BILL REQ. #:  H-1271.2 

Read first time 02/06/2007.   Referred to Committee on Local Government.

     AN ACT Relating to the timing of accrual of property tax revenues; and amending RCW 35.13.270, 35A.14.801, and 84.09.030.

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

Sec. 1   RCW 35.13.270 and 2001 c 299 s 2 are each amended to read as follows:
     (1) Whenever any territory is annexed to a city or town which is part of a road district of the county and road district taxes have been levied but not collected on any property within the annexed territory, the same shall when collected by the county treasurer be paid to the city or town and by the city or town placed in the city or town street fund; except that road district taxes that are delinquent before the date of annexation shall be paid to the county and placed in the county road fund. ((This section shall))
     (2) When territory that is part of a fire district is annexed to a city or town, the following apply:
     (a) Fire district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing city or town at times required by the county, but no less frequently than by June 30th and December 30th following the annexation; and
     (b) Fire district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation shall, when collected, be paid to the fire district.
     (3) When territory that is part of a library district is annexed to a city or town, the following apply:
     (a) Library district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing city or town at times required by the county, but no less frequently than by June 30th and December 30th following the annexation; and
     (b) Library district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation shall, when collected, be paid to the library district.
     (4) Subsections (1) through (3) of this section do not apply to any special assessments due in behalf of such property.
     (5) If a city or town annexes property within a fire district or library district while a nonvoter-approved general obligation bond secured by the taxing authority of the district is outstanding, the bonded indebtedness of the fire district or library district remains an obligation of the taxable property annexed as if the annexation had not occurred.
     (6) The city or town is required to provide notification, by certified mail, that includes a list of annexed parcel numbers, to the county treasurer and assessor, and to the fire district and library district, as appropriate, at least thirty days before the effective date of the annexation. The county treasurer is only required to remit to the city or town those road taxes, fire district taxes, and library district taxes collected thirty days or more after receipt of the notification.
     (7)(a) In counties that do not have a boundary review board, the city or town shall provide notification to the fire district or library district of the jurisdiction's resolution approving the annexation. The notification required under this subsection must:
     (i) Be made by certified mail within seven days of the resolution approving the annexation; and
     (ii) Include a description of the annexed area.
     (b) In counties that have a boundary review board, the city or town shall provide notification of the proposed annexation to the fire district or library district simultaneously when notice of the proposed annexation is provided by the jurisdiction to the boundary review board under RCW 36.93.090.
     (8) The provisions of this section regarding (a) the transfer of fire and library district property taxes and (b) city and town notifications to fire and library districts do not apply if the city or town has been annexed to and is within the fire or library district when the city or town approves a resolution to annex unincorporated county territory.

Sec. 2   RCW 35A.14.801 and 2001 c 299 s 3 are each amended to read as follows:
     (1) Whenever any territory is annexed to a code city which is part of a road district of the county and road district taxes have been levied but not collected on any property within the annexed territory, the same shall when collected by the county treasurer be paid to the code city and by the city placed in the city street fund; except that road district taxes that are delinquent before the date of annexation shall be paid to the county and placed in the county road fund. ((This section shall))
     (2) When territory that is part of a fire district is annexed to a code city, the following apply:
     (a) Fire district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing code city at times required by the county, but no less frequently than by June 30th and December 30th following the annexation; and
     (b) Fire district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation shall, when collected, be paid to the fire district.
     (3) When territory that is part of a library district is annexed to a code city, the following apply:
     (a) Library district taxes on annexed property that were levied, but not collected, and were not delinquent at the time of the annexation shall, when collected, be paid to the annexing code city at times required by the county, but no less frequently than by June 30th and December 30th following the annexation; and
     (b) Library district taxes on annexed property that were levied, but not collected, and were delinquent at the time of the annexation shall, when collected, be paid to the library district.
     (4) Subsections (1) through (3) of this section do not apply to any special assessments due in behalf of such property.
     (5) If a code city annexes property within a fire district or library district while a nonvoter-approved general obligation bond secured by the taxing authority of the district is outstanding, the bonded indebtedness of the fire district or library district remains an obligation of the taxable property annexed as if the annexation had not occurred.
     (6) The code city is required to provide notification, by certified mail, that includes a list of annexed parcel numbers, to the county treasurer and assessor, and to the fire district and library district, as appropriate, at least thirty days before the effective date of the annexation. The county treasurer is only required to remit to the code city those road taxes, fire district taxes, and library district taxes collected thirty or more days after receipt of the notification.
     (7)(a) In counties that do not have a boundary review board, the code city shall provide notification to the fire district or library district of the jurisdiction's resolution approving the annexation. The notification required under this subsection must:
     (i) Be made by certified mail within seven days of the resolution approving the annexation; and
     (ii) Include a description of the annexed area.
     (b) In counties that have a boundary review board, the code city shall provide notification of the proposed annexation to the fire district or library district simultaneously when notice of the proposed annexation is provided by the jurisdiction to the boundary review board under RCW 36.93.090.
     (8) The provisions of this section regarding (a) the transfer of fire and library district property taxes and (b) code city notifications to fire and library districts do not apply if the code city has been annexed to and is within the fire or library district when the code city approves a resolution to annex unincorporated county territory.

Sec. 3   RCW 84.09.030 and 2004 c 129 s 19 are each amended to read as follows:
     Except as follows, the boundaries of counties, cities, and all other taxing districts, for purposes of property taxation and the levy of property taxes, shall be the established official boundaries of such districts existing on the first day of ((March)) August of the year in which the property tax levy is made.
     The official boundaries of a newly incorporated taxing district shall be established at a different date in the year in which the incorporation occurred as follows:
     (1) Boundaries for a newly incorporated city shall be established on the last day of March of the year in which the initial property tax levy is made, and the boundaries of a road district, library district, or fire protection district or districts, that include any portion of the area that was incorporated within its boundaries shall be altered as of this date to exclude this area, if the budget for the newly incorporated city is filed pursuant to RCW 84.52.020 and the levy request of the newly incorporated city is made pursuant to RCW 84.52.070. Whenever a proposed city incorporation is on the March special election ballot, the county auditor shall submit the legal description of the proposed city to the department of revenue on or before the first day of March;
     (2) Boundaries for a newly incorporated port district or regional fire protection service authority shall be established on the first day of October if the boundaries of the newly incorporated port district or regional fire protection service authority are coterminous with the boundaries of another taxing district or districts, as they existed on the first day of March of that year;
     (3) Boundaries of any other newly incorporated taxing district shall be established on the first day of June of the year in which the property tax levy is made if the taxing district has boundaries coterminous with the boundaries of another taxing district, as they existed on the first day of March of that year;
     (4) Boundaries for a newly incorporated water-sewer district shall be established on the fifteenth of June of the year in which the proposition under RCW 57.04.050 authorizing a water district excess levy is approved.
     The boundaries of a taxing district shall be established on the first day of June if territory has been added to, or removed from, the taxing district after the first day of March of that year with boundaries coterminous with the boundaries of another taxing district as they existed on the first day of March of that year. However, the boundaries of a road district, library district, or fire protection district or districts, that include any portion of the area that was annexed to a city or town within its boundaries shall be altered as of this date to exclude this area. In any case where any instrument setting forth the official boundaries of any newly established taxing district, or setting forth any change in such boundaries, is required by law to be filed in the office of the county auditor or other county official, said instrument shall be filed in triplicate. The officer with whom such instrument is filed shall transmit two copies to the county assessor.
     No property tax levy shall be made for any taxing district whose boundaries are not established as of the dates provided in this section.