BILL REQ. #:  H-0258.1 

Prefiled 12/08/08. Read first time 01/12/09.   Referred to Committee on Finance.

     AN ACT Relating to eliminating the state property tax levy; amending RCW 84.52.065, 84.52.043, 84.52.050, 36.58.150, 36.60.040, 36.69.145, 36.73.060, 36.83.030, 36.100.050, 67.38.130, 84.52.010, and 84.69.020; and crating a new section.

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

Sec. 1   RCW 84.52.065 and 1991 sp.s. c 31 s 16 are each amended to read as follows:
     (1) Subject to the limitations in RCW 84.55.010, in each year the state shall levy for collection in the following year for the support of common schools of the state a tax ((of three dollars and sixty cents per thousand dollars of assessed value)) at the rate specified in subsection (2) of this section upon the assessed valuation of all taxable property within the state adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue.
     (2) The rate of state tax in subsection (1) of this section may not exceed:
     (a) Three dollars and sixty cents per thousand dollars of assessed value for taxes levied for collection in 2009, and before;
     (b) Three dollars per thousand dollars of assessed value for taxes levied for collection in 2010;
     (c) Two dollars and forty cents per thousand dollars of assessed value for taxes levied for collection in 2011;
     (d) One dollar and eighty cents per thousand dollars of assessed value for taxes levied for collection in 2012;
     (e) One dollar and twenty cents per thousand dollars of assessed value for taxes levied for collection in 2013;
     (f) Sixty cents per thousand dollars of assessed value for taxes levied for collection in 2014;
     (g) No tax may be levied under this section for taxes levied for collection in 2015 and thereafter.
     (3) As used in this section, "the support of common schools" includes the payment of the principal and interest on bonds issued for capital construction projects for the common schools.

Sec. 2   RCW 84.52.043 and 2005 c 122 s 3 are each amended to read as follows:
     Within and subject to the limitations imposed by RCW 84.52.050 as amended, the regular ad valorem tax levies upon real and personal property by the taxing districts hereafter named shall be as follows:
     (1) Levies of the senior taxing districts shall be as follows: (a) The levy by the state shall not exceed ((three dollars and sixty cents)) the dollar rate per thousand dollars of assessed value specified in RCW 84.52.065 adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue to be used exclusively for the support of the common schools; (b) the levy by any county shall not exceed one dollar and eighty cents per thousand dollars of assessed value; (c) the levy by any road district shall not exceed two dollars and twenty-five cents per thousand dollars of assessed value; and (d) the levy by any city or town shall not exceed three dollars and thirty-seven and one-half cents per thousand dollars of assessed value. However any county is hereby authorized to increase its levy from one dollar and eighty cents to a rate not to exceed two dollars and forty-seven and one-half cents per thousand dollars of assessed value for general county purposes if the total levies for both the county and any road district within the county do not exceed four dollars and five cents per thousand dollars of assessed value, and no other taxing district has its levy reduced as a result of the increased county levy.
     (2) The aggregate levies of junior taxing districts and senior taxing districts, other than the state, shall not exceed five dollars and ninety cents per thousand dollars of assessed valuation. The term "junior taxing districts" includes all taxing districts other than the state, counties, road districts, cities, towns, port districts, and public utility districts. The limitations provided in this subsection shall not apply to: (a) Levies at the rates provided by existing law by or for any port or public utility district; (b) excess property tax levies authorized in Article VII, section 2 of the state Constitution; (c) levies for acquiring conservation futures as authorized under RCW 84.34.230; (d) levies for emergency medical care or emergency medical services imposed under RCW 84.52.069; (e) levies to finance affordable housing for very low-income housing imposed under RCW 84.52.105; (f) the portions of levies by metropolitan park districts that are protected under RCW 84.52.120; (g) levies imposed by ferry districts under RCW 36.54.130; (h) levies for criminal justice purposes under RCW 84.52.135; and (i) the portions of levies by fire protection districts that are protected under RCW 84.52.125.

Sec. 3   RCW 84.52.050 and 1973 1st ex.s. c 194 s 1 are each amended to read as follows:
     (1) Except as hereinafter provided, the aggregate of all tax levies upon real and personal property by the state and all taxing districts, now existing or hereafter created, shall not in any year exceed ((one percentum)) the following percentage of the true and fair value of such property in money: ((PROVIDED, HOWEVER, That))
     (a) For taxes levied for collection in 2009, and before, 1.0 percent;
     (b) For taxes levied for collection in 2010, 0.94 percent;
     (c) For taxes levied for collection in 2011, 0.88 percent;
     (d) For taxes levied for collection in 2012, 0.82 percent;
     (e) For taxes levied for collection in 2013, 0.76 percent;
     (f) For taxes levied for collection in 2014, 0.70 percent;
     (g) For taxes levied for collection in 2015 and thereafter, 0.64 percent.
     (2) Nothing herein shall prevent levies at the rates now provided by law by or for any port or public utility district. The term "taxing district" for the purposes of this section shall mean any political subdivision, municipal corporation, district, or other governmental agency authorized by law to levy, or have levied for it, ad valorem taxes on property, other than a port or public utility district. Such aggregate limitation or any specific limitation imposed by law in conformity therewith may be exceeded only as authorized by law and in conformity with the provisions of Article VII, section 2(a), (b), or (c) of the Constitution of the state of Washington.
     (3) Nothing herein contained shall prohibit the legislature from allocating or reallocating the authority to levy taxes between the taxing districts of the state and its political subdivisions in a manner which complies with the aggregate tax limitation set forth in this section.

Sec. 4   RCW 36.58.150 and 1984 c 186 s 25 are each amended to read as follows:
     (1) A solid waste disposal district shall not have the power to levy an annual levy without voter approval, but it shall have the power to levy a tax, in excess of the ((one percent)) limitation in RCW 84.52.050, upon the property within the district for a one year period to be used for operating or capital purposes whenever authorized by the electors of the district pursuant to RCW 84.52.052 and Article VII, section 2(a) of the state Constitution.
     A solid waste disposal district may issue general obligation bonds for capital purposes only, subject to the limitations prescribed in RCW 39.36.020(1), and may provide for the retirement of the bonds by voter-approved bond retirement tax levies pursuant to Article VII, section 2(b) of the state Constitution and RCW 84.52.056. Such general obligation bonds shall be issued and sold in accordance with chapter 39.46 RCW.
     A solid waste disposal district may issue revenue bonds to fund its activities. Such revenue bonds may be in any form, including bearer bonds or registered bonds as provided in RCW 39.46.030.
     (2) Notwithstanding subsection (1) of this section, such revenue bonds may be issued and sold in accordance with chapter 39.46 RCW.

Sec. 5   RCW 36.60.040 and 1983 c 303 s 11 are each amended to read as follows:
     A county rail district is not authorized to impose a regular ad valorem property tax levy but may:
     (1) Levy an ad valorem property tax, in excess of the ((one percent)) limitation in RCW 84.52.050, upon the property within the district for a one-year period to be used for operating or capital purposes whenever authorized by the voters of the district pursuant to RCW 84.52.052 and Article VII, section 2(a) of the state Constitution.
     (2) Provide for the retirement of voter approved general obligation bonds, issued for capital purposes only, by levying bond retirement ad valorem property tax levies, in excess of the one percent limitation, whenever authorized by the voters of the district pursuant to Article VII, section 2(b) of the state Constitution and RCW 84.52.056.

Sec. 6   RCW 36.69.145 and 1994 c 156 s 3 are each amended to read as follows:
     (1) A park and recreation district may impose regular property tax levies in an amount equal to sixty cents or less per thousand dollars of assessed value of property in the district in each year for six consecutive years when specifically authorized so to do by a majority of at least three-fifths of the voters thereof approving a proposition authorizing the levies submitted at a special election or at the regular election of the district, at which election the number of voters voting "yes" on the proposition shall constitute three-fifths of a number equal to forty per centum of the number of voters voting in such district at the last preceding general election when the number of voters voting on the proposition does not exceed forty per centum of the number of voters voting in such taxing district in the last preceding general election; or by a majority of at least three-fifths of the voters thereof voting on the proposition if the number of voters voting on the proposition exceeds forty per centum of the number of voters voting in such taxing district in the last preceding general election. A proposition authorizing the tax levies shall not be submitted by a park and recreation district more than twice in any twelve-month period. Ballot propositions shall conform with RCW ((29.30.111)) 29A.36.210. In the event a park and recreation district is levying property taxes, which in combination with property taxes levied by other taxing districts subject to the ((one percent)) limitation provided for in ((Article 7, section 2, of our state Constitution)) RCW 84.52.050 result in taxes in excess of the limitation provided for in RCW 84.52.043, the park and recreation district property tax levy shall be reduced or eliminated before the property tax levies of other taxing districts are reduced.
     (2) The limitation in RCW 84.55.010 shall not apply to the first levy imposed under this section following the approval of the levies by the voters under subsection (1) of this section.

Sec. 7   RCW 36.73.060 and 2005 c 336 s 6 are each amended to read as follows:
     (1) A district may levy an ad valorem property tax in excess of the ((one percent)) limitation in RCW 84.52.050 upon the property within the district for a one-year period whenever authorized by the voters of the district pursuant to RCW 84.52.052 and Article VII, section 2(a) of the state Constitution.
     (2) A district may provide for the retirement of voter-approved general obligation bonds, issued for capital purposes only, by levying bond retirement ad valorem property tax levies in excess of the one percent limitation whenever authorized by the voters of the district pursuant to Article VII, section 2(b) of the state Constitution and RCW 84.52.056.

Sec. 8   RCW 36.83.030 and 1983 c 130 s 3 are each amended to read as follows:
     (1) A service district may levy an ad valorem property tax, in excess of the ((one percent)) limitation in RCW 84.52.050, upon the property within the district for a one-year period whenever authorized by the voters of the district pursuant to RCW 84.52.052 and Article VII, section 2(a) of the state Constitution.
     (2) A service district may provide for the retirement of voter approved general obligation bonds, issued for capital purposes only, by levying bond retirement ad valorem property tax levies, in excess of the one percent limitation, whenever authorized by the voters of the district pursuant to Article VII, section 2(b) of the state Constitution and RCW 84.52.056.

Sec. 9   RCW 36.100.050 and 1988 ex.s. c 1 s 15 are each amended to read as follows:
     (1) A public facilities district may levy an ad valorem property tax, in excess of the ((one percent)) limitation in RCW 84.52.050, upon the property within the district for a one-year period to be used for operating or capital purposes whenever authorized by the voters of the district pursuant to RCW 84.52.052 and Article VII, section 2(a) of the state Constitution.
     (2) A public facilities district may provide for the retirement of voter-approved general obligation bonds, issued for capital purposes only, by levying bond retirement ad valorem property tax levies, in excess of the one percent limitation, whenever authorized by the voters of the district pursuant to Article VII, section 2(b) of the state Constitution and RCW 84.52.056.

Sec. 10   RCW 67.38.130 and 1984 c 131 s 4 are each amended to read as follows:
     The governing body of a cultural arts, stadium and convention district may levy or cause to levy the following ad valorem taxes:
     (1) Regular ad valorem property tax levies in an amount equal to twenty-five cents or less per thousand dollars of the assessed value of property in the district in each year for six consecutive years when specifically authorized so to do by a majority of at least three-fifths of the electors thereof approving a proposition authorizing the levies submitted at a general or special election, at which election the number of persons voting "yes" on the proposition shall constitute three-fifths of a number equal to forty percentum of the total votes cast in such taxing district at the last preceding general election; or by a majority of at least three-fifths of the electors thereof voting on the proposition when the number of electors voting yes on the proposition exceeds forty percentum of the total votes cast in such taxing district in the last preceding general election. Ballot propositions shall conform with RCW ((29.30.111)) 29A.36.210.
     In the event a cultural arts, stadium and convention district is levying property taxes, which in combination with property taxes levied by other taxing districts subject to the ((one percent)) limitation provided for in ((Article VII, section 2, of our state Constitution)) RCW 84.52.050 result in taxes in excess of the limitation provided for in RCW 84.52.043, the cultural arts, stadium and convention district property tax levy shall be reduced or eliminated before the property tax levies of other taxing districts are reduced: PROVIDED, That no cultural arts, stadium, and convention district may pledge anticipated revenues derived from the property tax herein authorized as security for payments of bonds issued pursuant to subsection (1) of this section: PROVIDED, FURTHER, That such limitation shall not apply to property taxes approved pursuant to subsections (2) and (3) of this section.
     The limitation in RCW 84.55.010 shall apply to levies after the first levy authorized under this section following the approval of such levy by voters pursuant to this section.
     (2) An annual excess ad valorem property tax for general district purposes when authorized by the district voters in the manner prescribed by ((section 2,)) Article VII, section 2 of the state Constitution and by RCW 84.52.052.
     (3) Multi-year excess ad valorem property tax levies used to retire general obligation bond issues when authorized by the district voters in the manner prescribed by ((section 2,)) Article VII, section 2 of the state Constitution and by RCW 84.52.056.
     The district shall include in its regular property tax levy for each year a sum sufficient to pay the interest and principal on all outstanding general obligation bonds issued without voter approval pursuant to RCW 67.38.110 and may include a sum sufficient to create a sinking fund for the redemption of all outstanding bonds.

Sec. 11   RCW 84.52.010 and 2007 c 54 s 26 are each amended to read as follows:
     Except as is permitted under RCW 84.55.050, all taxes shall be levied or voted in specific amounts.
     The rate percent of all taxes for state and county purposes, and purposes of taxing districts coextensive with the county, shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the county, as shown by the completed tax rolls of the county, and the rate percent of all taxes levied for purposes of taxing districts within any county shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the taxing districts respectively.
     When a county assessor finds that the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.043 or 84.52.050, exceeds the limitations provided in either of these sections, the assessor shall recompute and establish a consolidated levy in the following manner:
     (1) The full certified rates of tax levy for state, county, county road district, and city or town purposes shall be extended on the tax rolls in amounts not exceeding the limitations established by law; however any state levy shall take precedence over all other levies and shall not be reduced for any purpose other than that required by RCW 84.55.010. If, as a result of the levies imposed under RCW 36.54.130, 84.34.230, 84.52.069, 84.52.105, the portion of the levy by a metropolitan park district that was protected under RCW 84.52.120, 84.52.125, and 84.52.135, the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, then these levies shall be reduced as follows:
     (a) The portion of the levy by a fire protection district that is protected under RCW 84.52.125 shall be reduced until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or shall be eliminated;
     (b) If the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 still exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, the levy imposed by a county under RCW 84.52.135 must be reduced until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or must be eliminated;
     (c) If the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 still exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, the levy imposed by a ferry district under RCW 36.54.130 must be reduced until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or must be eliminated;
     (d) If the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 still exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, the portion of the levy by a metropolitan park district that is protected under RCW 84.52.120 shall be reduced until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or shall be eliminated;
     (e) If the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 still exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, then the levies imposed under RCW 84.34.230, 84.52.105, and any portion of the levy imposed under RCW 84.52.069 that is in excess of thirty cents per thousand dollars of assessed value, shall be reduced on a pro rata basis until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or shall be eliminated; and
     (f) If the combined rate of regular property tax levies that are subject to the ((one percent)) limitation under RCW 84.52.050 still exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050, then the thirty cents per thousand dollars of assessed value of tax levy imposed under RCW 84.52.069 shall be reduced until the combined rate no longer exceeds ((one percent of the true and fair value of any property)) the limitation under RCW 84.52.050 or eliminated.
     (2) The certified rates of tax levy subject to these limitations by all junior taxing districts imposing taxes on such property shall be reduced or eliminated as follows to bring the consolidated levy of taxes on such property within the provisions of these limitations:
     (a) First, the certified property tax levy rates of those junior taxing districts authorized under RCW 36.68.525, 36.69.145, 35.95A.100, and 67.38.130 shall be reduced on a pro rata basis or eliminated;
     (b) Second, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of flood control zone districts shall be reduced on a pro rata basis or eliminated;
     (c) Third, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of all other junior taxing districts, other than fire protection districts, regional fire protection service authorities, library districts, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts, and the first fifty cent per thousand dollars of assessed valuation levies for public hospital districts, shall be reduced on a pro rata basis or eliminated;
     (d) Fourth, if the consolidated tax levy rate still exceeds these limitations, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts created on or after January 1, 2002, shall be reduced on a pro rata basis or eliminated;
     (e) Fifth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.140 and 52.16.160 and regional fire protection service authorities under RCW 52.26.140(1) (b) and (c) shall be reduced on a pro rata basis or eliminated; and
     (f) Sixth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized for fire protection districts under RCW 52.16.130, regional fire protection service authorities under RCW 52.26.140(1)(a), library districts, metropolitan park districts created before January 1, 2002, under their first fifty cent per thousand dollars of assessed valuation levy, and public hospital districts under their first fifty cent per thousand dollars of assessed valuation levy, shall be reduced on a pro rata basis or eliminated.

Sec. 12   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 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 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)) the percentage under RCW 84.52.050 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 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.
     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.

NEW SECTION.  Sec. 13   This act applies to taxes levied for collection in 2010 and thereafter.