2016 Legislative Summary


Property Tax Bills Passed in 2016 Regular Session

The following is a summary of the significant property tax legislation approved during the regular session of the 2016 Washington State Legislature. We have included links to the Legislature site for each bill that adopted. These sites give a very complete picture of how the measures moved through the legislative process and provide copies of the measures that have been enacted into law. We have also provided contact information for our staff members that may be involved in the implementation of the bill or the ongoing administration of related programs.

SHB 2519

Relating to nuisance abatement cost recovery for cities

HB 2842

Relating to financing of improvements for state-owned lands to be transferred for private development

SSB 5767

Relating to local government treasury practices and procedures

ESSB6206

Authorizing the growing of industrial hemp

SSB 6211

Exemption of property taxes for nonprofit homeownership

SSB 6337

Disposing tax foreclosed property to cities for affordable housing purposes


SHB 2519 -Relating to nuisance abatement cost recovery for cities

The bill authorizes cities and towns to levy special assessments against property for the expense of abating a nuisance, which threatens health or safety. The special assessment constitutes a lien against the property, where up to $2,000 of the lien is of equal rank with state, county, and municipal taxes. The city or town must provide prior notice to the property owner and any identifiable mortgage holder.

SHB 2519 is effective June 9,2016. DOR Contact: Peggy Davis at PeggyD@dor.wa.gov or (360) 534-1410


HB 2842- Relating to financing of improvements for state-owned lands to be transferred for private development

This bill creates a new tax increment financing program, which allows a city to designate a state land improvement finance area (SLIFA) to finance public improvement projects:

  • A city that designates a SLIFA must be located in Eastern Washington, abut the Columbia River, and have a population that exceeds 60,000.  One city, Pasco, currently meets these requirements.
  • A SLIFA is created by city ordinance and may include only state-owned land or land whose immediately preceding owner was the state, and the land was or will be sold by the state for private development.  The Department of Natural Resources currently owns a 300-acre parcel of irrigation land within Pasco that is planned for auction for private development.
  • Except for the state school levy, all regular property taxes levied within the SLIFA will be distributed to Pasco to finance public improvement projects.

HB 2842 is effective June 9, 2016. DOR Contact: Diann Locke at DiannL@dor.wa.gov or (360) 534-1427


SSB 5767- Relating to local government treasury practices and procedures.

The bill revises the authority of county treasurers to accept electronic payments and charge transaction processing costs to the payer with certain exceptions. Electronic communication transaction fees may also be absorbed within the treasurer’s banking services budget. The bill further updates and clarifies guidelines for duplicating lost or destroyed warrants.

While SSB 5767 was vetoed by the Governor, the Legislature overrode the veto and passed the bill into law. As a result, SSB 5767 is effective June 28,2016. DOR Contact: Peggy Davis at PeggyD@dor.wa.gov or (360) 534-1410


ESSB 6206 -Authorizing the growing of industrial hempAuthorizing the growing of industrial hemp

This bill establishes an industrial hemp research program in the state, supervised by the Washington State Department of Agriculture. It allows approved growers to import hemp seeds and grow industrial hemp. The bill also prohibits processing industrial hemp into products for topical use, oral consumption, or human inhalation. Unlike growers of medical and recreational marijuana, hemp growers will be eligible for the same tax preferences as growers of other agricultural products.

While ESSB 6206 was vetoed by the Governor, the Legislature overrode the veto and passed the bill into law. As a result, ESSB 6206 is effective June 28, 2016. DOR Contact (Property Tax related questions): Jeri Lux at JeriL@dor.wa.gov or (360) 534-1360


SSB 6211 - Exemption of property taxes for nonprofit homeownership

This bill:

  • Creates a new exemption from state and local property taxes for real property owned by a nonprofit, as defined, for the purpose of developing or redeveloping one or more residences to be sold to low-income households.
  • Provides that the exemption ceases the earlier of:
    1. When the nonprofit entity transfers title to the real property,
    2. Seven years or up to a maximum of ten years if an extension is granted, or
    3. When the property is no longer held for the purpose for which the exemption was granted.
  • Requires the nonprofit to notify the Department when the property becomes occupied and certify that the occupants are low income.
  • Defines “low-income household” as a single person, family, or unrelated persons living together whose adjusted income is less than eighty percent of the median family income as most recently determined by the federal Department of Housing and Urban Development (HUD) for the county in which the property is located.
  • Requires payment of taxes and interest that would have otherwise been due if the property is disqualified from the exemption.
  • Provides that when the exemption ceases, the value of new construction and improvements, not previously considered as new construction, must be considered as new construction for purposes of calculating levies under chapter 84.55 RCW.

SSB 6211 is effective June 9, 2016. DOR Contact: Sindy Armstrong at SindyA@dor.wa.gov or (360) 534-1412


SSB- 6337- Disposing tax foreclosed property to cities for affordable housing purposes

Under this bill, when a county does not purchase a tax title property for public purpose, the county must notify the city in which any tax title property is located and provide the city first opportunity to purchase the property for affordable housing development. The purchase price must be the original minimum bid amount offered at the foreclosure sale (which includes all unpaid taxes, assessments, deferred tax amounts, penalty and interest) plus any direct costs incurred by the county in the sale of the property. When the city transfers the property to a housing authority or qualified nonprofit entity, the housing authority or nonprofit entity must reimburse the city for the amount it paid to purchase the property plus any direct costs resulting from the transfer.

SSB 6337 is effective June 9, 2016. DOR Contact: Peggy Davis at PeggyD@dor.wa.gov or (360) 534-1410