SENATE BILL REPORT

ESB 5169

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Passed Senate, March 7, 2011

Title: An act relating to encouraging economic development by exempting certain counties from the forest land compensating tax.

Brief Description: Encouraging economic development by exempting certain counties from the forest land compensating tax.

Sponsors: Senators Rockefeller, Kilmer and Shin.

Brief History:

Committee Activity: Economic Development, Trade & Innovation: 2/07/11, 2/10/11 [DP].

Ways & Means: 2/23/11, 2/24/11 [DP, w/oRec].

Passed Senate: 3/07/11, 48-0.

SENATE COMMITTEE ON ECONOMIC DEVELOPMENT, TRADE & INNOVATION

Majority Report: Do pass.

Signed by Senators Kastama, Chair; Chase, Vice Chair; Baumgartner, Ranking Minority Member; Hatfield, Holmquist Newbry, Kilmer and Shin.

Staff: Jack Brummel (786-7428)

SENATE COMMITTEE ON WAYS & MEANS

Majority Report: Do pass.

Signed by Senators Murray, Chair; Kilmer, Vice Chair, Capital Budget Chair; Zarelli, Ranking Minority Member; Parlette, Ranking Minority Member Capital; Baumgartner, Baxter, Brown, Conway, Fraser, Hatfield, Hewitt, Holmquist Newbry, Honeyford, Kastama, Keiser, Kohl-Welles, Pridemore, Regala, Rockefeller, Schoesler and Tom.

Minority Report: That it be referred without recommendation.

Signed by Senator Pflug.

Staff: Dianne Criswell (786-7433)

Background: Most property is valued or assessed at its true and fair, or highest and best, value for purposes of imposing property taxes. The state Constitution, however, allows the Legislature to enact legislation assessing certain types of real property at its present or current use for purposes of imposing property taxes. Two programs of current use valuation have been established: one program for designated forest lands (DFL); and a second program that includes open space lands, farm and agricultural lands, and timber lands.

The DFL classification is for parcels of 20 or more acres devoted to commercial growing and harvesting of timber. If the property is removed from the classification, a compensating tax is imposed. The amount of compensating tax is the difference between the amount of tax last levied on the land as DFL and an amount equal to the new assessed value of the land for the last nine years. The compensating tax is not imposed under the following:

Summary of Engrossed Bill: The exception for payment of compensating tax for counties with a population greater than 600,000 is modified to include counties with a population of at least 245,000 bordering Puget Sound [Kitsap and Thurston Counties].

Appropriation: None.

Fiscal Note: Available.

Committee/Commission/Task Force Created: No.

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

Staff Summary of Public Testimony (Economic Development, Trade & Innovation): PRO: This affects Kitsap County, the only one of the four Puget Sound Regional Council counties not currently exempt. Kitsap County is the second densest county in the state. This will allow preservation and the building of ecotourism.

Persons Testifying (Economic Development, Trade & Innovation): PRO: Senator Rockefeller, prime sponsor; Steve Bauer, Kitsap County Commissioner.

Staff Summary of Public Testimony (Ways & Means): PRO: This bill provides Kitsap County, a high density population county, with the same treatment as other counties in the Puget Sound. There should be no impact to the state. This would be an economic development tool for ecotourism. It would create jobs in Kitsap County. Further, it would preserve property for open space, providing trails for the public and protection of wildlife habitat.

Persons Testifying (Ways & Means): PRO: Senator Rockefeller, prime sponsor; Tom McBride, Kitsap County.