SSB 5186

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 11, 2015

Title: An act relating to property tax exemptions for service-connected disabled veterans and senior citizens.

Brief Description: Concerning property tax exemptions for service-connected disabled veterans and senior citizens.

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Benton, Hasegawa, Sheldon and Keiser).

Brief History:

Committee Activity: Ways & Means: 2/25/15, 2/27/15 [DPS].

Passed Senate: 3/11/15, 49-0.


Majority Report: That Substitute Senate Bill No. 5186 be substituted therefor, and the substitute bill do pass.

Signed by Senators Hill, Chair; Braun, Vice Chair; Dammeier, Vice Chair; Honeyford, Vice Chair, Capital Budget Chair; Hargrove, Ranking Member; Keiser, Assistant Ranking Member on the Capital Budget; Ranker, Ranking Minority Member, Operating; Bailey, Becker, Billig, Brown, Conway, Fraser, Hasegawa, Hatfield, Hewitt, Kohl-Welles, O'Ban, Padden, Parlette, Rolfes, Schoesler and Warnick.

Staff: Juliana Roe (786-7438)

Background: All real and personal property is subject to property tax each year based on its value, unless a specific exemption is provided by law. Some senior citizens and persons retired due to disability are entitled to a property tax exemption for their principal residences. To qualify a person must be age 61 in the year of application; retired from employment because of a disability or 100 percent disabled due to military service; own the person's principal residence; and have a disposable income of less than $35,000 per year. Persons meeting this criteria are entitled to partial property tax exemptions and a property valuation freeze.

Disposable income is defined as adjusted gross income, plus: capital gains; pension and annuity receipts; military pay and benefits other than attendant-care and medical-aid payments; veterans' benefits, other than attendant-care and medical-aid payments, disability compensation, and dependency and indemnity compensation; federal Social Security Act and railroad retirement benefits; dividend receipts; and interest received on state and municipal bonds, less amounts deducted for loss and depreciation.

Combined disposable income is defined as the disposable income of the person claiming the exemption, plus the disposable income of the person's spouse or domestic partner, and the disposable income of each cotenant occupying the residence, less amounts paid by the person claiming the exemption or the person's spouse or domestic partner during the assessment year for the following:

Summary of Substitute Bill: The combined disposable incomes, for senior citizens and persons retired due to disability, used to determine their qualifications for a property tax exemption are increased by $5,000. They must have as follows:

The combined disposable income for a person entitled to defer property taxes is increased by $5,000. The person's combined disposable income must be $45,000 or less, and the person must be at least 60 years old or retired from regular employment because of physical disability.

The increases are exempt from the ten-year tax preference expiration date.

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 on Proposed Substitute as Heard in Committee: PRO: There are seniors and disabled persons who do not qualify for the property tax exemption or deferral because their modest fixed incomes still exceed current limits. These retirees spend a significant amount of their income on expensive medical equipment and health insurance premiums, which are not discretionary expenses. This bill would allow these people to reduce their combined disposable income by subtracting these additional health expenditures from their disposable income.

CON: The assessors are concerned with this bill because it causes a significant tax shift in the counties.

Persons Testifying: PRO: Senator Benton, prime sponsor; Jerry Reilly, Eldercare Alliance.

CON: Monty Cobb, WA Assn. of County Officials.

Persons Signed in to Testify But Not Testifying: No one.