2012 Legislative Summary

Property Tax Bills – Passed in 2012 Regular Session

2ESHB 2048 Relating to Low-income and homeless housing assistance surcharges
SHB 2056 Relating to assisted living facilities
SHB 2149 Provides amnesty for reporting personal property to the county assessor
ESHB 2502 Modifies an exception to compensating tax for land removed as designated forest land under chapter 84.33 RCW
SHB 2617 Addresses school district insolvency
SSB 5381 Relating to adjusting voting requirements for emergency medical service levies
SSB 6277 Creating authority for counties to exempt from property taxation new and rehabilitated multiple-unit dwellings in certain unincorporated urban centers
ESSB 6470 Relating to benefit charges for enhancement of fire protection services
SSB 6600 Extending property tax exemptions to property used exclusively by certain nonprofit organizations that is leased from an entity that acquired the property from a previously exempt nonprofit organization

2ESHB 2048 RCW 36.22.179 provides for a $10 surcharge to be collected by the county auditor for certain document recordings, to be used to fund low-income and homeless housing assistance programs. In 2009, HB 2331 was passed, temporarily increasing the surcharge from $10 to $30 for the 2009-11 and 2011-13 biennia.

This bill extends the increase through the 2015-2017 biennia and provides an additional temporary increase from $30 to $40 beginning 09/01/2012 and continuing through 06/30/2015. The increase expires and the surcharge is reduced to the original $10 beginning 07/01/2017. The amendment corrected the dates and requires cities and counties receiving more than $3.5 million in revenue from the surcharges to apply to the Washington State Quality Award program or similar Baldrige assessment organization for an independent assessment of its quality management.

For property tax, the document recording fee increases applies to liens recorded with the county auditor for both deferral programs and the grant assistance program for widows/widowers of veterans.

SHB 2056 This bill makes technical change only by changing the term “boarding home” to “assisted living facility”. It also accounts for the statutory changes in 2011 by removing provisions related to changes in Interstate Compact on Placement of Children and applies DSHS rules regarding boarding homes to assisted living facilities. The term “boarding home” is changed to “assisted living facility” throughout the boarding home licensing statute and elsewhere in the Revised Code of Washington. Property tax statutes that are amended include RCW 84.36.381 and 84.36.383.

SHB 2149 All real and personal property is subject to property tax each year based on its value, unless a specific exemption is provided by law. There are two classes of property. Real property consists of land and the buildings, structures, and improvements that are affixed to land. Personal property consists of all other property, such as machinery, equipment, furniture, and supplies of businesses. Household goods and business inventories are specifically exempt from personal property tax. Personal property is self-reported to each county assessor.

If any person or corporation fails to file a personal property listing by April 30th of each year, they are subject to late filing penalties. Currently no provision exists for waiving the penalties, except “reasonable cause.”

The county legislative authority may authorize the assessor to waive penalties for assessment years 2011 and prior for a person or corporation failing or refusing to deliver to the assessor a list of taxable personal property under certain circumstances. To qualify, on or before July 1, 2012, the taxpayer must file with the assessor a correct list and statement of taxable personal property and a completed application for a penalty waiver. Full payment of the tax must be made to the county by September 1, 2012, of the entire balance due on all tax liabilities for which a penalty waiver is requested. Taxpayers receiving penalty relief may not seek a refund or otherwise challenge the amount of tax liability. Personal property listed by the taxpayer is subject to verification by the assessor and any unreported or misreported property remains subject to taxes, penalties, and interest.

ESHB 2502 For property tax purposes, land designated as forest land is generally assessed at a lower value, which results in lower taxes. When land is removed from designation as forest land, back taxes must be paid absent a statutory exemption. The same is true for the removal of land from the current use program that was previously designated as forest land.

Current law provides an exemption from the payment of back taxes for land in counties with populations greater than 600,000 (King, Pierce, and Snohomish) when removal from designated forest land results from a sale or transfer to a governmental entity, nonprofit historic preservation, or nonprofit nature conservancy corporation for the purpose of conserving open space. A similar exemption applies to timber land classified under the current use program that was once designated as forest land.

This bill expands these exemptions to include any county with a population of at least 245,000 that borders Puget Sound (Thurston and Kitsap).

SHB 2617 This bill establishes criteria for a school district to be identified as financially insolvent and establishes a process by which a financially insolvent school district may be dissolved and its territory annexed by or transferred to one or more contiguous school districts. The bill also contains provisions relating to property tax levies, including (1) levies for paying the bonded indebtedness of a dissolved school district, (2) extending any pre-existing excess levy of a school district to territory received from a financially insolvent school district, and (3) authorizing replacement or supplemental levies, upon voter approval, by a school district annexing or receiving territory from a financially insolvent school district. Additionally, the bill specifies that for property tax purposes, the boundaries of a school district that annexes or receives territory from a financially insolvent school district must be established on September 1st of the year in which a levy is to be made for the enlarged school district.

SSB 5381 This bill changes the voter approval requirement for the uninterrupted renewal of a 6-year or 10-year EMS levy from a super majority with validation requirements to a majority with no validation requirements. A super majority voter approval and validation requirements for a permanent, or initial 6-year or 10-year EMS levy remains.

SSB 6277 The Legislature previously provided a property tax exemption for property associated with the construction, conversion, or rehabilitation of qualified, multi-unit, residential structures located in a targeted residential area contained in an urban growth center. Cities with a population of 5000 or more are eligible to establish the target areas and smaller cities may participate if they are the largest city or town located in a county that is required to plan under the Growth Management Act. This bill extends the multi-unit housing exemption availability to an urban center where the unincorporated population of a county is at least 350,000 and there are at least 1200 students living on campus at an institute of higher education during the academic year, for example, the area surrounding Pacific Lutheran University. For any multi-unit housing located in an unincorporated area of a county, a property owner seeking tax incentives under this chapter must commit to renting or selling at least 20 percent of the multi-family housing units as affordable housing units to low- and moderate-income households.

ESSB 6470 To enhance fire protection services, cities and towns may impose a benefit charge on personal property and improvements to real property located in the city or town if the city or town is annexing or, since 2006, has annexed all or part of one or more fire protection districts. A benefit charge must be reasonably proportioned to the measurable benefits to property resulting from the enhancement of services afforded by the city or town. A 60 percent majority voter approval is required to impose the benefit charge. The benefit charge can be in effect no more than 6 years or a lesser number of years approved by the voters, unless subsequently reapproved by the voters. Certain exemptions from the benefit charge are provided. A city or town imposing the benefit charge must contract with the county treasurer for the administration and collection of the benefit charge and reimburse the associated costs incurred by both the county treasurer and county assessor. This bill does not affect the Department.

SSB 6600 Under current law, property owned by a nonprofit organization or association engaged in youth character building activities is exempt from the property tax when it is exclusively used for their exempt activity. Property owned by churches and wholly used for church purposes is exempt from property tax.

Property leased by a nonprofit organization engaged in youth character building activities is generally not exempt from property tax. Leased property may qualify when it is leased directly from another exempt organization that is engaged in youth character building activities. This bill allows leased property used for youth character building activities to be exempt when the property is owned by a property tax exempt church; or when:

  • the property is owned by an entity formed exclusively for the purpose of leasing the property to an organization that will use the property for the exempt purposes;
  • the youth character building organization uses the property for the exempt purposes;
  • the immediate previous owner of the property had received an exemption for the property; and
  • the benefits of the exemption must be passed on to the lessee of the property.

These provisions are in effect for nonprofit youth character building organizations, nonprofit nonsectarian organizations which provide character building, protective or rehabilitative social services for all ages, veterans relief organizations, church camp facilities, and nonprofit organization that issue debt for student loans or that are guarantee agencies.

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