SENATE BILL REPORT

SHB 2780

BYHouse Committee on Revenue (originally sponsored by Representatives Fraser, Belcher, Haugen, Brumsickle, Sayan, Wang, Bowman and Holland)

Changing provisions relating to levies.

House Committe on Revenue

Senate Committee on Governmental Operations

Senate Hearing Date(s):February 22, 1990

Majority Report:  Do pass.

      Signed by Senators McCaslin, Chairman; Thorsness, Vice Chairman; DeJarnatt, Patrick, Sutherland.

Senate Staff:Rod McAulay (786-7754); Eugene Green (786-7405)

                  February 22, 1990

AS REPORTED BY COMMITTEE ON GOVERNMENTAL OPERATIONS, FEBRUARY 22, 1990

BACKGROUND:

When a court orders a refund of property taxes that were found to be unlawfully collected, the county pays the refund out of the county's tax refund account.  This account is then replenished by a additional property tax levy the next year.  These tax refund levies have precedence over all other tax levies for the county or other taxing districts.

When so imposed, these levies are excluded from the 106 percent statutory lid law governing other tax levies.

A recent court decision concerning railroad rolling stock of two railroad companies has reduced actual property taxes paid for several years to 35 counties statewide.  The years affected for one railroad company were 1985 through 1988 and for another company, 1986 through 1989.  The court decision resulted in a reduction of actual property taxes paid for the years affected by approximately 17 percent or $4.5 million.  The taxpayer's taxes were reduced, rather than refunded.  Therefore, the counties do not have the authority to impose a refund levy to recover the reduced taxes.

SUMMARY:

In addition to the existing authority to levy additional taxes to pay for refunds, local taxing districts may impose property tax levies equal to the following amounts:

1)  Personal property taxes canceled as uncollectible within preceding 12 months; and

2)  Taxes not collected because of a change in assessed value made by the State Tax Appeals Board, the County Board of Equalization, or a court.

This new levy is not subject to the 106 percent property tax levy limit.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested January 30, 1990

Senate Committee - Testified: Mike Murphy, Thurston County Treasurer