SENATE BILL REPORT

3SSB 5550

BYSenate Committee on Ways & Means (originally sponsored by Senators Lee, Williams and Fleming)

Providing a procedure for the classification and valuation of property devoted primarily to low-income housing.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 6, 1989; February 28, 1989; January 17, 1990; January 24, 1990

Majority Report:  That Second Substitute Senate Bill No. 5550 be substituted therefor, and the second substitute bill do pass and be referred to Committee on Ways & Means.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McDonald, McMullen, Matson, Murray, Williams.

Senate Staff:Traci Anderson (786-7452)

                  January 25, 1990

Senate Committee on Ways & Means

Senate Hearing Date(s):February 5, 1990; February 6, 1990

Majority Report:  That Third Substitute Senate Bill No. 5550 be substituted therefor, and the third substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bauer, Bluechel, Cantu, Fleming, Gaspard, Hayner, Johnson, Lee, Moore, Niemi, Saling, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Terry Wilson (786-7715)

                  February 28, 1990

House Committe on Housing

Rereferred House Committee on Revenue

AS PASSED SENATE, FEBRUARY 13, 1990

BACKGROUND:

A proposed constitutional amendment, SJR 8212, would allow property with buildings that are devoted to low-income housing and containing at least five low-income dwelling units to be valued at current use value rather than true and fair market value for property tax purposes.  Current use taxation reduces redevelopment pressure.

SUMMARY:

Valuation of property with buildings, and valuation of mobile home parks, that are devoted to low-income housing and contain at least five low-income dwelling units, or low-income mobile home spaces in respect to mobile home parks, may be based on current use value rather than market value for property tax purposes.

A low-income person is defined as one whose annual family or household income does not exceed 50 percent of the median income in the area in which the qualifying property is located.

A dwelling unit is defined as a structure that is used as a home, residence, or sleeping area by one or more persons maintaining a common household, including but not limited to units of multiplexes and apartment buildings.

For property tax purposes, current use valuation is authorized for the property, including areas used for parking and landscaping required by local building and zoning ordinances, if it meets all of the following criteria:  (a) the property is devoted to low-income housing; (b) at least five dwelling units or mobile home spaces are occupied by persons of low-income;  (c) the rents charged to low-income persons are at or below market rates established by the federal government or a local housing authority, or at or below 15 percent of the area median income; and (d) the property complies with local health and safety standards.

Current use valuation is not authorized for:  (a) substandard buildings; (b) institutional housing, except housing under contract to a governmental organization or private health care organization;  (c) employee housing, including contract workers, employees, or relatives of the owner; and (d) any property beyond five acres.

In computing the current use value, the county assessor is to disregard:  (a) potential uses that might return a higher income; (b) rents that might be charged were the owner to maximize returns; and (c) the value of the property if either the land or the improvements were unencumbered by their current commitment to low-income housing.  The assessed value is to be the lesser of the property's value based on current use or its value if it were assessed without regard to this classification.

Property classified as "devoted to low-income housing" must remain in that use for at least ten years.  After eight years, the owner of the property may choose to change its use.  Two years' notice of a change in classification must be given to the assessor of the county in which the property is located.  Upon removal from classification, the property is subject to the same taxes, interest and penalties that apply to agricultural lands, timber lands, and other property under Chapter 84.34 RCW, the Open Space Act.

The Department of Community Development may publish and prepare data on median income figures.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: ECONOMIC DEVELOPMENT & LABOR:  Mike Ryherd, Low Income Housing Congress; John Woodring, Washington Mobile Park Owners Association; Teresa Bosler, Washington Mobile Park Owners Association; Fred McWherten, Washington Mobile Park Owners Association; Ken Katihara, Seattle Housing Development Consortium; Josephine Tamayo-Murray, Archdiocesan Housing Authority; Fred Saeger, Washington Association of County Officials; Paul Sikora, Downtown Seattle Association

Senate Committee - Testified: WAYS & MEANS:  Mike Ryherd, Low Income Housing Congress (pro)

HOUSE AMENDMENT:

The property is not required to be totally devoted to low-income housing.

The current use valuation could be applied only to those portions of the property that are dedicated to housing for persons of low-income or mobile home park spaces dedicated to persons of low-income.