6205 AMH KIRB ADAM 269

SB 6205 - H AMD 1268

By Representative Kirby

On page 3, beginning on line 28, strike all of subsection (10) and insert the following:

"(10)(a) If the highest amount bid for any separate unit tract or lot exceeds the minimum bid due upon the whole property included in the certificate of delinquency, the ((~~excess~~)) surplus funds must be ((~~refunded~~)) distributed, following payment of all recorded water-sewer district liens, on application therefor, to the ((~~record owner of the property. The record owner of the property is the person who held title on the date of issuance of the certificate of delinquency~~)) persons or entities with a recorded interest in or lien of record upon the property eliminated by the tax sale under this section, or to such persons or entities' heirs, assigns, or attorney-in-fact acting under power of attorney, in the order of priority that the recorded interest or lien of record attached to the property as determined by the county treasurer in accordance with this subsection (10). After any required payments to claimants with a recorded interest in or lien of record upon the property, any remaining surplus funds must be paid to the record owner of the property, if the record owner submits a claim in accordance with this subsection (10).

(b)(i) The county treasurer must determine the priority to any surplus funds by reference to the title search report ordered or conducted in accordance with RCW 84.64.050(4). At the county treasurer's discretion, the county treasurer may require a claimant to submit, and the county treasurer may consider, any other information or proof the county treasurer deems necessary or appropriate to establish a claimant's rights to all or any portion of the surplus funds.

(ii) The county treasurer may charge a claimant a fee in an amount equal to the county treasurer's expected costs of determining priority to and distributing any surplus funds.

(iii) After the expiration of one year from the date of the recordation of the tax deed to the purchaser, if a claim or claims for a payment of surplus funds are submitted to the county treasurer, the county treasurer must promptly determine the priority to any surplus funds and must mail notice, by first-class mail, to all persons or entities who submitted a claim for a payment of surplus funds, of the county treasurer's intent to distribute surplus funds pursuant to this section. The county treasurer must mail notice to claimants under this subsection (10)(b)(iii) only once, and may not accept a claim for a payment of surplus funds more than three years after the date of the tax sale or after surplus funds are distributed to a claimant or claimants pursuant to this subsection (10), whichever is sooner.

(iv) Upon the expiration of ninety days from the date the county treasurer mails notice to claimants of the county treasurer's intent to distribute surplus funds, and subject to (c) of this subsection, the county treasurer must promptly distribute surplus funds to the claimant or claimants the county treasurer determines have priority to the surplus funds.

(i) Sooner than one year following the recordation of the tax deed to the purchaser;

(ii) Sooner than ninety days after the county treasurer mails the notice of intent to distribute surplus funds to claimants in accordance with subsection (10)(b)(iii) of this section;

(iii) While an appeal under RCW 84.64.120 is pending final resolution by a court of law;

(iv) While an action or proceeding initiated in accordance with (d) of this subsection is pending final resolution by a court of law; or

(v) To a person or entity who does not submit a claim for a payment of the surplus funds to the county treasurer.

(d) Any action or proceeding to review a decision by a county treasurer distributing surplus funds pursuant to this subsection (10) must be:

(i) Commenced within ninety days after the date the notice of the county treasurer's intent to distribute surplus funds is mailed to claimants in accordance with (b)(iii) of this subsection; and

(ii) Filed in the superior court that gave judgment for the taxes, interests, and costs that appeared due on the property pursuant to subsection (3) of this section.

(e) For purposes of this section, the record owner of the property is the person who held title to the property immediately before title transferred to the tax sale purchaser in accordance with subsection (11) of this section. Assignments of interests, deeds, or other documents executed or recorded after filing the certificate of delinquency do not affect the payment of excess funds to the record owner. In the event that no claim for the excess is received by the county treasurer within three years after the date of the sale, the treasurer must at expiration of the three year period deposit the excess in the current expense fund of the county, which extinguishes all claims by any owner to the excess funds."

EFFECT: Revises current law provisions governing the distribution of excess funds from a tax foreclosure sale. Removes provisions stating that excess funds remaining after payment of the tax debt and any water-sewer district liens must be paid to the record owner of the property if the record owner makes application for the excess funds, and that if the record owner does not claim the excess funds within three years, the treasurer must deposit the excess funds in the county current expense fund.

Provides instead that following a tax foreclosure sale, persons or entities with a recorded interest in or lien of record upon the property have priority to the surplus funds remaining after payment of the tax debt and all recorded water-sewer district liens if they make a claim to the surplus funds. Provides that any remaining surplus funds must be paid to the record owner if the record owner submits a claim for the surplus funds. Revises the definition of "record owner" to mean the person who held title to the property immediately before title transferred to the tax sale purchaser, rather than the person who held title when the certificate of delinquency was issued.

Requires county treasurers to determine priority to the surplus funds and distribute surplus funds to lienholders and record owners who submit a claim and have a right to the funds, subject to the following parameters:

· The county treasurer must determine priority by reference to the title search report. The county treasurer may require a claimant to submit additional evidence as proof of a claim.

· The county treasurer may not determine priority to and distribute surplus funds prior to one year after the date of recordation of the tax deed to the purchaser.

· After expiration of the one-year waiting period, if a claim or claims for payment of surplus funds are submitted, the county treasurer must promptly determine priority to the surplus funds and mail a notice to each claimant that the county treasurer intends to distribute surplus funds.

· The county treasurer may not accept a claim for payment of surplus funds more than three years after the tax sale or after distribution of surplus funds to a claimant or claimants, whichever is sooner.

· The county treasurer may not distribute surplus funds until 90 days after mailing the required notice to the claimants. During this 90-day waiting period, a claimant may seek review of the county treasurer's decision regarding distribution by commencing an action in the superior court that issued the foreclosure judgment.

· In addition to the one-year and 90-day waiting periods, the county treasurer may not distribute surplus funds during the pendency of any court case appealing the underlying tax foreclosure sale or the county treasurer's notice of intent to distribute surplus funds.

· The county treasurer may impose a fee on claimants in an amount equal to the expected costs of determining priority and distributing funds.

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