S-0598.9

SENATE BILL 5618

BySenators Kuderer, Wellman, Frame, Hunt, Liias, Lovelett, Nguyen, and Robinson

AN ACT Relating to increasing the local property tax revenue growth limit; amending RCW 84.55.005, 84.55.0101, and 84.55.100; creating new sections; and providing a contingent effective date.

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

The legislature, therefore, aims to rectify this situation by increasing the property tax levy limit to more accurately reflect the economic realities of our communities. This act will equip local governments and counties with the necessary tools to keep pace with the rising cost of living.

Furthermore, an increase in levy capacity would provide local governments and counties with greater flexibility to manage their financial resources and meet the needs of their citizens. This increased flexibility will allow them to fund essential services and infrastructure that promote public safety, access to transportation and education, and other services that are vital to the welfare of the citizens of the state.

Many vital fields, such as law enforcement, health care, and education, are facing challenges in recruiting and retaining essential personnel due to the high cost of living in the communities they serve. By empowering local governments to raise the funds needed to support their communities through the balanced approach outlined in this act, the legislature can help them address local needs with minimal impact on taxpayers and retain the essential personnel who serve their communities.

This act represents a clear demonstration of the legislature's commitment to ensuring that all residents have access to essential services they need to thrive, work, and live in the communities they call home.

Sec. 2. RCW 84.55.005 and 2014 c 97 s 316 are each amended to read as follows:

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Inflation" means the ((percentage change in the implicit price deflator for personal consumption expenditures for the United States as published for the most recent twelve-month period by the bureau of economic analysis of the federal department of commerce by September 25th of the year before the taxes are payable;))annual percentage increase in the consumer price index for all urban consumers in the western region for all items as provided in the most recent 12-month period by the bureau of labor statistics of the United States department of labor by July 25th of the year before the taxes are payable.

(2) "Limit factor" means:

(a) For taxing districts with a population of less than ((ten thousand))10,000 in the calendar year prior to the assessment year, ((one hundred one))103 percent;

(b) For taxing districts for which a limit factor is authorized under RCW 84.55.0101, the lesser of the limit factor authorized under that section or ((one hundred one))103 percent;

(c) ((For))Except as provided in (d) of this subsection, for all other districts, the lesser of ((one hundred one))103 percent or ((one hundred))100 percent plus population change and inflation; and

(3)(a) "Population change" means the annual percent increase in the population of a taxing district between the two most recent years as provided in the official population estimates published by the office of financial management for April 1st of the year before taxes are payable. If the office of financial management estimates a net decrease in a taxing district's population, for the purposes of this section, the population change is zero. For a county, the "population of a taxing district" means the population within the county's incorporated and unincorporated areas, unless the county taxing district boundaries are limited to the unincorporated county areas, in which case the "population of a taxing district" means the population of the unincorporated county areas only. For taxing districts that are not coterminous with one or more cities, towns, counties, or unincorporated county areas, or any combination thereof, as provided in the official population estimates published by the office of financial management in April of the year before the taxes are payable, "population change" means:

(4) "Regular property taxes" has the meaning given it in RCW 84.04.140.

Sec. 3. RCW 84.55.0101 and 2007 sp.s. c 1 s 2 are each amended to read as follows:

Upon a finding of substantial need, the legislative authority of a taxing district other than the state may provide for the use of a limit factor under this chapter of ((one hundred one))103 percent or less. In districts with legislative authorities of four members or less, two-thirds of the members must approve an ordinance or resolution under this section. In districts with more than four members, a majority plus one vote must approve an ordinance or resolution under this section. The new limit factor ((shall be))is effective for taxes collected in the following year only.

Sec. 4. RCW 84.55.100 and 1983 c 223 s 1 are each amended to read as follows:

(1) The property tax limitation contained in this chapter shall be determined by the county assessors of the respective counties in accordance with the provisions of this chapter: PROVIDED, That the limitation for any state levy shall be determined by the department of revenue and the limitation for any intercounty rural library district shall be determined by the library district in consultation with the respective county assessors.

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