The following is a summary of the significant property tax legislation approved during the regular session of the 2019 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.

E2SHB 1105 - Protecting taxpayers from home foreclosure.

Enacts measures to protect taxpayers from home foreclosure, including requiring county treasurers to provide:

This bill will become effective January 1, 2020. Tax statements no later than March 15th each year; Information describing the senior citizens and disabled persons exemption and deferral property tax relief programs on each tax statement; Notification on the balance of delinquent taxes and special assessments plus interest and penalties, as well as where the taxpayer pays his or her property taxes directly, contact information for a statewide foreclosure hotline; A homeownership resource center the name and address of delinquent tax accounts after two years of the real property taxes becoming delinquent; A waiver for all outstanding interest and penalties on delinquent taxes for a one-time waiver when a taxpayer meets certain income-qualifications and occupy their principal place of residence.

ESHB 1107 - Concerning nonprofit homeownership development.

Expands the existing state and local property tax exemption for real property owned by a nonprofit entity and that is developed or redeveloped into residences to be sold to low income households to also include real property owned and developed for the same purpose by a "qualified cooperative association."

This bill will become effective for taxes levied for collection in 2020.

HB 1634 - Requiring property sold in tax lien foreclosure proceedings to be sold as is.

This bill requires all property sold by a county treasurer in a tax lien foreclosure sale to be sold as is, without any guarantee or warranty of any kind.

This bill becomes effective July 28, 2019.

SHB 1746 - Incentivizing the development of commercial office space in cities in a county with a population of less than one million five hundred thousand.

This bill allows a city in a county with a population less than 1.5 million to create:

A local sales and use tax remittance program, and A local property tax reinvestment program to incentivize the development of commercial office space.

 

The commercial office space can include mixed-use buildings, but does not include residential spaces.

Local property tax reinvestment program
After approving a commercial office space to participate in a property tax reinvestment program, the city must deposit into a specified account an amount equal to the city’s share of the property tax on the new construction for 10 successive years.

The city may only make expenditures from this account for public improvements.

Also requires JLARC to study the effectiveness of the legislation and submit a report to the appropriate committees of the Legislature by October 1, 2028.

Local sales and use tax remittance
The remittance program is for 100 percent of the local sales and use tax on

The sale of, or charge made for labor and services on the construction or rehabilitation of commercial office space; The sales or use of tangible personal property that is installed as an ingredient or component of a commercial office space.

HB 1852 – Concerning property tax refunds more than three years after the due date resulting from certain manifest errors.

Clarifies how a county legislative authority may authorize a property tax refund more than three years after the due date of the payment, when the refund is for taxes paid as the result of a manifest error in a description of property.

Allows the county legislative authority to process the refund without a separate claim from the property owner for each year the refund is sought.

This bill becomes effective July 28, 2019.

SHB 2044 – Concerning the deannexation of a portion of land from a park and recreation district or metropolitan park district.

Authorizes a city, town, or county to withdraw land from a park and recreation district or metropolitan park district.

This bill becomes effective July 28, 2019.

HB 2072 –Authorizing county treasurers to contract with other treasurers for services.

Provides the option for a county treasurer to contract with another county treasurer, with the State Treasurer, or both, for any duty or services performed by the contracting county treasurer. However, a contracted treasurer may not perform any duties that is in conflict with his or her own duties, or that is in conflict with other statutory or ethical requirements.

This bill becomes effective July 28, 2019.

ESHB 2140 - Relating to K-12 education funding.

All funds collected for Part 2 of the State school levy will be deposited into the Education Legacy Trust Account rather than the General Fund for the 2019 fiscal year.

Non property tax issues:

• School districts may use capital projects fund revenue for preventative maintenance and infrastructure improvement during the 2019-2021 fiscal biennium.
• Makes adjustments to the School Employees Benefits Board. Employment Security Department must provide funding to OSPI for employees and ESDs to support the expansion of career connected learning opportunities.
• A hold harmless technical correction was made revising a reference to the current school year rather than levies collected during the previous calendar year.

This bill takes effect immediately after signing.

SSB 5010 - Concerning protected lands not being assessed local fire district levies.

Establishes a process for a local fire district to annex parcels that receive fire protection services but do not pay a fire district property tax levy, when the annexed parcels are located within the external boundaries of the fire district. Requires the annexations be initiated by January 1, 2021.

This bill takes effect July 28, 2019.

SSB 5025 - Creating sales, use, and excise tax exemptions for self-help housing development.

This bill provides a real estate excise tax exemption on the sale of self-help housing by an affordable homeownership facilitator to a low-income household.

This bill becomes effective October 1, 2019 and expires January 1, 2030.

ESSB 5131 – Regarding foreclosure and distraint sales of manufactured/mobile or park model homes.

The bill provides that when a manufactured/mobile home or park model is sold at a county treasurer’s foreclosure or distraint sale, the signatures of the registered owner, legal owner, and purchaser are not required to transfer title of the home.

It also clarifies the following in the licensing statutes:

All lienholder interests in a manufactured/mobile home or park model sold at such a sale are extinguished, and Any liens filed by the Department for taxes deferred under the low-income or retired person’s property tax deferral programs must be included in the minimum bid amount for such sales.

 

This bill takes effect July 28, 2019.

SB 5132 - Addressing noncollection of taxes by county treasurers.

This bill removes personal liability if the county treasurer "neglects" to collect taxes on personal property or file the delinquent list and affidavit with the county auditor.

This bill becomes effective July 28, 2019.

ESSB 5160 – This bill amends the requirements for a person to be eligible for the property tax exemption (exemption program) and deferral program (deferral program) for senior citizens, individuals with disabilities, and veterans.

Beginning with taxes levied for collection in 2020:

Revises the income requirements (thresholds) necessary to qualify for the exemption program, as follows:

 

• Income threshold 1 is the greater of $30,000, or 45 percent of the median household income for the county.
• Income threshold 2 is the greater of $35,000, or 55 percent of the median household income for the county.
• Income threshold 3 is the greater of $40,000, or 65 percent of the median household income for the county.
• Income thresholds can never be less than the previous year.

Allows veterans to qualify for the exemption program with a service-connected disability evaluation of 80 percent or higher, or being paid at the 100 percent rate because they are unemployable due to their service-connected disability regardless of evaluation rating. Revises the income threshold necessary to qualify in the deferral program, as follows:

• Income threshold is the greater of $45,000 or 75 percent of the median household income for the county.
• The income threshold can never be less than the previous year.

Requires the Department to update the income thresholds for both programs beginning August 1, 2019, and every fifth year thereafter.

This bill takes effect for taxes levied for collection in 2020 and thereafter.

 

 

 

SB 5177 - Concerning cemetery district withdrawal of territory.

This bill provides more options for a cemetery district to withdrawal territory from their districts.

This bill becomes effective July 28, 2019.

ESSB 5183 - Concerning relocation assistance for manufactured/mobile home park tenants.

This bill allows Department of Commerce to provide financial assistance for individuals who own manufactured/mobile homes in a park to relocate it when a park is closed or converted to another use. Section 11 of the bill affects RCW 84.36.560, nonprofit very low income housing. It adds mobile home park coop or manufactured housing coop to the definition of nonprofit entity and adds them to the financing criteria section of RCW 84.36.560.

This bill will take effect July 28, 2019.

2SSB 5313 - Concerning school levies.

Changes the formula for local effort assistance (LEA) for school districts.

This bill also:

Increases the maximum enrichment levy
Beginning with taxes levied for collection in 2020, the maximum enrichment levy amount that school districts can impose is equal to the lesser of:

$2.50 per $1,000 of assessed value of property; or The maximum per-pupil limit.

Requires expenditure reporting, auditing, and reduction to maximum enrichment levy
Beginning in the 2019-2020 school year, school districts must provide to OSPI a schedule of expenditures for certain local revenues, and the state auditor must include a review of the expenditure schedule and supporting documentation as part of its regular financial audits of school districts.

If the State Auditor reports to OSPI any finding that a school district is out of compliance with the requirements in RCW 28A.150.276, and the finding are not resolved by a subsequent audit, the maximum enrichment levy of that school district must be reduced by the expenditure identified by the state auditor.

This bill will take effect July 28, 2019.

Both per-pupil limits are increased by inflation beginning with property taxes levied for collection in 2020.

Additionally, the maximum enrichment levy must be reduced by the amount of any required state audit finding under RCW 43.09.2856(2).

The maximum per-pupil limit means:

$2,500 per student, for school districts with fewer than 40,000 annual full-time equivalent students enrolled in the district in the prior school year; and $3,000 per pupil, for school districts with 40,000 or more annual full-time equivalent students enrolled in the school district in the prior year.

SSB 5894 - Clarifying that the firefighters’ pension levy may continue to be levied to fund benefits under the law enforcement officers’ and firefighters’ retirement system.

City firefighter pension levy. When an actuary determines the additional levy is not necessary, a city is not required to levy the 2nd $0.225 fire fighter pension fund levy. If the city continues to levy the tax, they must use the funds to pay for medical expenses of their retired employees rather than any municipal purpose until there are no beneficiaries receiving assistance.

This bill will become effective July 28, 2019.

ESSB 5998 - Establishing a graduated real estate excise tax.

Graduated REET, beginning January 1, 2020 the rates for real estate excise tax on sale of real estate will be:

• 1.1 percent if the selling price is equal to or less than $500,000;
• 1.28 percent on the portion of the selling price that is greater than $500,000 but equal to or less than $1,500,000;
• 2.75 percent on the portion of the selling price that is greater than $1,500,000 but equal to or less than $3,000,000;
• and 3 percent on the portion of the selling price that is greater than $3,000,000.
• A rate of 1.28 percent is imposed on the sale of timberland or agricultural land regardless of selling price.

This bill will take effect beginning January 1, 202