AN ACT Relating to property tax exemptions for low and middle income families; and adding new sections to chapter 84.36 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that the property tax exemption authorized by Article VII, section __ (S-3594/90) of the state Constitution should be made available on the basis of a low or middle income family's ability to pay property taxes. The legislature further finds that the best measure of a family's ability to pay taxes is that family's income as defined in section 3 of this act and the market value of the residence.

NEW SECTION. Sec. 2. A person shall be exempt from any legal obligation to pay all or a portion of the amount of excess property taxes due and payable in the year following the year in which a claim is filed in accordance with the following:

(1) The property taxes must have been imposed upon a residence which was occupied by the person claiming the exemption as a principal place of residence as of January 1st of the year for which the exemption is claimed: PROVIDED, That any person who sells, transfers, or is displaced from his or her residence may transfer his or her exemption status to a qualified replacement residence, but no claimant shall receive an exemption on more than one residence in any year: PROVIDED FURTHER, That confinement of the person to a hospital or nursing home shall not disqualify the claim of exemption if the residence is temporarily unoccupied or if the residence is occupied by a spouse and/or a person financially dependent on the claimant for support;

(2) The person claiming the exemption must have owned, at the time of filing, in fee, as a life estate, or by contract purchase, the residence on which the property taxes have been imposed or if the person claiming the exemption lives in a cooperative housing association, corporation, or partnership, such person must own a share therein representing the unit or portion of the structure in which he or she resides. For purposes of this subsection, a residence owned by a marital community or owned by cotenants shall be deemed to be owned by each spouse or cotenant, and any lease for life shall be deemed a life estate. If the person claiming the exemption is a renter, the benefits of the exemption must accrue to the renter, as provided in section 4 of this act, in order for the renter to qualify for the exemption;

(3) A person who otherwise qualifies under this section and whose (a) total income of the household's/residences's inhabitants, as defined in section 3 of this act, is less than forty thousand dollars, and (b) "state equalized value," as defined in section 3 of this act, is less than one hundred ten thousand dollars, shall be exempt from all excess property taxes.

NEW SECTION. Sec. 3. As used in this act, except where the context clearly indicates a different meaning:

(1) The term "residence" shall mean a single family dwelling unit whether such unit be separate or part of a multiunit dwelling, including the land on which such dwelling stands not to exceed one acre. The term shall also include a share ownership in a cooperative housing association, corporation, or partnership if the person claiming exemption can establish that his or her share represents the specific unit or portion of such structure in which he or she resides. The term shall also include a single family dwelling situated upon lands the fee of which is vested in the United States or any instrumentality thereof including an Indian tribe or in the state of Washington, and notwithstanding the provisions of RCW 84.04.080, 84.04.090 or 84.40.250, such a residence shall be deemed real property.

(2) The term "real property" shall also include a mobile home which has substantially lost its identity as a mobile unit by virtue of its being fixed in location upon land owned or leased by the owner of the mobile home and placed on a foundation (posts or blocks) with fixed pipe, connections with sewer, water, or other utilities: PROVIDED, That a mobile home located on land leased by the owner of the mobile home shall be subject, for tax billing, payment, and collection purposes, only to the personal property provisions of chapter 84.56 RCW and RCW 84.60.040.

(3) The term "preceding calendar year" shall mean the calendar year preceding the year in which the claim for exemption is to be made.

(4) "Department" shall mean the state department of revenue.

(5) "Income" means the adjusted gross income as reported to the Internal Revenue Service by all persons living in the residence for taxes on income earned in the year prior to application for exemption.

(6) The term "state equalized value" shall mean that term as used in chapter 84.52 RCW.

NEW SECTION. Sec. 4. A renter claiming the exemption under sections 1 and 2 of this act must satisfy the following conditions:

(1) The property is used exclusively as a residence; and

(2) The property would be exempt from tax if owned by the person claiming the exemption.

NEW SECTION. Sec. 5. RCW 84.36.385, 84.36.387, and 84.36.389 apply to the implementation, administration, and enforcement of sections 1 through 3 of this act to the extent that they do not conflict with the purposes of sections 1 through 3 of this act.

NEW SECTION. Sec. 6. Sections 1 through 5 of this act are each added to chapter 84.36 RCW.