AN
ACT Relating to the multiple-unit dwellings property tax exemption; and
amending RCW 84.14.010, 84.14.020, and 84.14.110.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
84.14.010 and 2000 c 242 s 1 are each amended to read as follows:
Unless
the context clearly requires otherwise, the definitions in this section apply
throughout this chapter.
(1)
"City" means either (a) a city or town with a population of at least
((fifty)) thirty thousand or (b) the largest city or town, if
there is no city or town with a population of at least ((fifty)) thirty
thousand, located in a county planning under the growth management act.
(2)
"Governing authority" means the local legislative authority of a city
having jurisdiction over the property for which an exemption may be applied for
under this chapter.
(3)
"Growth management act" means chapter 36.70A RCW.
(4)
"Multiple-unit housing" means a building having four or more dwelling
units not designed or used as transient accommodations and not including hotels
and motels. Multifamily units may result from new construction or
rehabilitated or conversion of vacant, underutilized, or substandard buildings
to multifamily housing.
(5)
"Owner" means the property owner of record.
(6)
"Permanent residential occupancy" means multiunit housing that
provides either rental or owner occupancy on a nontransient basis. This
includes owner-occupied or rental accommodation that is leased for a period of
at least one month. This excludes hotels and motels that predominately offer
rental accommodation on a daily or weekly basis.
(7)
"Rehabilitation improvements" means modifications to existing
structures, that are vacant for twelve months or longer, that are made to
achieve a condition of substantial compliance with existing building codes or
modification to existing occupied structures which increase the number of
multifamily housing units.
(8)
"Residential targeted area" means an area within an urban center that
has been designated by the governing authority as a residential targeted area
in accordance with this chapter.
(9)
"Substantial compliance" means compliance with local building or
housing code requirements that are typically required for rehabilitation as
opposed to new construction.
(10)
"Urban center" means a compact identifiable district where urban
residents may obtain a variety of products and services. An urban center must
contain:
(a)
Several existing or previous, or both, business establishments that may include
but are not limited to shops, offices, banks, restaurants, governmental
agencies;
(b)
Adequate public facilities including streets, sidewalks, lighting, transit,
domestic water, and sanitary sewer systems; and
(c)
A mixture of uses and activities that may include housing, recreation, and
cultural activities in association with either commercial or office, or both,
use.
Sec.
2. RCW
84.14.020 and 1999 c 132 s 1 are each amended to read as follows:
(1)
The value of new housing construction, conversion, and rehabilitation
improvements qualifying under this chapter is exempt from ad valorem property
taxation, for ten successive years beginning January 1 of the year immediately
following the calendar year of issuance of the certificate of tax exemption
eligibility. However, the exemption does not include the value of land or
nonhousing-related improvements not qualifying under this chapter. When a
local government adopts guidelines pursuant to RCW 84.14.030(2) and the
qualifying dwelling units are each on separate parcels for the purpose of
property taxation, the exemption may, at the local government's discretion, be
limited to those dwelling units that meet the local guidelines.
(2)
In the case of rehabilitation of existing buildings, the exemption does not
include the value of improvements constructed prior to the submission of the
application required under this chapter. The incentive provided by this
chapter is in addition to any other incentives, tax credits, grants, or other
incentives provided by law.
(3)
This chapter does not apply to increases in assessed valuation made by the
assessor on nonqualifying portions of building and value of land nor to
increases made by lawful order of a county board of equalization, the
department of revenue, or a county, to a class of property throughout the
county or specific area of the county to achieve the uniformity of assessment
or appraisal required by law.
(4)
At the conclusion of the ten-year exemption period, the new or rehabilitated
housing cost shall be considered as new construction for the purposes of
chapter 84.55 RCW.
Sec.
3. RCW
84.14.110 and 2001 c 185 s 1 are each amended to read as follows:
(1)
If improvements have been exempted under this chapter, the improvements
continue to be exempted and not be converted to another use for at least ten
years from date of issuance of the certificate of tax exemption. If the owner
intends to convert the multifamily development to another use, the owner shall
notify the assessor within sixty days of the change in use. If, after a
certificate of tax exemption has been filed with the county assessor the city
or assessor or agent discovers that a portion of the property is changed or
will be changed to a use that is other than residential or that housing or
amenities no longer meet the requirements as previously approved or agreed upon
by contract between the governing authority and the owner and that the multifamily
housing, or a portion of the housing, no longer qualifies for the exemption,
the tax exemption must be canceled and the following must occur:
(a)
Additional real property tax must be imposed upon the value of the
nonqualifying improvements in the amount that would normally be imposed, plus a
penalty must be imposed amounting to twenty percent. This additional tax is
calculated based upon the difference between the property tax paid and the
property tax that would have been paid if it had included the value of the
nonqualifying improvements dated back to the date that the improvements were
converted to a nonmultifamily use;
(b)
The tax must include interest upon the amounts of the additional tax at the
same statutory rate charged on delinquent property taxes from the dates on
which the additional tax could have been paid without penalty if the
improvements had been assessed at a value without regard to this chapter; and
(c)
The additional tax owed together with interest and penalty must become a lien
on the land and attach at the time the property or portion of the property is
removed from multifamily use or the amenities no longer meet applicable
requirements, and has priority to and must be fully paid and satisfied before a
recognizance, mortgage, judgment, debt, obligation, or responsibility to or
with which the land may become charged or liable. The lien may be foreclosed
upon expiration of the same period after delinquency and in the same manner
provided by law for foreclosure of liens for delinquent real property taxes.
An additional tax unpaid on its due date is delinquent. From the date of
delinquency until paid, interest must be charged at the same rate applied by
law to delinquent ad valorem property taxes.
(2)
Upon a determination that a tax exemption is to be canceled for a reason stated
in this section, the governing authority shall notify the record owner of the
property as shown by the tax rolls by mail, return receipt requested, of the
determination to cancel the exemption. The owner may appeal the determination
to the governing authority within thirty days by filing a notice of appeal with
the clerk of the governing authority, which notice must specify the factual and
legal basis on which the determination of cancellation is alleged to be
erroneous. The governing authority or a hearing examiner or other official
authorized by the governing authority may hear the appeal. At the hearing, all
affected parties may be heard and all competent evidence received. After the
hearing, the deciding body or officer shall either affirm, modify, or repeal
the decision of cancellation of exemption based on the evidence received. An
aggrieved party may appeal the decision of the deciding body or officer to the
superior court under RCW 34.05.510 through 34.05.598.
(3)
Upon determination by the governing authority or authorized representative to
terminate an exemption, the county officials having possession of the
assessment and tax rolls shall correct the rolls in the manner provided for
omitted property under RCW 84.40.080. The county assessor shall make such a
valuation of the property and improvements as is necessary to permit the
correction of the rolls. The value of the new housing construction,
conversion, and rehabilitation improvements added to the rolls shall be
considered as new construction for the purposes of chapter 84.55 RCW. The
owner may appeal the valuation to the county board of equalization under
chapter 84.48 RCW and according to the provisions of RCW 84.40.038. If there
has been a failure to comply with this chapter, the property must be listed as
an omitted assessment for assessment years beginning January 1 of the calendar
year in which the noncompliance first occurred, but the listing as an omitted
assessment may not be for a period more than three calendar years preceding the
year in which the failure to comply was discovered.
