SB 5160 — Concerning property tax exemptions for service-connected disabled veterans and senior citizens.

S-2262.1SUBSTITUTES-0606.2SENATE SENATE BILL 5160State of Washington66th Legislature2019 Regular SessionBySenateSessionBySenators Ways & Means (originally sponsored by Senators Dhingra, Wellman, Palumbo, Keiser, Rolfes, Das, Randall, Wilson, C., Fortunato, Hasegawa, King, and Kuderer)READKudererRead FIRSTfirst TIMEtime 03/01/19.AN01/15/19.Referred to Committee on Ways & Means.AN ACT Relating to property tax exemptions for service-connected disabled veterans and senior citizens;

amending RCW 84.36.381, 84.36.383, 84.36.385, 84.38.020, 84.38.070, 84.38.130, and 84.38.150;84.38.020;

and providing an effective date.BEdate; IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec.

and declaring an emergency.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec.

RCW 84.36.381 and 2018 c 46 s 2 are each amended to read as follows:A person is exempt from any legal obligation to pay all or a portion of the amount of excess and regular real property taxes due and payable in the year following the year in which a claim is filed, and thereafter, in accordance with the following:(1)(a)following:(1) The property taxes must have been imposed upon a residence which was occupied by the person claiming the exemption as a principal place of residence as of the time of filing.

Moreover, confinement of the person to a hospital, nursing home, assisted living facility, ((or)) adult family home, or home of a relative for the purpose of long-term care does not disqualify the claim of exemption if:(((a)))(i)if:(a) The residence is temporarily unoccupied;(((b)))(ii)unoccupied;(b) The residence is occupied by a spouse or a domestic partner and/or a person financially dependent on the claimant for support;

or(((c)))(iii)or(c) The residence is rented for the purpose of paying nursing home, hospital, assisted living facility, or adult family home costs;(b)costs;(2) For the purposes of this subsection (1), "relative" means any individual related to the claimant by blood, marriage, or adoption;(2) The person claiming the exemption must have owned, at the time of filing, in fee, as a life estate, or by contract purchase, the residence on which the property taxes have been imposed or if the person claiming the exemption lives in a cooperative housing association, corporation, or partnership, such person must own a share therein representing the unit or portion of the structure in which he or she resides.

423(d)(1)(A) as amended prior to January 1, 2005, or such subsequent date as the department may provide by rule consistent with the purpose of this section.(8) "Income threshold 1" means:(a) For taxes levied for collection in calendar years prior to 2022,2020, a combined disposable income equal to thirty thousand dollars;

and(b) For taxes levied for collection in calendar year 20222020 and thereafter, a combined disposable income equal to the greater of "income threshold 1" for the previous year or forty-five percent of the county median household income, adjusted every five years beginning MarchJuly 1, 2021,2019, as provided in RCW 84.36.385(8).(9) "Income threshold 2" means:(a) For taxes levied for collection in calendar years prior to 2022,2020, a combined disposable income equal to thirty-five thousand dollars;

and(b) For taxes levied for collection in calendar year 20222020 and thereafter, a combined disposable income equal to the greater of "income threshold 2" for the previous year or fifty-five percent of the county median household income, adjusted every five years beginning MarchJuly 1, 2021,2019, as provided in RCW 84.36.385(8).(10) "Income threshold 3" means:(a) For taxes levied for collection in calendar years prior to 2022,2020, a combined disposable income equal to forty thousand dollars;

and(b) For taxes levied for collection in calendar year 20222020 and thereafter, a combined disposable income equal to the greater of "income threshold 3" for the previous year or sixty-five percent of the county median household income, adjusted every five years beginning MarchJuly 1, 2021,2019, as provided in RCW 84.36.385(8).(11) "County median household income" means the median household income estimates for the state of Washington by county of the legal address of the principal place of residence, as published by the office of financial management.Sec.

Notice of the qualifications, method of making applications, the penalties for not reporting a change in status, and availability of further information must be included on or with property tax statements and revaluation notices for all residential property including mobile homes, except rental properties.(7) The department must authorizeprovide an option for electronic filing of applications and renewal applications for the exemption under RCW 84.36.381.(8) Beginning MarchJuly 1, 2021,2019, and by MarchJanuary 1st every fifth year thereafter, the department must publish updated income thresholds.

For the purposes of this subsection, "county median household income" has the same meaning as in RCW 84.36.383.(9)84.36.383.Sec. Beginning December 1, 2021, and every fifth year thereafter, to assist the legislature in evaluating the extent to which the changes under this act are uniformly and equitably benefiting residential property owners across the state, the department, using data provided by county assessors, must submit a report to the legislature that includes the most recently available income thresholds for each county under RCW 84.36.381, the number of additional properties exempted under RCW 84.36.381 resulting from the changes under this act, and any other information the department deems relevant to the legislature's evaluation of the efficacy of this act in providing additional, uniform, and equitable statewide residential property tax relief.Sec.

RCW 84.38.020 and 2006 c 62 s 2 are each amended to read as follows:((Unless a different meaning is plainly required by the context, the following words and phrases as hereinafter used in this chapter shall have the following meanings:))The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.(1)(a) "Claimant" means a person who either elects or is required under RCW 84.64.050 to defer payment of the special assessments and/or real property taxes accrued on the claimant's residence by filing a declaration to defer as provided by this chapter.(b) When two or more individuals of a household file or seek to file a declaration to defer, they may determine between them as to who is the claimant ((shall be)).(2) (("Department" means the state department of revenue.(3)))"Devisee"revenue.(3))) means any person designated in a will to receive a disposition of real or personal property.(3) "Equity value" means the amount by which the fair market value of a residence as determined from the records of the county assessor exceeds the total amount of any liens or other obligations against the property.(4)property.(3) "Heirs" means those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.(5) "Income threshold" means:(a) For taxes levied for collection in calendar years prior to 2022,2020, a combined disposable income equal to forty-five thousand dollars;

and(b) For taxes levied for collection in calendar year 20222020 or thereafter, a combined disposable income equal to the greater of the "income threshold" for the previous year, or seventy-five percent of the county median household income, adjusted every five years beginning AugustJuly 1, 2021,2019, as provided in RCW 84.36.385(8).(6)84.36.385(8).(4) "Local government" means any city, town, county, water-sewer district, public utility district, port district, irrigation district, flood control district, or any other municipal corporation, quasi-municipal corporation, or other political subdivision authorized to levy special assessments.(((5)))(7)assessments.(5) "Real property taxes" means ad valorem property taxes levied on a residence in this state in the preceding calendar year.(((6)))(8)year.(6) "Residence" has the meaning given in RCW 84.36.383.(((7)))(9)84.36.383.(7) "Special assessment" means the charge or obligation imposed by a local government upon property specially benefited.Sec.

However, any surviving spouse ((or)),or surviving domestic partner,partner heir, or devisee of a person who was receiving a deferral at the time of the person's death qualifies if the surviving spouse ((or)),or surviving domestic partner,partner heir, or devisee is fifty-seven years of age or older and otherwise meets the requirements of this section.(3) The claimant must have a combined disposable income, as defined in RCW 84.36.383, ((of forty-five thousand dollars or less))equal to or less than the income threshold.(4) The claimant must have owned, at the time of filing, the residence on which the special assessment and/or real property taxes have been imposed.

However, if the claimant fails to keep fire and casualty insurance in force to the extent of the state's interest in the claimant's equity value, the amount deferred may not exceed one hundred percent of the claimant's equity value in the land or lot only.(6) In the case of special assessment deferral, the claimant must have opted for payment of such special assessments on the installment method if such method was available.Sec.available.NEW SECTION.  Sec.

RCWThis 84.38.070act andapplies 2008 c 6 s 703 are each amended to readtaxes aslevied follows:If the claimant declaring his or her intention to defer special assessments or real property tax obligations under this chapter ceases to reside permanently on the property for whichcollection thein declaration2020 to defer is made between the date of filing the declaration and Decemberthereafter.NEW 15thSECTION.  Sec. of that year, the deferral otherwise allowable under this chapter ((shall))is not ((be)) allowed on such tax roll.

However, this section ((shall))does not apply where the claimant dies, leaving a spouse ((or)), domestic partner, heir, or devisee surviving, who is also eligible for deferral of special assessment and/or property taxes.Sec.

RCW 84.38.130 and 2008 c 6 s 704 are each amended to read as follows:Special assessments and/or real property tax obligations deferred under this chapter ((shall)) become payable together with interest as provided in RCW 84.38.100:(1) Upon the sale of property which has a deferred special assessment and/or real property tax lien upon it.(2) Upon the death of the claimant with an outstanding deferred special assessment and/or real property tax lien except a surviving spouse ((or)), surviving domestic partner, heir, or devisee who is qualified under this chapter may elect to incur the special assessment and/or real property tax lien, which ((shall))is then ((be)) payable by that spouse or that domestic partner as provided in this section.(3) Upon the condemnation of property with a deferred special assessment and/or real property tax lien upon it by a public or private body exercising eminent domain power, except as otherwise provided in RCW 84.60.070.(4) At such time as the claimant ceases to reside permanently in the residence upon which the deferral has been granted.(5) Upon the failure of any condition set forth in RCW 84.38.030.Sec.

9.

RCW 84.38.150 and 2008 c 6 s 705 are each amended to read as follows:(1) A surviving spouse ((or)), surviving domestic partner, heir, or devisee of the claimant may elect to continue the property in its deferred tax status if the property is the residence of the spouse or domestic partner of the claimant and the spouse ((or)), domestic partner, heir, or devisee meets the requirements of this chapter.(2) The election under this section to continue the property in its deferred status by the spouse ((or the)), domestic partner, heir, or devisee of the claimant ((shall))must be filed in the same manner as an original claim for deferral is filed under this chapter((, not later than ninety days from the date of the claimant's death)).

Thereupon, the property with respect to which the deferral of special assessments and/or real property taxes is claimed ((shall))must continue to be treated as deferred property.

When the property has been continued in its deferred status by the filing of the spouse ((or the)), domestic partner, heir, or devisee of the claimant of an election under this section, the spouse ((or the)), domestic partner, heir, or devisee of the claimant may continue the property in its deferred status in subsequent years by filing a claim under this chapter so long as the spouse ((or the)), domestic partner, heir, or devisee meets the qualifications set out in this section.NEW SECTION.  Sec.

10.

This act applies to taxes levied for collection in 2022 and thereafter.NEW SECTION.  Sec.

11.

12.9.

This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect AugustJuly 1, 2021.---2019.--- END ---