HOUSE BILL REPORT
HB 969
BYRepresentatives Ebersole, Schoon, Nutley and Moyer
Authorizing a limited property tax exemption for rehabilitated residential rental property.
House Committe on Housing
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. (7)
Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Barnes, Ebersole, Sanders, Todd and J. Williams.
House Staff:Kenny Pittman (786-7392)
AS REPORTED BY COMMITTEE ON HOUSING MARCH 3, 1987
BACKGROUND:
Local governments have explored a variety of techniques to preserve and expand their housing stock. The technique of providing local government incentives can lower the cost of new housing and the rehabilitation of existing rental units. The affect of lower costs is that low and moderate income tenants are provided the ability to compete for sound private market housing.
The Department of Revenue has the responsibility of administering the property tax exempt provisions for the state. Property tax exemptions provided by the state are based on criteria such as public property, property used for religious purposes, property owned by non-profit organizations or residences occupied by qualified elderly residents.
SUMMARY:
SUBSTITUTE BILL: This measure grants counties and cities the option of exempting rehabilitated rental residential property improvements from taxation for ten years. The local governing body, where the property is located, must adopt the policy of providing limited exemptions. If 51 percent of the taxing districts in which the property is located agrees to the policy of limited exemptions, then the limited exemption applies to the tax levy of all taxing districts.
Rehabilitated residential property must be non owner-occupied single or multifamily residential units, must fail to comply with one or more standards of state or local housing or building codes, must not be less than 25 years of age, must provide at least 50 percent of their accommodations for residential and not transient occupancy and where property improvements made must equal or exceed 5 percent of the true cash value of the land and improvements, based on the last equalized assessment roll proceeding application for limited exemption.
The Department of Revenue is responsible for the development of the necessary rules and procedures for the implementation of the ten year limited taxation on rehabilitated rental residential property improvements.
The local governing body shall rule on an owner's application for exemption in 90 days. Upon completion of the improvements, the owner is to file a statement including rehabilitation expenditures and why the property should qualify for the exemption. The local governing body is also provided provisions for termination of the exemption for non-compliance by the owner.
SUBSTITUTE BILL COMPARED TO ORIGINAL: The Department of Revenue is responsible for the development of the necessary rules and procedures for the implementation of the ten year limited taxation on rehabilitated rental residential property improvements.
Fiscal Note: Requested March 3, 1987.
House Committee ‑ Testified For: Doug Sutherland, Mayor, City of Tacoma; Lonnie Wheeler, Chair, Tacoma Planning Commission; Sterns Wood, Tacoma Planning Department; Carroll Duval, Apartment Operators Association of Seattle and King County; Glenwood Buxton, Apartment Operators Association of Seattle and King County; Dick Barrett, Spokane Apartment Owners Association; and Randy Lewis.
House Committee - Testified Against: Joan Paulson, Planner, Denny Regrade Community Council; Joe Read, Denny Regrade Community Council; and Fred Saeger, Washington Association of County Officials.
House Committee - Testimony For: There are few incentives that a local government can offer a developer to encourage the rehabilitation of residential property. The provision of standard housing is needed to address the housing needs of all residents.
House Committee - Testimony Against: The incentives may encourage the conversion of existing housing into housing for middle and upper income people. There should be provisions that require owners requesting the limited exemption to provide housing for all income levels. The limited tax exemption provisions of the bill have possible state constitutional problems.