BILL REQ. #:  H-4560.2 

Read first time 01/23/08.   Referred to Committee on Finance.

     AN ACT Relating to property tax relief for property damaged in the 2007 floods; amending RCW 84.69.020 and 84.70.010; adding a new section to chapter 84.36 RCW; and declaring an emergency.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 84.36 RCW to read as follows:
     Real and personal property reduced in value and subject to an abatement under RCW 84.70.010 is exempt from the state portion of the property tax for three calendar years, beginning in the calendar year in which the property initially qualifies under RCW 84.70.010. Property taxes already paid during the calendar year in which the property initially qualifies under this section are subject to refund under RCW 84.69.020.

Sec. 2   RCW 84.69.020 and 2005 c 502 s 9 are each amended to read as follows:
     On the order of the county treasurer, ad valorem taxes paid before or after delinquency shall be refunded if they were:
     (1) Paid more than once;
     (2) Paid as a result of manifest error in description;
     (3) Paid as a result of a clerical error in extending the tax rolls;
     (4) Paid as a result of other clerical errors in listing property;
     (5) Paid with respect to improvements which did not exist on assessment date;
     (6) Paid under levies or statutes adjudicated to be illegal or unconstitutional;
     (7) Paid as a result of mistake, inadvertence, or lack of knowledge by any person exempted from paying real property taxes or a portion thereof pursuant to RCW 84.36.381 through 84.36.389, as now or hereafter amended;
     (8) Paid as a result of mistake, inadvertence, or lack of knowledge by either a public official or employee or by any person with respect to real property in which the person paying the same has no legal interest;
     (9) Paid on the basis of an assessed valuation which was appealed to the county board of equalization and ordered reduced by the board;
     (10) Paid on the basis of an assessed valuation which was appealed to the state board of tax appeals and ordered reduced by the board((: PROVIDED, That)). However, the amount refunded under subsections (9) and (10) of this section shall only be for the difference between the tax paid on the basis of the appealed valuation and the tax payable on the valuation adjusted in accordance with the board's order;
     (11) Paid as a state property tax levied upon property, the assessed value of which has been established by the state board of tax appeals for the year of such levy((: PROVIDED, HOWEVER, That)). However, the amount refunded shall only be for the difference between the state property tax paid and the amount of state property tax which would, when added to all other property taxes within the one percent limitation of Article VII, section 2 of the state Constitution equal one percent of the assessed value established by the board;
     (12) Paid on the basis of an assessed valuation which was adjudicated to be unlawful or excessive((: PROVIDED, That)). However, the amount refunded shall be for the difference between the amount of tax which was paid on the basis of the valuation adjudged unlawful or excessive and the amount of tax payable on the basis of the assessed valuation determined as a result of the proceeding;
     (13) Paid on property acquired under RCW 84.60.050, and canceled under RCW 84.60.050(2);
     (14) Paid on the basis of an assessed valuation that was reduced under RCW 84.48.065;
     (15) Paid on the basis of an assessed valuation that was reduced under RCW 84.40.039; ((or))
     (16) Abated under RCW 84.70.010; or
     (17) Paid on the basis of property exempted later in the calendar year under section 1 of this act.
     No refunds under the provisions of this section shall be made because of any error in determining the valuation of property, except as authorized in subsections (9), (10), (11), and (12) of this section nor may any refunds be made if a bona fide purchaser has acquired rights that would preclude the assessment and collection of the refunded tax from the property that should properly have been charged with the tax. Any refunds made on delinquent taxes shall include the proportionate amount of interest and penalties paid. However, no refunds as a result of an incorrect payment authorized under subsection (8) of this section made by a third party payee shall be granted. The county treasurer may deduct from moneys collected for the benefit of the state's levy, refunds of the state levy including interest on the levy as provided by this section and chapter 84.68 RCW.
     The county treasurer of each county shall make all refunds determined to be authorized by this section, and by the first Monday in February of each year, report to the county legislative authority a list of all refunds made under this section during the previous year. The list is to include the name of the person receiving the refund, the amount of the refund, and the reason for the refund.

Sec. 3   RCW 84.70.010 and 2005 c 56 s 1 are each amended to read as follows:
     (1) If, on or before December 31 in any calendar year, any real or personal property placed upon the assessment roll of that year is destroyed in whole or in part, or is in an area that has been declared a disaster area by the governor or the county legislative authority and has been reduced in value by more than twenty percent as a result of a natural disaster, or by ten percent or more as a result of a natural disaster that occurred in December 2007 in a county designated by the president as a disaster area, the true and fair value of such property shall be reduced for that assessment year by an amount determined by taking the true and fair value of such taxable property before destruction or reduction in value and deduct therefrom the true and fair value of the remaining property after destruction or reduction in value.
     (2) Taxes levied for collection in the year in which the true and fair value has been reduced under subsection (1) of this section shall be abated in whole or in part as provided in this subsection. The amount of taxes to be abated shall be determined by first multiplying the amount deducted from the true and fair value under subsection (1) of this section by the rate of ((levy)) local levies applicable to the property in the tax year. Then divide the product by the number of days in the year and multiply the quotient by the number of days remaining in the calendar year after the date of the destruction or reduction in value of the property. If taxes abated under this section have been paid, the amount paid shall be refunded under RCW 84.69.020. The tax relief provided for in this section for the tax year in which the damage or destruction occurred does not apply to property damaged or destroyed voluntarily.
     (3) No reduction in the true and fair value or abatements shall be made more than three years after the date of destruction or reduction in value.
     (4) The assessor shall make such reduction on his or her own motion; however, the taxpayer may make application for reduction on forms prepared by the department and provided by the assessor. The assessor shall notify the taxpayer of the amount of reduction.
     (5) If destroyed property is replaced prior to the valuation dates contained in RCW 36.21.080 and 36.21.090, the total taxable value for that assessment year shall not exceed the value as of the appropriate valuation date in RCW 36.21.080 or 36.21.090, whichever is appropriate.
     (6) The taxpayer may appeal the amount of reduction to the county board of equalization in accordance with the provisions of RCW 84.40.038. The board shall reconvene, if necessary, to hear the appeal.

NEW SECTION.  Sec. 4   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.