S-0493.1

SENATE BILL 5221

BySenator Bateman

AN ACT Relating to simplifying processes and timelines related to personal property distraint; and amending RCW 84.56.070, 84.56.240, and 46.12.680.

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

Sec. 1. RCW 84.56.070 and 2020 c 175 s 1 are each amended to read as follows:

(1) The county treasurer must proceed to collect all personal property taxes after first completing the tax roll for the current year's collection.

(2) The treasurer must give notice by mail to all persons charged with personal property taxes, and if the taxes are not paid before they become delinquent, the treasurer must commence delinquent collection efforts. A delinquent collection charge for costs incurred by the treasurer may be added to the account.

(3) In the event that the treasurer is unable to collect the taxes when due under this section, the treasurer must prepare papers in distraint, except as provided in (a) of this subsection. The papers must contain a description of the personal property, the amount of taxes including any amounts deferred under chapters 84.37 and 84.38 RCW that are a lien on the personal property to be distrained, the amount of the accrued interest at the rate provided by law from the date of delinquency, and the name of the owner or reputed owner.

(a) Except as provided in (f) of this subsection, nontitle eliminated mobile homes and manufactured homes, as defined in RCW 46.04.302, are subject to distraint no sooner than three years after the date of first delinquency. If it is the opinion of the treasurer that the cost of such collection and distraint would cost the county more than the tax amount due, such taxes may be canceled as uncollectible as set out in RCW 84.56.240.

(b) The treasurer must without demand or notice distrain sufficient goods and chattels belonging to the person charged with the taxes to pay the same, with interest at the rate provided by law from the date of delinquency, together with all accruing costs. The treasurer must proceed to advertise the distraint by posting written notices in three public places in the county in which the property has been distrained, including the county courthouse. The notice must state the time when and place where the property will be sold.

(c) The county treasurer, or the treasurer's deputy, must tax the same fees for making the distraint and sale of goods and chattels for the payment of taxes as are allowed by law to sheriffs for making levy and sale of property on execution. Traveling fees must be computed from the county seat of the county to the place of making distraint.

(d) If the taxes for which the property is distrained, and the interest and costs accruing thereon, are not paid before the date appointed for the sale, which may not be less than ((ten))10 days after the taking of the property, the treasurer or treasurer's designee must proceed to sell the property at public auction, or so much thereof as is sufficient to pay the taxes and any amounts deferred under chapters 84.37 and 84.38 RCW that are a lien on the property to be sold, with interest and costs. ((If there is any excess of money arising from the sale of any personal property, the treasurer must pay the excess less any cost of the auction to the owner of the property so sold or to his or her legal representative.))If the highest amount bid for a mobile home, manufactured home, or park model, or improvements on real property exceeds the minimum bid due upon the whole property included in the notice of distraint, the excess must be refunded, on application therefor, to the record title owner of the property. The record title owner of the property is the person who held the title on the date of issuance of the notice of distraint. Assignments of interests, deeds, or other documents executed or recorded after filing the notice of distraint do not affect the payment of excess funds to the record title owner. In the event that no claim for the excess is received by the county treasurer within three years after the date of 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.

(e) If necessary to distrain any standing timber owned separately from the ownership of the land upon which the same may stand, or any fish trap, pound net, reef net, set net, or drag seine fishing location, or any other personal property as the treasurer determines to be incapable or reasonably impracticable of manual delivery, it is deemed to have been distrained and taken into possession when the treasurer has, at least thirty days before the date fixed for the sale thereof, filed with the auditor of the county wherein the property is located a notice in writing reciting that the treasurer has distrained the property. The notice must describe the property, give the name of the owner or reputed owner, the amount of the tax due, with interest, and the time and place of sale. A copy of the notice must also be sent to the owner or reputed owner at his or her last known address, by registered letter at least thirty days prior to the date of sale.

(f) If the county treasurer has reasonable grounds to believe that any personal property, including mobile homes, manufactured homes, or park model trailers, upon which taxes have been levied, but not paid, is about to be removed from the county where the property has been assessed, or is about to be destroyed, sold, or disposed of, the county treasurer may demand the taxes, without the notice provided for in this section, and if necessary distrain sufficient goods and chattels to pay the same.

(4) The county treasurer must waive outstanding interest and penalties on delinquent taxes due from the title owner of a mobile or manufactured home if the property is subject to an action for distraint under this section and the following requirements are met:

(a) The title owner is income-qualified under RCW 84.36.381(5)(a), as verified by the county assessor;

(b) The title owner occupies the property as the owner's principal place of residence;

(c) The title owner or agent is paying the delinquent base taxes owed on the year or years that the outstanding interest and penalties are being waived and submits a complete application at least fourteen days prior to recording of distraint documents; and

(d) The title owner has not previously received a waiver on the property as provided under this section.

(5) As an alternative to the sale procedure specified in this section, the county treasurer may conduct a public auction sale by electronic media pursuant to RCW 36.16.145.

Sec. 2. RCW 84.56.240 and 1997 c 393 s 14 are each amended to read as follows:

If the county treasurer is unable, for the want of goods or chattels whereupon to levy, to collect by distress or otherwise, the taxes, or any part thereof, or it is the opinion of the treasurer that the cost of such collection and distraint set out in RCW 84.56.070 would cost the county more than the tax amount due, which may have been assessed upon the personal property of any person or corporation, or an executor or administrator, guardian, receiver, accounting officer, agent or factor, the treasurer shall file with the county legislative authority, on the first day of February following, a list of such taxes, with an affidavit of the treasurer or of the deputy treasurer entrusted with the collection of the taxes, stating that the treasurer had made diligent search and inquiry for goods and chattels wherewith to make such taxes, and was unable to make or collect the same. The county legislative authority shall cancel such taxes as the county legislative authority is satisfied cannot be collected.

Sec. 3. RCW 46.12.680 and 2010 c 161 s 314 are each amended to read as follows:

(1) The department, county auditor or other agent, or subagent appointed by the director may register a vehicle and withhold issuance of a certificate of title or require a bond as a condition of issuing a certificate of title if the department is not satisfied:

(a) As to the ownership of the vehicle; or

(b) That there are no undisclosed security interests in the vehicle.

(2) A person who is unable to provide satisfactory evidence of ownership may:

(a) Apply for ownership in doubt and receive either a:

(i) Registration without a certificate of title for a three-year period; or

(ii) A bonded certificate of title with or without registration as described in subsection (3) of this section; or

(b) Petition any district court or superior court of any county in this state to receive a judgment awarding ownership of the vehicle; or

(c) Have a new certificate of title created if the mobile home, manufactured home, or park model is purchased in a county treasurer's foreclosure or distraint sale for nonpayment of taxes where no title can be found.

(3) A person who is either required by the department, county auditor or other agent, or subagent appointed by the director to file a bond or wants a certificate of title for a vehicle when ownership is in doubt shall file the bond for a three-year period. The bond must:

(a) Be in the form approved by the department;

(b) Be in an amount equal to one and one-half times the value of the vehicle as determined by the department;

(c) Be signed by the applicant and the bonding agent; and

(d) Offer protection to any previous owner, secured party, future purchaser, or their successors against any expense, loss, or damage, including reasonable attorneys' fees.

(4) A person who has or has held an interest in the vehicle may, during the three-year ownership in doubt period, petition any district court or superior court of any county in this state to receive a judgment either awarding ownership of the vehicle or be compensated for any expense, loss, or damage, including reasonable attorneys' fees. The total claim must not be more than the amount of the bond if a bond has been filed with the department.

(5) A person who has applied for ownership in doubt may apply for a certificate of title at any time during the three-year ownership in doubt period when satisfactory evidence of ownership becomes available. At the end of the three-year ownership in doubt period, the owner must apply to the department, county auditor or other agent, or subagent appointed by the director for a certificate of title. The new certificate of title will not include reference to the bond if a bond was filed with the department.

(6) A person applying for ownership in doubt must have acquired the vehicle by purchase, exchange, gift, lease, or inheritance from the owner of record or interim owner.

(7) Ownership in doubt does not apply to:

(a) Unauthorized vehicles, as defined in RCW 46.55.010;

(b) Abandoned vehicles, as defined in RCW 46.55.010;

(c) Snowmobiles, as defined in RCW 46.04.546; or

(d) Washington vehicle dealer sales, as defined in RCW 46.70.011.

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