SENATE BILL REPORT

SHB 695

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Hine, Bristow, Barnes, Unsoeld, Sayan, Todd, Allen, Madsen, J. Williams, Sanders, C. Smith, Baugher, Kremen, May, Brough, Rasmussen, Betrozoff and Rayburn)

Changing provisions relating to property tax exemptions for seniors and disabled persons.

House Committe on Ways & Means/Revenue

Senate Committee on Ways & Means

Senate Hearing Date(s):March 30, 1987

Majority Report:     Do pass as amended.

     Signed by Senators McDermott, Chairman; Bauer, Bluechel, Cantu, Craswell, Deccio, Hayner, Kreidler, McDonald, Owen, Rasmussen, Rinehart, Saling, Talmadge, Vognild, Wojahn.

Senate Staff:Stephen Rose (786-7443)

                March 31, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 30, 1987

BACKGROUND:

Qualifying senior citizens and disabled persons are entitled to a property tax exemption for various parts of regular and special levies.  Current dollar thresholds governing the exemptions were last set by the Legislature in 1982 for levies due in 1984 and thereafter.

Current law general qualifications are as follows:

1.  Sixty-one years of age or older on January 1st of the year in which the exemption claim is filed; OR:

2.  Retired from regular employment by reason of physical disability, provided that a surviving spouse of a person qualified at time of death if spouse is at least 57 years old and is otherwise qualified.

3.  Exemptions apply to the "principal" residence provided that any person who sells, transfers, or is displaced from a residence may transfer the exemption to another residence but the exemption applies to only one residence at a time.

4.  The person claiming the exemption must have owned the residence (marital community or ownership by co-tenants is deemed a life estate).

Current law income requirements and exemptions are as follows:

The income test is based on "combined disposable income" which is based on adjusted gross income" plus capital gains, deductions for loss, depreciation, pensions and annuities, military pay, veterans benefits, social security and railroad retirement, dividends, and state and municipal bond income.

Exemptions are as follows:  A) A person with combined disposable income of $15,000 or less is exempt from all excess levies;  B) A person with combined disposable income of $12,000 or less but greater than $9,000 is exempt from all regular levies on the greater of $20,000 in value or 30 percent of the total value of the residence not to exceed $40,000;  C) A person with combined disposable income of $9,000 or less is exempt from all regular levies on the greater of $25,000 in value or 50 percent of total value.

SUMMARY:

The income thresholds for senior citizen property tax exemptions are increased for taxes due in 1989.

The $15,000 income threshold for exemption from excess levies is increased to $17,000.

The $9,000 minimum income threshold for exemption from regular levies is increased to $12,000 and the assessed value threshold of $20,000 is increased to $24,000.  The 30 percent factor and the maximum $40,000 threshold for assessed value are unchanged.

SUMMARY OF PROPOSED SENATE AMENDMENT:

The income threshold for exemption from excess levies is increased to $18,000.

Revenue:   The bill has a revenue impact.

Fiscal Note:    requested

Effective Date:This act shall be effective for taxes levied for collection in 1989 and thereafter.

Senate Committee - Testified:   Fred Saeger, Washington Association of County Officials; Dave Rogers, Washington Public Utility Districts