BILL REQ. #:  H-0038.1 

Read first time 01/17/2003.   Referred to Committee on Finance.

     AN ACT Relating to property tax relief for senior citizens and persons retired because of physical disability; amending RCW 84.36.381; and creating a new section.

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

Sec. 1   RCW 84.36.381 and 1998 c 333 s 1 are each amended to read as follows:
     A person shall be exempt from any legal obligation to pay all or a portion of the amount of excess and regular real property taxes due and payable in the year following the year in which a claim is filed, and thereafter, 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 the time of filing: PROVIDED, That any person who sells, transfers, or is displaced from his or her residence may transfer his or her exemption status to a 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:
     (a) The residence is temporarily unoccupied;
     (b) The residence is occupied by a spouse and/or a person financially dependent on the claimant for support; or
     (c) The residence is rented for the purpose of paying nursing home or hospital costs;
     (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;
     (3) The person claiming the exemption must be sixty-one years of age or older on December 31st of the year in which the exemption claim is filed, or must have been, at the time of filing, retired from regular gainful employment by reason of physical disability: PROVIDED, That any surviving spouse of a person who was receiving an exemption at the time of the person's death shall qualify if the surviving spouse is fifty-seven years of age or older and otherwise meets the requirements of this section;
     (4) The amount that the person shall be exempt from an obligation to pay shall be calculated on the basis of combined disposable income, as defined in RCW 84.36.383. If the person claiming the exemption was retired for two months or more of the assessment year, the combined disposable income of such person shall be calculated by multiplying the average monthly combined disposable income of such person during the months such person was retired by twelve. If the income of the person claiming exemption is reduced for two or more months of the assessment year by reason of the death of the person's spouse, or when other substantial changes occur in disposable income that are likely to continue for an indefinite period of time, the combined disposable income of such person shall be calculated by multiplying the average monthly combined disposable income of such person after such occurrences by twelve. If it is necessary to estimate income to comply with this subsection, the assessor may require confirming documentation of such income prior to May 31 of the year following application;
     (5)(a) A person who otherwise qualifies under this section and has a combined disposable income of thirty-four thousand dollars or less shall be exempt from all excess property taxes; and
     (b)(i) A person who otherwise qualifies under this section and has a combined disposable income of ((twenty-four)) twenty-seven thousand dollars or less but greater than ((eighteen)) twenty thousand dollars shall be exempt from all regular property taxes on the greater of forty-six thousand dollars or thirty-five percent of the valuation of his or her residence, but not to exceed ((sixty)) seventy thousand dollars of the valuation of his or her residence; or
     (ii) A person who otherwise qualifies under this section and has a combined disposable income of ((eighteen)) twenty thousand dollars or less shall be exempt from all regular property taxes on the greater of fifty-seven thousand dollars or sixty percent of the valuation of his or her residence; ((and))
     (6)(a) For a person who otherwise qualifies under this section and has a combined disposable income of thirty-four thousand dollars or less, the valuation of the residence shall be the assessed value of the residence on the later of January 1, 1995, or January 1st of the assessment year the person first qualifies under this section. If the person subsequently fails to qualify under this section only for one year because of high income, this same valuation shall be used upon requalification. If the person fails to qualify for more than one year in succession because of high income or fails to qualify for any other reason, the valuation upon requalification shall be the assessed value on January 1st of the assessment year in which the person requalifies. If the person transfers the exemption under this section to a different residence, the valuation of the different residence shall be the assessed value of the different residence on January 1st of the assessment year in which the person transfers the exemption.
     (b) In no event may the valuation under this subsection be greater than the true and fair value of the residence on January 1st of the assessment year.
     (c) This subsection does not apply to subsequent improvements to the property in the year in which the improvements are made. Subsequent improvements to the property shall be added to the value otherwise determined under this subsection at their true and fair value in the year in which they are made; and
     (7) Annually, the department of revenue shall adjust each combined disposable income amount and each valuation amount in this section to reflect inflation. The department may round the adjusted amounts to the nearest thousand dollars. The adjusted amounts apply for taxes due the following year. For the purposes of this section, "inflation" means the change in the consumer price index for all urban consumers for the United States, all items, as compiled by the bureau of labor statistics of the United States department of labor.

NEW SECTION.  Sec. 2   Section 1 of this act applies to taxes levied for collection in 2004 and thereafter, except section 1(7) of this act applies to taxes levied for collection in 2005 and thereafter.