SENATE BILL 5770
State of Washington
2023 Regular Session
BySenators Pedersen, Van De Wege, Robinson, Dhingra, Nguyen, Wellman, Keiser, Valdez, Saldaña, Hunt, Salomon, Randall, Cleveland, C. Wilson, Stanford, Lovick, Nobles, Hasegawa, Trudeau, and Liias
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature finds that the arbitrary one percent limitation on the growth of property tax collections has severely inhibited the ability of the state, counties, cities, and other special districts to provide critical community services in the face of significant population growth and inflation.
Modifying the limitation on the growth of property tax collections will restore the primary tool state and local officials use to fund public schools, law enforcement, fire departments, and other services Washingtonians rely on.
Property taxes are the primary revenue source for counties, which have responsibility in Washington for public safety and administration of the criminal justice system.
Because the state portion of the property tax is entirely devoted to support of public schools, raising the cap on the state portion of property taxes will help provide the resources in coming years for the legislature to make ample provision for the education of students with disabilities.
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;))the 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 in the calendar year prior to the assessment year, one hundred one 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 percent;
(c) For all other districts, the lesser of one hundred one percent or one hundred percent plus inflation; and))100 percent plus population change and inflation, not to exceed 103 percent.
(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:
(i) The population change for the city or town within which the taxing district is wholly located;
(ii) The population change for the county in which the taxing district is wholly located, when the taxing district is not wholly located within a city or town; or
(iii) For taxing districts located in more than one county, the county population change for the county in which the greatest total taxable assessed value of the taxing district for the prior assessment year is located.
(b) For the purposes of this subsection (3), the annual percent increase in population is calculated to the nearest tenth of one percent, rounding up to the next tenth of one percent if the second decimal place of the annual percent increase is five or greater.
"Regular property taxes" has the meaning given it in RCW 84.04.140
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.
(2) By September 1, 2023, and by September 1st every year thereafter, the department of revenue must provide county assessors the limit factors necessary for the county assessor to comply with subsections (1) and (3) of this section.
(3) By October 1, 2023, and by October 1st every year thereafter, the county assessor must determine the limit factor applicable to each taxing district in their county and notify each taxing district of the determination. However, for a taxing district located in more than one county, the assessor of the county with the most assessed value of the taxing district is subject to the requirements of this subsection (3).
and 2019 c 453 s 1 are each amended to read as follows:
A person is 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)(a) 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. However, 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 may receive an exemption on more than one residence in any year. Moreover, confinement of the person to a hospital, nursing home, assisted living facility, adult family home, or home of a relative for the purpose of long-term care does not disqualify the claim of exemption if:
(i) The residence is temporarily unoccupied;
(ii) The residence is occupied by a spouse or a domestic partner and/or a person financially dependent on the claimant for support; or
(iii) The residence is rented for the purpose of paying nursing home, hospital, assisted living facility, or adult family home costs.
(b) For the purpose of this subsection (1), "relative" means any individual related to the claimant by blood, marriage, or adoption;
(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 state registered domestic partnership or owned by cotenants is deemed to be owned by each spouse or each domestic partner or each cotenant, and any lease for life is deemed a life estate;
(3)(a) The person claiming the exemption must be:
(i) 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 disability; or
(ii) A veteran of the armed forces of the United States entitled to and receiving compensation from the United States department of veterans affairs at:
(A) A combined service-connected evaluation rating of eighty percent or higher; or
(B) A total disability rating for a service-connected disability without regard to evaluation percent.
(b) However, any surviving spouse or surviving domestic partner of a person who was receiving an exemption at the time of the person's death will qualify if the surviving spouse or surviving domestic partner is fifty-seven years of age or older and otherwise meets the requirements of this section;
(4) The amount that the person is exempt from an obligation to pay is 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 must 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 the person's domestic partner, 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 must 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 equal (([to]
or less than income threshold 3 is exempt from all excess property taxes, 25 percent of the state property tax imposed under RCW 84.52.065(1),
the additional state property tax imposed under RCW 84.52.065
(2), and the portion of the regular property taxes authorized pursuant to RCW 84.55.050
and approved by the voters, if the legislative authority of the county or city imposing the additional regular property taxes identified this exemption in the ordinance placing the RCW 84.55.050
measure on the ballot; and
(b)(i) A person who otherwise qualifies under this section and has a combined disposable income equal to or less than income threshold 2 but greater than income threshold 1 is exempt from all regular property taxes on the greater of fifty thousand dollars or thirty-five percent of the valuation of his or her residence, but not to exceed 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 equal to or less than income threshold 1 is exempt from all regular property taxes on the greater of sixty thousand dollars or sixty percent of the valuation of his or her residence;
(6)(a) For a person who otherwise qualifies under this section and has a combined disposable income equal (([to]))to or less than income threshold 3, the valuation of the residence is 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 must 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 is 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 is 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 must be added to the value otherwise determined under this subsection at their true and fair value in the year in which they are made.
NEW SECTION. Sec. 5. RCW 84.55.0101 (Limit factor—Authorization for taxing district to use one hundred one percent or less—Ordinance or resolution) and 2007 sp.s. c 1 s 2 & 1997 c 3 s 204 are each repealed.
NEW SECTION. Sec. 6. This act applies to taxes levied for collection in 2024 and thereafter.
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