AN ACT Relating to property taxes; and amending RCW 84.52.010, 84.52.0501, and 84.52.100.

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

Sec. 1. Section 84.52.010, chapter 15, Laws of 1961 as last amended by section 7, chapter 274, Laws of 1988 and RCW 84.52.010 are each amended to read as follows:

Except as is permitted under RCW 84.55.050, all taxes shall be levied or voted in specific amounts.

The rate percent of all taxes for state and county purposes, and purposes of taxing districts coextensive with the county, shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the county, as shown by the completed tax rolls of the county, and the rate percent of all taxes levied for purposes of taxing districts within any county shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the taxing districts respectively.

When a county assessor finds that the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.043 or 84.52.050, as now or hereafter amended, exceeds the limitations provided in either of these sections, the assessor shall recompute and establish a consolidated levy in the following manner:

(1) The full certified rates of tax levy for state, county, county road district, and city or town purposes shall be extended on the tax rolls in amounts not exceeding the limitations established by law, subject to subsection (2)(e) of this section; however any state levy shall take precedence over all other levies and shall not be reduced for any purpose other than that required by RCW 84.55.010; and

(2) The certified rates of tax levy subject to these limitations by all junior taxing districts imposing taxes on such property shall be reduced or eliminated as follows to bring the consolidated levy of taxes on such property within the provisions of these limitations:

(a) First, the certified property tax levy rates of those junior taxing districts authorized under RCW 36.68.525, 36.69.145, and 67.38.130 shall be reduced on a pro rata basis or eliminated;

(b) Second, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of flood control zone districts shall be reduced on a pro rata basis or eliminated;

(c) Third, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of all other junior taxing districts, other than fire protection districts, public hospital districts, metropolitan park districts, cemetery districts, and library districts, shall be reduced on a pro rata basis or eliminated;

(d) Fourth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.140 and 52.16.160 shall be reduced on a pro rata basis or eliminated;

(e) Fifth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized for cities and towns, fire protection districts under RCW 52.16.130, public hospital districts, metropolitan park districts, cemetery districts, and library districts shall be adjusted as provided in RCW 84.52.0501; and

(f) Sixth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.130, and the certified property tax levy rates of public hospital districts, metropolitan park districts, cemetery districts, and library districts, shall be reduced on a pro rata basis or eliminated.

Sec. 2. Section 8, chapter 274, Laws of 1988 and RCW 84.52.0501 are each amended to read as follows:

(1) In any county, if, after any reduction in levy rates required by RCW 84.52.010(2)(a) through (d), the consolidated tax levy rate still exceeds the limitations in RCW 84.52.043 or 84.52.050, then the department pursuant to rules shall direct the county assessor to adjust the regular property tax levy rates in the following manner:

(a) First, the assessor determines a first preliminary rate pursuant to RCW 84.52.010(2)(f).

(b) Second, the assessor determines a second preliminary rate which is the additional rate, if any, permitted by RCW 84.52.100.

(i) If the preliminary rates together are sufficient to permit all rates subject to RCW 84.52.010(2)(f) to be levied without reduction, then the assessor shall extend on the tax rolls the full certified rates pursuant to RCW 84.52.010(2)(f) and 84.52.100.

(ii) If the preliminary rates together are not sufficient to permit all rates subject to RCW 84.52.010(2)(f) to be levied without reduction pursuant to both RCW 84.52.010(2)(f) and 84.52.100, the assessor shall reduce the rate of the taxing district subject to RCW 84.52.010(2)(e) with the smallest assessed valuation such that, after first allowing for any additional rate permitted by RCW 84.52.100, there is no reduction of the rates under RCW 84.52.010(2)(f). Where the reduction of the levy of a taxing district is not sufficient, the taxing district with the next smallest assessed valuation shall have its levy reduced under this subsection until there is no reduction of rates under RCW 84.52.010(2)(f). The assessor shall then extend on the tax rolls the rates derived pursuant to this subsection (b)(ii).

(2) The taxing districts whose levies would have been reduced but for subsection (1) of this section shall pay to each district that had its levy so reduced pursuant to subsection (1) of this section a proportionate share of the reduced amount based on the amount by which each district would have had its total levy rate reduced if subsection (1) of this section were not in effect and the rates had been adjusted pursuant to RCW 84.52.010(2)(f) and 84.52.100.

(a) In the case of a public hospital district, library district, fire protection district, cemetery district, or metropolitan park district whose levy is reduced under subsection (1) of this section, the district shall bear a proportionate share as if its rate were sufficient to collect its certified levy.

(b) In the case of a city or town that is annexed by a library district or a fire protection district, which city's or town's levy is reduced under this section, or is in a tax code area where a levy rate is reduced under this section, the city or town shall forgo receipt of, or pay to each district whose levy rate is reduced, ten percent of the amount which would otherwise be paid to the city or town from each district whose levy rate is not reduced as a result of subsection (1) of this section, collectively not to exceed one-half of the following amount: The assessed valuation of the reduced district multiplied by a rate equal to the city's or town's levy rate, calculated based on its certified levy request, plus the rate(s) of the annexing district(s) minus the rate the city or town would have been able to levy were it not annexed, not to exceed twenty-two and one- half cents.

(3) Fifty-five percent of the amount under subsection (2) of this section shall be distributed on or before May 31 of the tax collection year for which the levy is reduced and forty-five percent on or before November 30 of that year.

(4) This section shall expire on December 31, 1989.

Sec. 3. Section 7, chapter 138, Laws of 1987 as amended by section 6, chapter 274, Laws of 1988 and RCW 84.52.100 are each amended to read as follows:

(1) The governing body of any library district, public hospital district, metropolitan park district, cemetery district, or fire protection district may provide for the submission of a ballot proposition to the voters of the taxing district authorizing the taxing district to maintain its otherwise authorized tax levy rate, and authorizing an increase in the cumulative regular property tax limitation established in RCW 84.52.043 of five dollars and fifty-five cents per thousand dollars of assessed valuation within the taxing district, as provided in this section. A fire protection district may use this authority to increase its regular property tax levy up to fifty cents per thousand dollars of assessed valuation.

(2) A resolution by a governing body, requesting that a special election be called to submit such a ballot proposition to the voters, must be transmitted to the county legislative authority of the county, or county legislative authorities of the counties, within which the taxing district is located, at least forty-five days before the special election date at which the ballot proposition is submitted. The ballot proposition shall be worded substantially as follows:

"Shall the cumulative limitation on most regular property tax rates be increased by an amount not exceeding thirty-five cents per thousand dollars of assessed valuation for a five consecutive year period allowing (insert the name of the taxing district) to maintain its otherwise statutory authorized property tax rate?"

The ballot proposition for a fire protection district shall be worded substantially as follows:

"Shall the cumulative limitation on most regular property tax rates be increased by an amount not exceeding thirty-five cents per thousand dollars of assessed valuation for a five consecutive year period allowing (insert the name of the taxing district) to permit the fire protection district to impose its property tax at a value up to fifty cents per thousand dollars of assessed valuation?"

Approval of this ballot proposition by a simple majority vote shall authorize the following for the succeeding five consecutive year period: (a) Property tax rates of junior taxing districts are calculated first as if this proposition had not been approved; (b) subject to the one hundred six percent limitation, the regular property tax rate of the taxing district receiving such authorization is increased to a level not exceeding the lesser of: (i) Its maximum statutory authorized regular property tax rate; or (ii) whatever tax rate it otherwise would have been able to impose plus an additional thirty-five cents per thousand dollars of assessed valuation; and (c) the cumulative property tax rate limitation is increased within the boundaries of the taxing district receiving this authorization to an amount equal to five dollars and fifty-five cents per thousand dollars of assessed valuation plus the increased amount of the regular levy rate of this taxing district, but not to exceed five dollars and ninety cents per thousand dollars of assessed valuation.

(3) If two or more taxing districts that occupy a portion of the same territory receive such approval, the additional authorized taxing capacity above five dollars and fifty-five cents per thousand dollars of assessed valuation shall be distributed among these taxing districts by adjusting their levy rate requests in the same manner and under the same conditions as if they were the only taxing districts in the area subject to adjustment of their property tax rates and the levy rate adjustments were being made with the cumulative limitation of five dollars and fifty-five cents per thousand dollars of assessed valuation.

(4) Levies authorized under RCW 84.52.069 are not subject to the rate adjustments and the five dollar and ninety cent per thousand dollar of assessed valuation cumulative limitation on regular property tax rates established by this section.