HOUSE BILL REPORT

HJR 4209

BYRepresentatives Winsley, Leonard, Ballard, Anderson, Ferguson, Nutley, Locke, Ebersole, Brekke, Nelson, Todd, Walk, Patrick, Brough and P. King 

Amending the Constitution to allow current use valuation for low-income housing and mobile home parks.

House Committe on Housing

Majority Report:  Do pass.  (8)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Ballard, Inslee, Rector and Todd.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 16, 1989

BACKGROUND:

The taxation of real estate is guided by Article VII, Section 1 of the Constitution of the state of Washington, which provides as follows: "All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax...."

Chapter 84.40 RCW, prescribes the basis of valuation of all property for purposes of taxation.  This chapter states that: "All property shall be valued at one hundred percent of its true and fair value in money and assessed on the same basis unless specifically provided otherwise by law."

The current requirement that all property be valued on the basis of highest and best use, instead of current use, has been cited as a potential hindrance to the development of affordable housing for low-income persons.

Any changes to the classification of property for taxation purposes will require a constitutional amendment, approved by a vote of the public.

SUMMARY:

A constitutional amendment to Article VII, Section 11 of the Constitution of the state of Washington will be submitted to the voters in November 1989, to allow property with buildings that are devoted primarily to low-income housing and contain at least five low-income dwelling units or property used for a mobile home park to be valued at its current use value rather than true and fair market value for property tax purposes.

Revenue:    This bill has a revenue impact.

Fiscal Note:      Requested January 30, 1989.

Effective Date:This bill takes effect after the approval by the voters in the November 1989 general election.

House Committee ‑ Testified For:    David Moseley, City of Seattle; and Maureen Kostyack, King County (with concern).

House Committee - Testified Against:      Fred Saeger, Washington Association of County Officials; and Bernie Ryan, King County Assessor's Office.

House Committee - Testimony For:    This is a very important tax incentive that can be used to save existing housing in downtown areas.  The use of current use valuation assessments is the least expensive way to save this supply of affordable housing.  Current use valuation is only part of an overall approach to preserve and develop housing that is affordable to lower income persons.  The use of current use valuation for mobile home parks without criteria for low-income households is the only concern in the bill.

House Committee - Testimony Against:      The state's support for common schools will be impacted by this bill.  There are taxing districts already at their maximum levels.  There is need for technical corrections to this bill in its present form.