SENATE BILL REPORT

EHB 1510

As Reported By Senate Committee On:

Government Operations & Elections, February 18, 2004

Title: An act relating to fire protection district property tax levies.

Brief Description: Modifying the prorationing of fire protection district property tax levies.

Sponsors: Representatives Haigh, Eickmeyer, Morris and Simpson.

Brief History:

Committee Activity: Government Operations & Elections: 4/2/03; 2/18/04 [DP-WM, DNP].

SENATE COMMITTEE ON GOVERNMENT OPERATIONS & ELECTIONS

Majority Report: Do pass and be referred to Committee on Ways & Means.

      Signed by Senators Roach, Chair; Stevens, Vice Chair; Berkey and Kastama.

Minority Report: Do not pass.

      Signed by Senator Horn.

Staff: Mac Nicholson (786-7445)

Background: The state Constitution limits regular property tax levies to a maximum of 1 percent of the property's value ($10 per $1,000 of market value). Voters within a taxing district can vote to tax themselves higher than the one percent limit with an excess levy.

The Legislature has established individual district rate maximums and aggregate rate maximums to keep the total tax rate for regular property taxes within the constitutional limit. The state levy rate is limited to $3.60 per $1,000 of assessed value. The levies of the remaining taxing districts are limited to a total of $5.90 per $1,000 of assessed value. Taxing districts are generally divided into two types, senior districts (cities and counties) and junior districts (library districts, fire districts, park districts, etc.). If the combined rates of the senior and junior taxing districts exceeds $5.90, the rates of the taxing districts are reduced according to statutorily set priorities until the combined rate fits within the $5.90 limit. This process is referred to as prorationing, and junior taxing district levies are reduced before senior district levies.

Outside the $5.90 limit, but still subject to the one percent constitutional limit, are: (1) voter-approved emergency medical service (EMS) taxes; (2) taxes to acquire conservation futures; (3) voter-approved taxes for affordable housing; and (4) voter-approved metropolitan park district levies.

Fire protection districts are authorized to impose three different levies of 50 cents per $1,000 of assessed value for a total of $1.50 per $1,000.

Summary of Bill: A fire protection district can impose up to a total of 25 cents of its property tax levy outside the $5.90 aggregate property tax rate limit, if those taxes otherwise would be subject to prorationing.

Appropriation: None.

Fiscal Note: Available.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Testimony For: This bill ensures public safety by allowing fire districts to collect the money they are authorized to collect. Property taxes are the only revenue source for fire districts so they can't afford to lose money through prorationing.

Testimony Against: None.

Testified: PRO: Representative Haigh, prime sponsor; Ryan Spiller, WA Fire Commissioners.