HOUSE BILL REPORT

HB 1185

BYRepresentative Appelwick

Specifying the order for the deduction of levy rates of junior taxing districts to meet limitations imposed by law.

House Committe on Ways & Means/Revenue

Majority Report:  Do pass.  (10)

      Signed by Representatives Appelwick, Chair; Basich, Grimm, Holland, Madsen, Rust, Schoon, Taylor, Valle and Winsley.

House Staff:Rick Wickman (786-7150)

AS PASSED HOUSE MARCH 19, 1987

BACKGROUND:

The constitution and statutes place several restrictions on property taxes.

Statutes establish the maximum tax rate that each taxing district may impose.  These rate limitations are expressed in terms of a dollar value per $1,000 of assessed valuation, except that the state's rate is a dollar value per $1,000 of assessed valuation adjusted to an equalized value.

Statutes place a cumulative rate limitation on most of the regular property tax levies of most taxing districts at $9.15 per $1,000 of assessed valuation that may be imposed on any property.  The relative status of the various taxing districts has been established so that the senior taxing districts (counties, road districts, cities and towns, and the state for educational purposes) are permitted to impose their tax levies before the remaining taxing districts (referred to as junior taxing districts) impose their tax levies.  Different status levels have been established for the regular property tax levies of various junior taxing districts.  If the requested rates of tax levy exceed this $9.15 limit on any property, levy rates of the junior status tax levies and junior taxing districts are reduced or eliminated to remain within this cumulative ceiling rate.  The reduction or elimination occurs on the lowest status levies and districts before the next highest are affected.

SUMMARY:

The relative status of tax levies and taxing districts is clarified and altered for junior taxing districts as follows from least seniority to most seniority: (1) park and recreation districts, park and recreation service areas, and cultural arts district, are the lowest; (2) flood control zone districts are the next lowest; (3) all other junior taxing districts (except fire districts, hospital districts, library districts, and metro park districts) are the next lowest; (4) the second and third $.50 property tax levies of fire districts are the next lowest; and (5) hospital districts, library districts, metro park districts, and the first $.50 levy of fire districts are the highest.  The status of cemetery districts is therefore lowered from the highest status, to one below the second and third $.50 tax levies of fire districts.

Fiscal Note:      Attached.

House Committee ‑ Testified For:    Stan Finkelstein, Association of Washington Cities; Marilyn Showalter, Public Hospital District; Mark Allen, Washington Library Association; Mike Lynch, North Central Regional Library; and Lon Dickerson, Timberland Regional Library.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    This clarifies how proration occurs.  This gives the bigger districts a little help by removing a small junior taxing district from the highest status of junior taxing districts.

House Committee - Testimony Against:      None Presented.