WSR 18-23-068
PROPOSED RULES
DEPARTMENT OF REVENUE
[Filed November 16, 2018, 1:03 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 18-07-072.
Title of Rule and Other Identifying Information: WAC 458-19-090 Fire protection district formation—Cities and towns—Highest lawful levy, this new rule was written because of legislation passed in 2017, ESSB 5628, which allows a city or town to form a fire protection district under certain conditions.
Hearing Location(s): On January 2, 2019, at 1:00 p.m., at Conference Room 114A, 6400 Linderson Way S.W., Tumwater, WA 98501. Copies of draft rules are available for viewing and printing on our web site at dor.wa.gov. Call-in option can be provided upon request no later than three days before the hearing date.
Date of Intended Adoption: January 9, 2019.
Submit Written Comments to: Leslie Mullin, P.O. Box 47453, Olympia, WA 98504-7453, email LeslieMu@dor.wa.gov, fax 360-534-1606, by January 2, 2019.
Assistance for Persons with Disabilities: Contact Julie King or Renee Cosare, phone 360-704-5733 or 360-704-5734, TTY 800-833-6384.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This new rule provides a comprehensive example to cities and towns on how to calculate their highest lawful levy, if the city or town forms a fire protection district under RCW
52.02.160.
Reasons Supporting Proposal: Providing an example of how to calculate the highest lawful levy for cities or towns that establish a fire protection district under RCW
52.02.160 will assist the county assessor's office in its levy calculations and assist the affected taxing districts with budgeting.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of revenue, governmental.
Name of Agency Personnel Responsible for Drafting: Leslie Mullin, 6400 Linderson Way S.W., Tumwater, WA, 360-534-1589; Implementation and Enforcement: Randy Simmons, 6400 Linderson Way S.W., Tumwater, WA, 360-534-1605.
A school district fiscal impact statement is not required under RCW
28A.305.135.
A cost-benefit analysis is not required under RCW
34.05.328. This rule is not a significant legislative rule as defined by RCW
34.05.328.
The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. The proposed language for this new rule clarifies the calculation of the highest lawful levy already described in RCW
52.02.160 and
84.55.092. This proposed new rule does not impose more-than-minor costs on businesses, as it does not propose any new requirements not already provided for in statute.
November 16, 2018
Erin T. Lopez
Rules Coordinator
NEW SECTION
WAC 458-19-090Fire protection district formation—Cities and towns—Highest lawful levy.
(1)
Introduction. RCW
52.02.160 allows a city or town to establish a fire protection district, subject to voter approval, within the same corporate boundaries of the city or town, for the provision of fire prevention services, fire suppression services, emergency medical services, and for the protection of life and property within the city or town. This rule explains how to calculate the highest amount of regular property taxes that can be lawfully levied (highest lawful levy) by a city or town that creates this type of fire protection district.
(2) Definitions. The definitions found in WAC 458-19-005 apply to this rule.
(3) Example. This rule includes an example that identifies a number of facts and then states a conclusion. This example should only be used as a general guide. The tax results of other situations must be determined after a review of all the facts and circumstances.
(4) Highest lawful levy limit calculation.
(a)
First year. A city or town that establishes a fire protection district under RCW
52.02.160 must reduce its highest lawful levy by the total amount initially levied in the first year by the newly established fire protection district. This reduced amount will become the new highest lawful levy for the city or town, and will be used for subsequent levy limit calculations under chapter
84.55 RCW. This reduction in the highest lawful levy for the city or town must occur in the first year the newly established fire protection district imposes its property tax levy.
(b)
Second and subsequent years. The city or town must further reduce its highest lawful levy in subsequent years if the fire protection district initially imposes any additional regular property tax levies as allowed under RCW
52.16.140 and
52.16.160 in those subsequent years.
(c)
Maximum rate. The maximum statutory dollar rate for fire protection districts is one dollar and fifty cents per one thousand dollars of assessed value. This rate consists of three regular property tax levies as follows: RCW
52.16.130 (up to $0.50),
52.16.140 (up to $0.50), and
52.16.160 (up to $0.50).
Example. City A establishes a fire protection district under RCW
52.02.160. Prior to the formation, City A annually levied an amount of $200,390, which is equal to its highest lawful levy. In this example, the maximum statutory dollar rate of the city is $3.375 per $1,000 of assessed value.
First year levy. In its first year, the newly established fire protection district determines it will need to levy $57,000 and its total assessed value is $59,375,000 (the same total assessed value as City A). This levy amount is the equivalent to a levy rate for the fire protection district of $0.96 per $1,000 of assessed value ($57,000/$59,375,000(1,000)), thus the district is initially imposing regular property tax levies under RCW
52.16.130 ($0.50) and
52.16.140 ($0.46) in the first year. Therefore, City A must reduce its highest lawful levy by $57,000. City A's reduced highest lawful levy amount is the amount it will use when calculating the following year's levy calculations.
Second year levy. One year later, the fire protection district requests an increased levy amount of $74,000 and its total assessed value, along with the total assessed value of City A, has increased to $60,655,738. The increased levy amount is the equivalent to a levy rate for the fire protection district of $1.22 per $1,000 of assessed value ($74,000/$60,655,738(1,000)), thus the district is imposing regular levies under RCW
52.16.130,
52.16.140, and is initially imposing the third regular levy under RCW
52.16.160 ($0.22). Therefore, City A must further reduce its highest lawful levy by the amount resulting from the fire district initially imposing the third regular levy under RCW
52.16.160. The additional amount resulting from the initial imposition of the fire protection district's third regular levy under RCW
52.16.160 is $13,344 ($0.22 per $1,000 of assessed value multiplied by the total assessed value of $60,655,738). City A must make a reduction of $13,344 to its highest lawful levy. City A's newly reduced highest lawful levy is the amount it will use when calculating the following year's levy calculations.
Subsequent year levies. In subsequent years, if the fire protection district's levy rate increases beyond $1.22 per $1,000 of assessed value, City A is not required to further reduce its highest lawful levy because the fire protection district had already initially imposed all three regular levies under RCW
52.16.130,
52.16.140, and
52.16.160.
(5)
Constitutional one percent limit and five dollars and ninety cents aggregate dollar limit. Fire protection district levies are subject to the constitutional one percent limit for regular property taxes and the statutory aggregate dollar rate limit of five dollars and ninety cents per thousand dollars of assessed value. If a reduction in a fire protection district levy is required because it exceeds these limits, it is reduced in the manner described in RCW
84.52.010,
84.52.043, and
84.52.125.