2018 Passed Property Tax Legislation


Property Tax Bills Passed in 2018 Regular Session

The following is a summary of the significant property tax legislation approved during the regular session of the 2018 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 1570 An Act Relating to expanding access to homeless housing and assistance; amending
HB 2479 Relating to Washington's property assessment appeal procedures
SHB 2576 Relating to allowing fire protection district annexations and mergers within a reasonable geographic proximty
ESHB 2580 Relating to promoting renewable natural gas
SHB 2597 An Act Relating to extending the existing state property tax exemption for residences of senior citizens and disabled persons to local regular property taxes
2SHB 2627 Concerning authorizations of proposals for emergency medical care and service levies
EHB 2777 Improving and updating administrative provisions related to the board of tax appeals
HB 2858 Relating to allowing excess local infrastructure financing revenues to be carried forward
ESSB 5143 Relating to the exemption of property taxes for nonprofit homeownership development
ESSB 6034 An Act Relating to authorizing limited retail telecommunications services for public utility districts that provide only sewer, water, and telecommunications on the effective date of this act
SB 6091 “Hirst fix” - Ensuring that water is available to support development
E2SSB 6362 Relating to modifying basic education provisions
SSB 6475 Prohibiting the imposition of regional transit authority property taxes on less than a whole parcel
ESSB 6614 Relating to providing property tax relief by reducing calendar year 2019 state property taxes and redirecting revenue to the education legacy trust account for fiscal year 2019

E2SHB 1570 - An Act Relating to expanding access to homeless housing and assistance; amending.

Increases homeless housing surcharge from $10 to $62 and makes it permanent.  Surcharges do not apply to documents recording a state, county, or city lien or satisfaction of lien.
This bill takes effect June 7, 2018.


HB 2479 - Relating to Washington's property assessment appeal procedures.

With regard to Board of Equalization hearings on taxpayer petitions, the deadlines for when information or evidence is provided to the other party are modified.
After an appeal has been filed, information or any new evidence held by a taxpayer or the county assessor must be made available, or provided to the other party and the BOE, at least 21 business days before a hearing.  Current law requires information to be exchanged within seven or 14 business days.
The effect of this law will require Boards of Equalization to provide at least 22 business days’ notice for hearings.  Current rule requires 15-business days’ notice.

This bill takes effect June 7th, 2018.

SHB 2576 - Relating to allowing fire protection district annexations and mergers within a reasonable geographic proximity.

This bill makes technical revisions to annexation and merger provisions for fire protection districts and regional fire protection services authorities (RFAs) consistent with SB 5454 from 2017.  The bill allows fire districts or RFAs to annex land, or participate in a merger, so long as boundaries are located “within a reasonable proximity,” rather than “adjacent” to the district or RFA.  The bill defines “Reasonable proximity” as having the same meaning as RCW 52.26.020, whose boundaries are coextensive with two or more adjacent fire protection jurisdictions.  The bill report defines “reasonable proximity” as geographical areas near enough to each other so that governance, management, and services can be delivered effectively.

This bill takes effect June 7th, 2018.

ESHB 2580 - Relating to promoting renewable natural gas.

This bill requires specific actions of the Washington State Extension Energy Program and the Department of Commerce that do not affect the Department of Revenue (Department); and provides or alters tax preferences administered by the Department. 
Under current law:

  • Charges to install, construct, repair, clean alter, or improve anaerobic digesters used to process livestock manure and purchases of component parts for such digesters are not subject to sales or use tax.
  • Persons that purchase machinery and equipment used directly in generating at least one kilowatt of electricity from an eligible renewable energy source may apply to the Department for a refund of 75 percent of retail sales or use tax paid on the purchase and/or installation of such equipment (exemption in the form of a refund). Renewable energy sources include anaerobic digester and landfill gas.

To claim an earlier six-year property tax and leasehold excise tax exemptions for new anaerobic digesters, operators had to file an application with the county assessor by December 31, 2012.

This bill:

  • Expands until January 1, 2029, the sales and use tax exemptions for anaerobic digesters to include the equipment necessary to process biogas by an anaerobic digester and a landfill into marketable coproducts, such as fuel, electricity, and compost.
  • Removes anaerobic digesters and landfill gas as types of renewable energy sources eligible for the 75 percent refund of the sales and use taxes paid for machinery and equipment used directly in generating electricity from an eligible renewable energy source and installation charges for such equipment.
  • Reinstates the six-year property tax exemption for new anaerobic digesters and expands it to include land, structures, and equipment used to process biogas and digestate into marketable coproducts. Claims for the property tax exemption must be filed with the county assessor where the property is located by December 31, 2024.
  • Reinstates the six-year leasehold excise tax exemption for land, structures, and equipment used for the operation of new anaerobic digesters. Claims for the exemption must be filed with the Department by December 31, 2024.

SHB 2597 – An Act Relating to extending the existing state property tax exemption for residences of senior citizens and disabled persons to local regular property taxes.

Expands the property tax exemption for owner occupied residences of low-income seniors and disabled persons to apply to any additional local regular property taxes imposed by a city or county that has approved the action by identifying the exemption in the ballot measure placed before the voters.
Person qualifying for exemption is exempt from all excess property taxes, Part 2 of the state school levy imposed under RCW 84.52.065(2), and a portion of the regular property tax under RCW 84.55.050 approved by the voters if the imposing legislative authority of the county or city identified the exemption in the ordinance placing the RCW 84.55.050 measure on the ballot.

This bill takes effect on June 7, 2018.

2SHB 2627Concerning authorizations of proposals for emergency medical care and service levies.

This bill:

  • Removes the requirement that a subsequent 6-year or 10-year emergency medical service (EMS) levy be an uninterrupted continuation of the initial levy.
  • Allows districts to levy a subsequent EMS levy with a simple majority ballot approval.
  • Allows the initial imposition of a 6-year or 10-year EMS levy by a regional fire protection service authority (RFA) to be approved by a simple majority vote, if the entire region comprising the newly formed authority was subject to an emergency medical service levy immediately prior to the creation of the authority.
  • Revises the requirement from 100 percent approval of the cities having a population greater than 50,000 to 75 percent approval by those cities in the county, when placing a countywide EMS levy on the ballot before the voters.
SHB 2627 is effective June 7, 2018.

 


EHB 2777Improving and updating administrative provisions related to the board of tax appeals.

  • Makes changes to the required qualifications, training, and duties of members of the Board of Tax Appeals (BTA). Requires the board to operate on a full-time basis and provides salary equalization with other boards.
  • Requires the BTA to report on the handling and disposition of its appeal docket and provide a plan to address pending appeals.
  • Parties filing an appeal must elect either a formal or informal, and if they neglect to make a choice, the hearing will be informal. In the event of a cross appeal where one party elects formal proceedings, both appeals will be conducted as formal proceedings.
This bill takes effect June 7th, 2018.

HB 2858 - Relating to allowing excess local infrastructure financing revenues to be carried forward.

Under current law revenues from local public sources dedicated in excess of the project award to be carried forward in subsequent years are not authorized.
This bill amends the Local Infrastructure Financing Tool (LIFT) program to allow revenues from local public sources dedicated in the previous calendar year that are in excess of the project award to be carried forward in subsequent years for purposes of receiving the maximum state contribution.

This bill takes effect June 7th, 2018.

ESSB 5143 - Concerning the exemption of property taxes for nonprofit homeownership development.

  • Expands RCW 84.36.049 to include land owned by a qualifying non-profit housing developer intended for lease to the low-income household of a single-family dwelling unit located on the land. To qualify, the intended land lease must be for life or 99 years. The leasing provision pertains to land only, the title to the associated single family dwelling must be in the name of the low-income household.
  • Changes when the exemptions on qualified land expire to the earlier of: (1) when the nonprofit entity transfers title to the single-family dwelling; (2) seven years or up to a maximum of ten years if an extension is granted; (3) the date on which the nonprofit entity leases the land for ninety-nine years or life; or (4) when the property is no longer held for the purpose for which the exemption was granted.
  • Clarifies that the Department of Revenue may not accept applications for the current and expanded exemption after December 31, 2027, or grant exemptions under this program for taxes due in 2038 and after.

This bill takes effect June 7th, 2018 for taxes payable in 2019. 


ESSB 6034 - An Act Relating to authorizing limited retail telecommunications services for public utility districts that provide only sewer, water, and telecommunications on the effective date of this act.

This bill authorizes certain public utility districts (PUDs) to provide retail Internet services to consumers that are not adequately served by existing providers.  The PUD must negotiate with the counties in which the networks are located to make annual payments in lieu of property taxes.  Based on information provided by the PUD, the Department of Revenue (Department) must annually determine the value of property used to provide retail Internet services and provide the amount of property tax that would otherwise be due to the county.

To provide retail Internet service, the PUD, as of the bill’s effective date of June 7, 2018, must provide only water, sewer, and wholesale telecommunications services in a county west of Puget Sound that is less than 500 square miles.  Only Kitsap PUD meets these requirements.

SB 6091 – “Hirst fix” - Ensuring that water is available to support development.

The effect of the 2018 legislation generally will authorize new domestic well drilling and water withdrawal for domestic residential use anywhere in the state. If a well is already in existence, it is grandfathered. The new law will require each well application after January 19, 2018 to pay a $500 application fee. The fee will only be required for building permits that rely upon wells drilled after the effective date in certain water resource inventory areas (WRIA’s). The state is divided into 62 WIRA’s. WIRA’s do not correspond to county boundaries but instead are individually mapped watersheds. A WIRA map can be found on the Washington State Department of Ecology website at this location;

  • Doe.wa.gov
    • Water and Shorelines
      • Water rights
        • Case Law
          • Hirst decision
            • See a 2-page map of where the new law applies

Not every WIRA is required to adopt or amend a watershed plan. The goal for each WIRA is to have enough water flow in their specific watershed so that the water flowing out is equal to the water flowing into the watershed.
The fee does not apply to wells drilled in the white areas on the map

This bill became effective on January 19, 2018.

E2SSB 6362 - Relating to modifying basic education provisions.

In addition to other changes to state funding for K-12 public education, this bill, requested by the Office of the Superintendent of Public Instruction (OSPI) bill modifies EHB 2242 (Chapter 13, Laws of 2017, 3rd sp. session PV).

School District Property Tax Levies

  • Removes references to transportation vehicle levies as “enrichment levies,” for exclusion from certain levy proposition requirements.
  • Starts the restrictions on a school district’s use of enrichment levies in September 2018 rather than 2019.
  • Requires the deposit of both enrichment levies and transportation vehicle levies to a local revenue subfund of a school district’s general fund starting with the 2018-2019 school year, rather than the 2019-2020 school year.
  • Reduces a high school district’s maximum enrichment levy if the district’s maximum enrichment levy is limited by a maximum per pupil limit.

Local Effort Assistance (LEA)

  • Changes the inflation factor used to increase LEA provided to school districts to the average Consumer Price Index for all urban consumers, Seattle area.
  • Clarifies the calculation for determining the maximum allowable LEA for a school district, and the definition of student enrollment for the purposes of such calculations.
  • Requires the deposit of LEA to local revenue subfund of a school district’s general fund starting with the 2018-2019 school year, rather than the 2019-2020 school year.

Hold Harmless Provisions

  • Provides OSPI-determined hold-harmless payments to qualifying school districts for the 2018-2019 and 2019-2020 school years.
  • Limits hold harmless payments to school districts with enrichment levies and prioritizes payments to districts meeting certain criteria.
  • Appropriates $20 Million to OSPI solely for this purpose.

Rebasing Salary Allocations

  • Modifies the formula for rebasing state basic education compensation allocations.
  • Requires the Legislature to review and rebase salary allocations every four years rather than every six years.

Requires the Department of Revenue (Revenue) to provide specific information to the Legislature every four years rather than six to assist with the review and rebasing process.

This bill takes effect January 1, 2019.

SSB 6475 – Prohibiting the imposition of regional transit authority property taxes on less than a whole parcel.

This bill provides that property taxes by a regional transit authority district, under RCW 81.104.175, may not be imposed on less than a whole parcel situated within the boundaries of the district.  Only those real property parcels that are wholly located within the boundary of a regional transit authority district are subject to the property tax.

This bill took effect on March 15, 2018.

ESSB 6614 - Relating to providing property tax relief by reducing calendar year 2019 state property taxes and redirecting revenue to the education legacy trust account for fiscal year 2019.

This bill provides property tax relief for property owners in CY 2019 by lowering the 2019 state property from $2.70 to $2.40 per $1,000 market value.  On a statewide basis this corresponds to a property tax reduction of approximately $390 million in calendar year 2019.

Under current law the aggregate tax rate for state property taxes levied for collection in 2018 through 2021 is $2.70 per $1,000 of market value. As a result:

    • The tax rate for Part I of the state levy is $1.7552 per $1,000 of market value.
    • The tax rate for Part II of the state levy is $0.9448 per $1,000 of market value.

Revenues from both Part I and Part II of the state levy are deposited into the State General Fund.  

The new law reduces the aggregate tax rate for state property taxes levied for collection in calendar year 2019 by 30 cents to $2.40 per $1,000 of market value. As a result:

    • The levy rate for Part II of the state property tax is reduced by 30 cents to $0.6448 per $1,000 of market value.
    • The levy rate for Part I of the state property tax is unchanged and remains $1.7552 per $1,000 of market value.
  • Maintains the aggregate rate for state property taxes levied for collection in calendar years (CY) 2018, 2020, and 2021 at $2.70 per $1,000 of market value.

This bill also requires the deposit of, $935 million in revenue collections from Part II of the state levy to the Education Legacy Trust Account for fiscal year (FY) 2019.

This bill will take effect with the collection of 2019 property taxes.