BILL REQ. #:  S-4429.1 

Read first time 01/20/2006.   Referred to Committee on Ways & Means.

     AN ACT Relating to the deferral of large property tax assessments; amending RCW 84.38.010 and 84.38.050; adding new sections to chapter 84.38 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 84.38 RCW to read as follows:
     The legislature finds that large and unanticipated increases in taxes on residential property, usually attributable to rapid increases in property values, cause undue and excessive hardships for many homeowners. These increased tax burdens put many of these homeowners at risk of being unable to remain in their residences and maintain their property. Temporary financial hardships, such as unemployment or medical costs, may also cause some homeowners to have insufficient resources to pay property tax bills. The deferral program created in section 2 of this act is intended to provide those distressed taxpayers with the ability to defer taxes due so that they will be able to remain in their homes while still paying an equitable share of the overall property tax burden.

NEW SECTION.  Sec. 2   A new section is added to chapter 84.38 RCW to read as follows:
     (1) A claimant may defer payment of that amount of real property taxes that exceeds six percent of the claimant's combined disposable income, but not to exceed two thousand five hundred dollars per year.
     (2) Deferral of taxes under this chapter is subject to the following conditions:
     (a) The claimant must have owned, at the time of filing, the residence on which the real property taxes have been imposed. For purposes of this subsection, a residence owned by a marital community or owned by cotenants shall be deemed to be owned by each spouse or cotenant. A claimant who has only a share ownership in cooperative housing, a life estate, a lease for life, or a revocable trust does not satisfy the ownership requirement.
     (b) The property taxes must have been imposed upon a residence that was occupied by the claimant as a principal place of residence.
     (c) A deferral is not allowed for taxes levied in the first full calendar year in which the person owns the residence.
     (d) The claimant must have and keep in force fire and casualty insurance in sufficient amount to protect the interest of the state in the claimant's equity value. If the claimant fails to keep fire and casualty insurance in force to the extent of the state's interest in the claimant's equity value, the amount deferred shall not exceed one hundred percent of the claimant's equity value in the land or lot only.
     (e) The total amount of taxes deferred, including interest thereon, must not exceed eighty percent of the claimant's equity value in the residence.

Sec. 3   RCW 84.38.010 and 1975 1st ex.s. c 291 s 26 are each amended to read as follows:
     The legislature finds that savings once deemed adequate for retirement living have been rendered inadequate by increased tax rates, increased property values, and the failure of pension systems to adequately reflect such factors. It is therefore deemed necessary that the legislature, in addition to that tax exemption as provided for in RCW 84.36.381 through 84.36.389 as now or hereafter amended, allow retired persons to defer payment of special assessments on their residences, and to defer their real property tax obligations on their residences, an amount of up to eighty percent of their equity in said property. ((This deferral program)) The deferral provided under RCW 84.38.030 is intended to assist retired persons in maintaining their dignity and a reasonable standard of living by residing in their own homes, providing for their own needs, and managing their own affairs without requiring assistance from public welfare programs.

Sec. 4   RCW 84.38.050 and 1979 ex.s. c 214 s 8 are each amended to read as follows:
     (1)(a) Declarations to defer property taxes for all years following the first year under RCW 84.38.030 may be made by filing with the county assessor no later than thirty days before the tax is due a renewal form in duplicate, prescribed by the department of revenue and supplied by the county assessor, which affirms the continued eligibility of the claimant.
     (b) In January of each year, the county assessor shall send to each claimant who has been granted deferral of ad valorem taxes for the previous year under RCW 84.38.030 renewal forms and notice to renew.
     (2) Declarations to defer special assessments shall be made by filing with the assessor no later than thirty days before the special assessment is due on a form to be prescribed by the department of revenue and supplied by the county assessor. Upon approval, the full amount of special assessments upon such claimant's residence shall be deferred but not to exceed an amount equal to eighty percent of the claimant's equity value in said property.

NEW SECTION.  Sec. 5   This act is effective for taxes levied for collection in 2007 and thereafter.