; Hunter, Vice Chair; Orcutt, Ranking Minority Member; Roach, Assistant Ranking Minority Member; Ahern, Conway, Ericksen, Hasegawa and Santos.
Staff: Rick Peterson (786-7150).
Summary of Recommendation of Committee On Finance Compared to
Recommendation of Committee On Local Government:
No new changes were recommended.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.
Testimony For: Fire districts go to the voters with a levy for approval and the voters expect the services paid by the levy. The bill allows the districts to collect the rate approved by the voters in cases where prorationing occurs.
Testimony Against: None
Persons Testifying: Ryan Spiller, Washington Fire Commissioners, and Gordon Walgren, Washington Fire Chiefs.