HOUSE BILL REPORT

SSB 6639

BYSenate Committee on Ways & Means (originally sponsored by Senators McDonald, McMullen, Bluechel, Niemi, Patrick, Warnke, Metcalf, Vognild, Bailey, Conner, Talmadge, Rinehart, Williams, Murray, Moore and von Reichbauer)

Authorizing a real estate excise tax for the acquisition of conservation areas.

House Committe on Revenue

Majority Report:  Do pass as amended.  (9)

      Signed by Representatives Wang, Chair; Pruitt, Vice Chair; Appelwick, Fraser, Haugen, Morris, Phillips, Rust and H. Sommers.

Minority Report:  Do not pass.  (4)

      Signed by Representatives Holland, Ranking Republican Member; Brumsickle, Fuhrman and Silver.

House Staff:Rick Wickman (786-7150)

AS PASSED HOUSE MARCH 9, 1990

BACKGROUND:

Counties may acquire any interest, development right, easement, or other contractual right for protecting, maintaining, or limiting the future uses of open space lands or farm and agricultural lands.

To accomplish this purpose counties may levy a regular property tax of $.0625 per $1,000 of assessed value.  The tax may be levied without a vote of the people and is outside the $5.55 statutory limitation but within the one percent constitutional limitation on regular levies.

The state imposes a real estate tax at the rate of 1.28 percent.  The seller is liable for this tax.  Counties are authorized to impose a .5 percent real estate excise tax for general purposes in lieu of the second .5 percent local option sales tax.  In addition, counties may impose a .25 percent real estate excise tax for capital funding purposes only.  The .25 percent tax is not subject to referendum.

SUMMARY:

Counties are authorized to impose a real estate excise tax countywide of up to .5 percent to acquire and maintain conservation areas.  The tax is the liability of the sellers.

A proposal to initiate the tax may originate with the county legislative authority through the passage of an ordinance or by petition signed by at least 10 percent of the voters who voted in the last preceding general election.  A proposal to impose the tax must then be approved by the voters of the county before it can be effective.

An expenditure plan must be prepared at lease 60 days prior to an election if the proposition is initiated by the county legislative authority, or within six months if initiated by petition.  The counties must consult with cities regarding the expenditure plan.

Counties are authorized to impose an additional real estate excise tax countywide of up to .5 percent to acquire and maintain conservation areas that are critical habitat, natural areas, or urban wildlife habitat.  This additional tax does not require voter approval.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Available.

House Committee ‑ Testified For:    Tom Cowan, San Juan County; Wally Gudgell, realtor;  Tiffany Yelton, Washington Environmental Council intern; and Bruce Smith.

House Committee - Testified Against:      Jim Salatino, Harold Allen, Christine This, and Dawn Badger, Washington Association of Realtors.

House Committee - Testimony For:    We need this additional real estate excise tax to acquire lands for preservation and protection for future generations before it is sold to private individuals.  Preserving conservation lands makes sense from a public policy standpoint.  Preserving conservation lands fits a growth management strategy.

House Committee - Testimony Against:      This additional real estate excise tax is difficult for first time home buyers.  It is becoming more and more difficult to purchase a home.  We have the highest real estate excise tax in the nation.

VOTE ON FINAL PASSAGE:

      Yeas 50; Nays 45; Excused 2 - 3/09.

Voting Nay: Representatives Basich, Beck, Bennett, Bowman, Brumsickle, Cooper, Crane, Day, Dorn, Doty, Forner, Fuhrman, Grant, Hankins, Hargrove, Heavey, Holland, Horn, Inslee, Jesernig, P. King, Kirby, May, McLean, R. Meyers, Morris, Moyer, H. Myers, Nealey, Nutley, Padden, Peery, Rayburn, Rector, Schmidt, Schoon, Silver, Smith, D. Sommers, Tate, Van Luven, Winsley, Wolfe, Wood and Zellinsky

Excused:    Representatives Baugher and Gallagher